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Student Loan Bubble Caused by Government Intervention in Higher Education

Posted by Steve Markowitz on May 31, 2013

Infowars.com posted detailed information concerning the student loan bubble that is about to pop.  The information includes:

  • There are 37 million Americans with outstanding student loans.
  • Of the outstanding student loans, the US Department of Education reports that 11% are at least 90 days delinquent.  This record high is double what it was 10 years ago.
  • Total student loans exceed $1 trillion, the second greatest consumer debt after mortgages.
  • In the past 10 years the amount of student loan debt has risen an incredible 275%.

student debtDebt that does result in future productivity gains becomes a long-term drain on the economy.  One reason is that highly indebted individuals cannot consume products or services.  While the education industry claims that a college degree is necessary to better one’s future earning power, the facts tell a different story.  For example, half of all college graduates work in jobs that do not require a college degree.

One statistic is very telling relating to the growing student debt.  In the past 35 years the cost of college tuition has risen faster than even the skyrocketing cost of medical care.  The reason is simple; governmental intervention.  The government, through grants and subsidized loans, has made easy for the educational industry to raise prices.  Had the government not subsidies the educational industry they would have been forced to supply services at lower prices for them to be affordable.

The negative impact on over indebted individuals and the drain the debt will place on the economy for years are just two issues America will face from inept governmental policies.  In addition, much of this debt has been taken on by the federal government adding to the taxpayers’ liability.

The federal government has completely mismanaged higher education and its industry.  Remarkably, the American people, through the election of this President, have turned over an even larger part of the economy, healthcare, to the same inept government.  Those that expect different results are out of touch with reality.

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