U.S. student loan debt has increased from about $200 billion in 2000 to nearly $1 trillion in 2011. It is the next big bubble, sold cynically by Wall Street and guaranteed by the U.S. Government -- the same corporate socialism in the name of "helping" consumers that blew up the housing bubble.
MB360 believes student debt has all the ingredients of the next economic bubble:
"The cost of going to college has outpaced every category of living by a very wide margin. It is hard to believe but the cost of college has even surpassed the now historic housing bubble. How can this be? You have a perfect combination of:
- Un-regulated casino like financial sector- Government bought out by financial sector and used as a dumping ground- A myth that any college is a good college- A marketing and propaganda machine that is actively destroying the middle class"
As MB360 notes, "We are seeing now an army of unemployed college graduates" who are laden with an "albatross" of onerous student loans. Indeed, since the 2008 recession, "every other item of consumer debt has contracted strongly except that of student loans." Partly this is because you can't write off student loans when declaring personal bankruptcy, unlike with mortgage or credit card debts; and the late-payment fees just keep piling up.
For-profit colleges are diploma factories substituting credentials for real knowledge, but employers aren't fooled. They aren't hiring. It's a shame that so many enrollees in these colleges are from our Armed Services, and financed by the US Government! Obama is trying to regulate for-profit colleges but not aggressively enough.
Posted by mybudget360
June 6, 2011
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