For the first time ever, the amount of student loans taken out last year exceeded $100 billion.
For the first time ever, Americans now owe more on student loans than on credit cards! This having been reported by the Federal Reserve Bank of New York.
For the first time ever, total student loans outstanding will exceed $1 trillion this year.
Reported on ZeroHedge.com, “It’s going to create a generation of wage slavery”. “So… debtors know it’s a bubble, lenders know it’s a bubble, everyone knows it’s a bubble, yet it is growing faster now than ever before.”
What explains this insatiable demand for this kind of debt? Well, it’s cheap, it’s easily accessible (the collateral is education), and a student can take out a loan, yet use part or all of the balance for tangential purchases (that iPhone 4S sure would make me cool). But this, like every other debt, comes at a price. A generation of wage slavery.
Young people are entering adulthood more in debt than ever before. They have an expectation that the tens of thousands of dollars in student loans for a college education will turn to gold as they enter the workforce. The problem is… ‘what workforce?’ Good luck with your expectations of immediately landing that Sr. Manager or Director position. After all, your educational pedigree is stellar, right? Particularly in today’s economic environment, this thinking is delusional.
It may be a false notion to believe that every young adult must obtain a higher college education degree in order to fulfill the young adult’s capacity to perform to their optimum ability in today’s modern society and workplace. Not everyone’s DNA is meant for college either, although most parents today assume that their ‘junior’ must attend.
It is unfortunately an employers market today, and a college degree is often a required prerequisite. However, there comes a point where you wonder if spending the big bucks on a burdening loan at such a young age is the best thing for the long term outlook. I suppose that one could consider a less expensive school while still earning a degree, or perhaps finding a way to enter the workforce early while building on-the-job experience before others do (which is another prerequisite for most jobs in a particular field… e.g. 3 to 5 years experience in ‘xyz’).
There are no simple answers to the dilemma of determining the most frugal but effective way to assure one’s-self a decent job while entering the workforce. However I do question the automatic assumption that every kid needs to go to the fancy big-name school and burden themselves with enormous debt while only in their late teens or early 20’s. Ouch.
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the years experience requirement is always the kicker for me. How do you get those years if you can’t get in (even in a good economy) to get the experience?
The way for me was doing an unpaid internship. wait, isn’t that slavery? nope. got student class credit for it. So even if a job requirement doesn’t need a degree, you need to attend school long enough to legally work the required experience years.
here’s a thought – try to view this as a very large scale experiment in ‘natural selection’. Those that are not prepared for the inevitable downward spiral, as history would teach us, will be weeded from the pool.
too bad though, that the whole thing [intelligent human thought?] is being reduced to 140 characters….or less
what a world
Get the government out of it. End the program and sell off the existing loans to banks. It was a stupid idea to begin with and now that this is clear to everyone lets end it.
We all know that student loans are a very helpful tool when it comes to educational career, however lots of grad students today that have taken the loan became indebted and jobless. Questions like: How we prevent this type of crisis? Are their any actions from the government to solve the student problems nowadays? How will they able to get off from being indebted? are still existing on the students mind. Hope there would be a proper solution for this one as soon as possible.
@Liz, “How we prevent this type of crisis?” Answer: Too late – it’s already a huge bubble.
“Are there any actions from the government to solve the student problems?” Answer: Government is not the solution. The solution is for people to make better, smarter decisions and to think twice before taking on a loan. Banks should also be more scrupulous when deciding if people are qualified to actually pay back a loan.
“How will they be able to get off from being indebted?” Answer: Pay the monthly payments until the loan is paid off.
Hope this helps…
truth is you can’t. Luck of the draw, as it is in life. The problem is over population. No everyone can have a nice job, nice house, nice well off parents.