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‘The student loan bubble mirrors the housing crisis’

http://i.huffpost.com/gen/820976/thumbs/s-STUDENT-LOAN-DEBT-INCREASES-large300.jpg

Here’s a thought-provoking article about how the current student-loan bubble resembles the build up to last decade’s housing bubble — complete with absurdly easy credit, low lending standards, government-backed loans, and large private lenders all too ready to push the risk envelope because they know they won’t be held responsible.

More than likely, it probably won’t — or can’t — end the same way the housing market did, i.e. a total collapse of market demand and prices, sparked and intensified by a faltering overall economy. But the combination of easy credit and escalating prices of higher education is eerily similar to last decade’s run up to the housing debacle. Who knows how it will end?

File under: De ja vu all over again.

One Response to ‘The student loan bubble mirrors the housing crisis’

  • Two things are driving it though: The cost of living/housing and the contraction of government spending in higher education.

    Back when I was in school, funding was slashed 5% a year as Romney looked to “save money”. Out of institutions that are said to add $5 billion annually to the states GDP.

    We need to get over this idea that government can’t create jobs, let alone make good investments in the economic future.

    Look down the list of personal statistics and you’ll understand why the commonwealth is in the top 10 for quality of life in about every category.

    You need to break some eggs to make an omelet. Just make sure you do so efficiently, and with feedback.