Student Debt Bubble - part 3

OTHER CONSEQUENCES OF THE CRISIS

Yet even if prices don’t come crashing down and the bubble never bursts, graduates will face stagnant salaries and potentially long periods of unemployment. It’s difficult to envision an upturn in spending if graduates continue to leave higher education with unmanageable loan payments. Analysts are especially worried about the housing and automobile markets, which won’t see growth in purchases so long as students struggle. As students cut their budgets, rely on rentals, and use public transit, it remains unlikely that automobile and home purchases will rise. In lieu of a crisis, a depression in these key industries could indicate student debt will drag on the economy for years to come.

A true student debt crisis could arise from factors like inflation and the rising price of tuition, to name only two. If things continue along the current course, massive debt will not be a sustainable part of education for new generations of students. Something’s gotta give. The only question is whether student debt will be a hard and fast crisis or a drawn out burden we must shoulder.