When the student loan bubble explodes

[Pombero]

What will happen? Will it be worse than the housing and credit crisis? I'm very excited about the bubble exploding. College students, through no fault of their own, followed the advice of many that a higher education led to quality jobs. Now that the recession is entrenched deep into our daily lives, and there are no signs it will get better anytime soon, how does the government and private student loan companies think millions of students will be in the position to make the monthly payments? They're all going to default. Taxpayers will have to bail us all out just like the banks, and our debts will be erased! :thumbup1:

[Workers-Control-Over-Prod]

This thread belongs in Economics btw.

The student debt bubble in the US will most likely end in negotiations of the debt, and mean a bleak future ahead for the USA since there will be millions of peoplke who couldn't afford university education when the bubble bursts. It will just be one more further issue tumbling against the capitalist system. It won't most likely end in a massive crisis of banks since there is no material production, but there will most likely be a decline in enrolled students leading to further societal decay etc.

[agnixie]

Societal decay won't really do all that much I feel. The big capitalists have effectively insulated themselves from reality as it stands. It will take something really enormous to cause a real enough crash.

[Pombero]

Since there are no living wage jobs left in America, especially when one has student loans with minimum payments of $400+/month, there will be massive defaults. I read something the other day that student loan defaults are on the rise. Once enough default, the system will have no choice but to crash hard. :thumbup1:

[Vladimir Innit Lenin]

You're very excited about it are you? Fuck you. I'm sure you'll be very excited when its your kids and grandkids on the dole for their remaining 40 years of working life.

[Blake's Baby]

Most student loans will never be repaid. Don't know what the situation in the US is, but in the UK students are accruing bigger and bigger levels of debt, but only have to repay them if they earn more than £22,000 (about $35,000 US I guess, a little under the mean wage but above the earnings of most people). Is the situation in the US very different? A lot of the people I knew at college said 'I'm going to take my maximum loan, it doesn't matter because I'll never have to pay it back'.

However, the actual ammounts involved are pretty small I reckon - at least in the UK. A quick search reveals that total student debt in the US is likely to reach a trillion dollars this year. Isn't that the same as the defence budget? That's quite a lot.

Not sure what the impact of 100% default would be though. I'm presuming that they've factored into the calculation the idea that a lot of people are never going to pay their loans back.

[Deicide]

Thank fuck I decided to do my degree with the Open University. My undergraduate degree will cost slightly over 3k. I didn't even need to take a loan out. No 25k debt for me. Yay.

However, it means I miss out on a lot student parties and sex with women from the upper-classes.

:crying: