When the student loan bubble bursts

College students all over the country are in tens of thousands of dollars of debt for educations that would be largely subsidized in more civilized countries. Does anyone really think most of this debt is going to be paid off in an economy from which jobs are disappearing?

From Occupied Chicago Tribune:

Middle class families have seen their wages stagnate for decades, while the cost of college education has risen more than 300%. Lingering unemployment means new graduates are hard-pressed to pay off their burdensome debt, which now averages more than $25,000. In 2007, 50% of college graduates were able to find work immediately. In 2009, this figure had dropped to 20%. Increasingly, graduates and drop-outs are facing a lifetime of struggle and indenture-ship after leaving college.

However, far from being a narcissistic pet issue for the disproportionately young Occupy crowds, student indebtedness in countries without universal education systems is a symptom of the same underlying pathologies that brought down the housing market five years ago, and could soon be the cause of another sudden, catastrophic economic contagion…

3 thoughts on “When the student loan bubble bursts

  1. I posted a story about the student demonstrations in Montreal to my Facebook page this week. My friends and I are geezers in our 50s and 60s, and most of us don’t even have children. Even so, that story about the student protests got more “likes” than anything I’ve ever posted. So, though I can’t speak for the rest of the population, in my circle of old farts there appears to be a world of concern about what is happening to students. Also a great willingness to help and support whatever the young ones decide to do about it.

  2. I, a semi “retired” educator, have been calling it the next sub-prime for a couple of years now. And I’m still in over my head for my mid-thirties “career change”, anticipating a garnishment if and when I collect the forty-five years of Social Security I’ve paid into.

    On-the-other-hand, I was discussing this with my sons just yesterday, and have come to the conclusion that the thing to do is go for it. As my college and university years were as much single-parent providing for his family as an intellectual endeavor: borrow the money, provide for your families in the short run. If things turn around in the long run you can pay it back. If they don’t turn around – and I don’t believe they will, I have students graduating this summer whom I warned two years ago that there may not be a job out there for them afterwards – the education itself, albeit a corporatized education, is of greater value to your families. Of greater value to the survival of the family. Steal an education, if you wish, but doing so knowing that if we were indeed a civilized country, as we once were, it wouldn’t be necessary.

    In all things we must consider the consequences of our actions even unto the seventh generation.

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