Two months ago, we posted an article revealing that Ben Bernanke's son was about to graduate with an astonishing $400,000 of student loan debt.
Unfortunately, that trend is becoming the norm for the majority of students (nearly two-thirds of all college students in the States) whom bid farewell to their alma-mater's with $25,000 or more in debt.
This year, total student debt surged to $867 billion and the Consumer Financial Protection Bureau says that over $1 trillion in loans remain outstanding presently.
Billionaire HDNet cable-television channel owner Mark Cuban warns that our nation's colleges and universities are now in the wake of extreme adversity because an overwhelming number of students are unable to repay loans accumulated during their college years.
Cuban compared higher educations to flipping houses: “At some point, potential students will realize that they can’t flip their student loans for a job in four years.” When that point comes, expensive, private, and ivy league schools will suffer the losses due to a stark decrease in enrollment.
Additionally, Cuban asserts that for-profit education companies are especially at risk when potential students begin looking elsewhere in order to find a school more economically realistic for a post-graduate to set a sustainable budget.
Mr. Cuban himself says he attended business school at Indiana University's Kelley School of Business because the institution's tuition was among the lowest for top-10 business schools back when he attended in the late 70s and early 80s.
Credit-card and car debt lag far behind educational debt, according to a quarterly data report from the Federal Reserve Bank of New York. Take a look here at Bloomberg's “Chart of the Day” to see just how severely student loan debt is affecting America's shaky economy.
This chart here shows the trend of "Federal Student Loans Outstanding % of GDP;" from 1980 to present day with predictions up to 2020.
No comments:
Post a Comment