Living Life in a Bubble

In a recent conversation with my son's friend I was surprised when he told me that he was still paying a student loan debt of $600 per month. I was surprised because he is 38 years old and I assumed that student loans would be long paid off by this age - 15 years after graduation that is!

Well, my assumption was obviously wrong and then a short time later I saw the article below. It appears that the plight of my son's friend is far from unusual.

After reading the article I began to think about the recent housing market bubble. It was kind of the same thing in that people were loaned vast sums of money without regard as to whether they could really handle the debt. But then I began to realize maybe the student loan problem is even worse! The housing debacle at least had some collateral behind it even if it was poor collateral it was better than none. What collateral do student loans have?

You might say that the projected income after graduation is the collateral but my further reading on the subject revealed that only 16% of the degrees obtained are in the highly employable STEM areas.  A large portion of the rest is in fields that have poor employment prospects and are likely to leave those graduates unable to pay off their loans. Additionally, only two kinds of debt are immune from discharge in bankruptcy, taxes and student loans and therefore I  wonder if they can even be legally written off by the issuer? This means that these loans will follow individuals for a lifetime (continually accumulating interest) until they are fully paid.

If the housing problem was called a "bubble" what term can be used to accurately describe this? I don't think "bubble" will do! How about "economic Armageddon"?

After thinking about all this for a while it occurred to me that maybe all my dread is unwarranted. The advent of on line learning could come to the rescue. College costs should surely plummet when students can take course at home with no classroom or actual instructor required.

Well, I'm wrong again!

Look at the article below this one describing the cost of on line course at SNHU, a highly advertised New England college.