Student Loan Debt: Crisis or Overblown Hype?

Bubbles date back centuries, with the first on record occurring in 1634 in Holland, where the tulip market collapsed, leading to major losses from hundreds of speculators. Over the course of history, bubbles have popped and swallowed major economies, just as the real estate collapse of the mid-2000s did to the U.S. economy.

Of the 241 million people in the United States who have a credit report with Equifax, approximately 15.4% -- or 37 million -- hold outstanding student loan debt.


By Adrian Nazari

Prepare For An Unprecedented Wave Of College Bankruptcies

That attention is deserved when a level of debt surpasses $1 TRILLION....

It's far too easy to borrow money for college.  Did you know that there is more outstanding debt for student loans than there is for Auto Loans or Credit Card loans ? Thats right. The 37mm holders of student loans have more debt than the 175mm or so credit card owners in this country and more than the all of the debt on cars in this country. While the average student loan debt is about 23k. The median is close to $12,500. And growing. Past 1 TRILLION DOLLARS....  

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By Larry Doyle 

Number of the Week: Student Loan Bubble

368%: The jump since 2007 in the measure of consumer credit held by the government comprised primarily of student loans. 

 

Issuance of student loans has soared in recent years, hitting $867 billion at the end of 2011, according to an analysis from theFederal Reserve Bank of New York, more than credit cards or auto loans....

By Phil Izzo

Wall Street-Inflated Student Debt Bubble Hits $1 Trillion; Debtors Rally for Relief

The collective weight of American student debt is now over $1 trillion, and that weight is a drag not just on those paying the debt, but on our entire economy. It's hard to calculate exactly, because the lenders are notoriously unwilling to hand over their data, and with students defaulting at ever-higher rates, interest rates and fees are always changing, adding constantly to the weight of the burden college graduates (and those who didn't graduate but still have to pay off the loans they took out in more hopeful times) carry.

How did we get here, with more student debt than credit card debt, with student loans rising twice as fast as mortgage debt at the height of the housing bubble? Recent graduates face terrifying unemployment number.

Konczal pointed out that the government makes a profit somewhere around 13 percent for each dollar of loans, and because the loans are not dischargeable in bankruptcy and Social Security payments can even be garnished to make them up, default may even be more profitable for lenders than borrowers making payments on time.

....student loans are repackaged, bundled and sold at auction. “The people who buy it are mainly the biggest banks in the world, hedge funds, etc.”....

By Sarah Jaffe