Student debt are often compared to the housing bubble; ready to burst at any moment, especially given the extensive amount of loans with no protection to the borrower. When you think of bubbles, you think of soft, fragile objects that pop as gracefully as they float. When you think about the student debt problem in America, it reminds me more of millions of glass bottles shattered beneath a boot. Not exactly the same image.
Colleges and Universities may charge whatever they like for the degree, and it doesn’t harm them if the person can’t repay it. And nearly half cannot. Bookies across the world are trying to recreate this formula. Figure out how to charge high interest on high loans and yet take no hit when the borrower can’t pay it back. It’s brilliant. Yet it’s no wonder that those graduating from college can’t find jobs, move out of their family’s house and are projected to have a lower standard of living than their parents for one of the few times in our history.
Even those finding jobs have little hope of repayment in the next decade or more. Banks and money scandals around the globe got off free of charge for facilitating the home loan disasters and wall street crash in the past decade. Now we are looking at another devastating crisis in our future. What happens when these loans burst? They don’t disappear in bankruptcy, we have no foreseeable loan forgiveness programs for those who “give back.” What shall we do from here?
By: Courtney Kidd, LMSW
SJS Staff Writer