Moody’s has downgraded student loans’ value (pdf), predicting rising delinquency and default rates, even if the economy recovers in the next few years.
“Unless students limit their debt burdens, choose fields of study that are in demand, and successfully complete their degrees on time, they will find themselves in worse financial positions and unable to earn the projected income that justified taking out their loans in the first place.”
Tuition will continue to outpace inflation for the next 10 years, the ratings agency predicts, even with online courses lowering costs for some students.
Economists worry that “easy credit, high tuition and poor job prospects are creating a bubble, writes Mike Riggs in Reason.
Demand for college degrees remains high. But a jobless recovery — or a double-dip recession — will make it hard for many graduates to find jobs and repay their loans.
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at 10:07 am
[...] more defaults, Moody’s has downgraded student loan portfolios. “Unless students limit their debt burdens, choose fields of study that are in demand, and [...]
at 9:30 am
[...] analysis of the current status of student lending, including a pessimistic outlook on its future (via Community College Spotlight). While the analysis doesn’t say much that you haven’t already heard here (rising debt [...]