The Next Bubble

You think the last housing bubble was enormous? Meet the education bubble.

The next subprime crisis will come from defaults on student debts, starting with for-profit colleges and rising to the Ivy League. The parallels with housing are striking. In both, the written warnings aren’t understood, especially on penalties and interest rates. And in both, it’s assumed that what’s being bought will rise in value, in one case the real estate, in the other the salaries which will accrue with a degree. One bubble has burst; the second is already losing air.

As a Boston real estate broker, I’m very concerned about this. I mean, how will these students be able purchase a condo five – ten years from now?

File Under:  Please convince me that student-loan debt bubble isn’t similar to the sub-prime mortgages bubble.

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