Student loan debt will exceed $1 trillion this year, reports USA Today. Students borrowed $100 billion for college in 2010.
Students are borrowing twice what they did a decade ago after adjusting for inflation, the College Board reports. Total outstanding debt has doubled in the past five years — a sharp contrast to consumers reducing what’s owed on home loans and credit cards.
Defaults are up, despite federal forbearance,
“Students who borrow too much end up delaying life-cycle events such as buying a car, buying a home, getting married (and) having children,” says Mark Kantrowitz, publisher of FinAid.org.
“It’s going to create a generation of wage slavery,” says Nick Pardini, a Villanova University graduate student in finance who has warned on a blog for investors that student loans are the next credit bubble — with borrowers, rather than lenders, as the losers.
The highest default rates are at for-profit schools which enroll more lower-income students. Community colleges enroll similar students, but few take out student loans because the tuition is subsidized state and local taxpayers.
