The Student Loan Bubble is Starting To Burst
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Re: The Student Loan Bubble is Starting To Burst
#2It's as if the value of a formal education has never been lower, the job market is swamped with people that would be more qualified and experienced than you, and the cost has never been higher.
Re: The Student Loan Bubble is Starting To Burst
#3It's as if the value of a formal education has never been lower, the job market is swamped with people that would be more qualified and experienced than you, and the cost has never been higher.
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Re: The Student Loan Bubble is Starting To Burst
#4Re: The Student Loan Bubble is Starting To Burst
#5Misplaced incentives all over the place. This one is going to be messy. But as many people have pointed out, much more slow moving than the previous financial bubble.
Re: The Student Loan Bubble is Starting To Burst
#6Misplaced incentives all over the place. This one is going to be messy. But as many people have pointed out, much more slow moving than the previous financial bubble.
This one is going to be messy.
As someone who really hasn't thought about it very much, I'd love for someone to expand on this. What's the expected fallout? In the housing bubble, many people lost the places where they lived. But it's not like someone can "take back" your education if you default on the loan, so what happens instead?
Re: The Student Loan Bubble is Starting To Burst
#7Misplaced incentives all over the place. This one is going to be messy. But as many people have pointed out, much more slow moving than the previous financial bubble.
This one is going to be messy. As someone who really hasn't thought about it very much, I'd love for someone to expand on this. What's the expected fallout? In the housing bubble, many people lost the places where they lived. But it's not like someone can "take back" your education if you default on the loan, so what happens instead?
The development of adult life is stunted. It takes longer to afford to rent an apartment on your own, buy a house, buy a car, get married, start a family, start a business, etc. If you're college educated you probably have a broad support network. So instead of being homeless, you move back in with your parents.
So instead of losing your home, you may never get it in the first place.
The consequences of defaulting on a student loan are also quite severe.
Re: The Student Loan Bubble is Starting To Burst
#8Misplaced incentives all over the place. This one is going to be messy. But as many people have pointed out, much more slow moving than the previous financial bubble.
This one is going to be messy. As someone who really hasn't thought about it very much, I'd love for someone to expand on this. What's the expected fallout? In the housing bubble, many people lost the places where they lived. But it's not like someone can "take back" your education if you default on the loan, so what happens instead?
It's not the impact on the individual who's defaulting that is the kicker, it's more the effect on the originating bank and the parts of the financial system that packaged up that loan with others of its type into financial products that are incorporated into the investment strategies of pension funds, mutual funds, municipalities, etc.
Re: The Student Loan Bubble is Starting To Burst
#9Just because people shout "bubble" at any exponential growth phenomenon doesn't really mean we can tell when "the bubble bursts".
Crashes in growth curves are always unpredictable. You can predict that there will be a crash, but telling when it's going to happen, that's the hard part....
Re: The Student Loan Bubble is Starting To Burst
#10Every kid I come across that plans to go to college I tell them to find the cheapest route possible. Start at either a good community college or go to a public in-state school. You can still go to a good college for a reasonable price, but it seems more and more that kids are taking the more expensive route (dorms, out-of-state, etc).