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HousingWatcher
@
2011 May 3, 1:23pm
And for anyoen who doubts the existence of a student loan bubble, jsut read this gem:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/04/30/MN4G1J8PRR.DTL#ixzz1LJFiq0xI
MAGA
@
2011 May 3, 2:23pm
A friend of mine in Chicago is paying for her daughter to attend acting school in Los Angeles. Very pricy school. Not to mention living in SoCal for the next three or four years.
http://aada.org/home/home.html
My guess is that by the time she gets her acting "degree" (???), it will have cost well over $150K. Then what does she do? Get a job working fast foods?
I'm amazed her parents are funding this scam. No telling how many loans are involved. The Dad's (Bio and Step) I'm sure have been told to stay out of it.
My suggestion to my friend is that maybe her daughter should look into serving in the military for three years. Then she would have some educational benefits in which to pay for school. Assuming this "school" is approved by the VA.
Suggestion did not go over well.
terriDeaner
@
2011 May 3, 2:44pm
NEW YORK — The average college graduate leaves school with $24,000 in debt
That's it!? I'm surprised it's not more considering....
Over the past 25 years, college tuition and fees have risen three times as fast as individual family income. And over the past decade, tuition has increased at a rate of 5.6 percent per year beyond the rate of general inflation.
Not everybody is ignoring it anymore. On a flight a few months ago I watched a 1 hour news special on the topic - one of the major news networks forget which.
I'm not sure "bubble" is the right word, but the ever rising levels of debt being offered to students to cover ever rising education costs are a large part of the CAUSE of those rising education costs, much like with the housing bubble.
terriDeaner
@
2011 May 3, 3:20pm
you can default and file bankrucpcy as many time as possible, but students loan can almost never be discharged. It’s 99% risk free to the lender and 100% risky to the borrower. Of course, because the loan cannot be discharged is also the reasons the rate of interest is so low and access is easy.
= Bailout guaranteed?
HousingWatcher
@
2011 May 4, 2:45am
That $24,000 can quickly grow during deferments when the bororwer has no job for several years. $24,000 is what they have in debt on the day of graduation. PLus, in many cases, those students will go on to grad school where their loan balance will quickly skyrocket. Law school will add $120,000 to that balance. Med school will add $250,000 to that balance.
terriDeaner
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2011 May 4, 5:38am
People seem to think I’m harsh towards those who bail on their mortgage obligations. Fact is that if you’re using a loan to pay for school (and very few these days CANNOT avoid this), you’re married to that debt for life.
Out of the blue... know anyone who used mortgage debt to pay off their student loans?
Comments 1 - 7 of 57 Next » Last » Search these comments
Consdiering this is a forum full of people who claimed to spot the housing bubble before it burst, why is anyone not talking about the student loan bubble? Trust me, when it burst, it is going to be VERY ugly. You have thousands, if not millions, of bororwers out there whoa re going to default. It's just a matter of time.
Peter Thiel's College Bubble Theory Gains Few Believers
NEW YORK -- The average college graduate leaves school with $24,000 in debt and one in 10 are unable to find work of any kind. Recently, student loan debt exceeded credit card debt.
Much like the housing bubble, when home buyers took on outsized mortgages they were either lured into or which they knew they could ill afford, all in the service of realizing the American Dream of homeownership, students today are struggling with piles of educational debt assumed in service of a similar goal -- the American Dream of a college education.
According to the College Board, 70 years ago there were 1.5 million students enrolled at American universities. By 2006, that figure had swelled to more than 20 million. Meanwhile, the cost of tuition has grown steadily higher. Over the past 25 years, college tuition and fees have risen three times as fast as individual family income. And over the past decade, tuition has increased at a rate of 5.6 percent per year beyond the rate of general inflation.
Recently, with tuition costs rising and debt levels increasing, the skepticism has reached a boiling point.
Amid this backdrop, a Silicon Valley-based venture capitalist named Peter Thiel has inserted himself in a debate about whether a college bubble exists.
Namely, Thiel believes that a lack of innovation will result in long-term economic stagnation. He also argues that the housing bubble, which inflated the real estate market and sent prices soaring and finally crashing back to Earth, now threatens to dismantle higher education.
“A true bubble is when something is overvalued and intensely believed,” explained Thiel during a recent interview with TechCrunch. “Education may be the only thing people still believe in in the United States. To question education is really dangerous. It is the absolute taboo. It's like telling the world there's no Santa Claus.”
Thiel's slant has infuriated some, and emboldened others. But is he right?
http://www.huffingtonpost.com/2011/05/03/college-bubble-burst_n_857082.html
#housing