Student Debt Bubble - part 3

WILL STUDENT DEBT BE AMERICA’S NEXT FINANCIAL BUBBLE?

by staff writers from Online Colleges
June 27, 2013

STUDENT DEBT IN THE U.S. (PART 3)

The third of a three-article series about steady growth of student debt across the country.  The first article examines the dynamic between reduced state spending, higher tuition rates, and increased student debt levels.  The second article examines some potential consequences of the student debt crisis, particularly at the historical connection between tuition and debt.

Experts continue to debate whether student debt in the U.S. will lead to an economic bubble; one which, when it bursts, will mean dire consequences for the whole economy. As tuition rises, students are simply borrowing more and more; many financial experts worry graduates won’t be able to keep up. Most income levels don’t leave graduates prepared to handle large amounts of debt; when students make their monthly loan payments, they end up with less to spend on cars, houses and other consumer goods. So could paying off student debt cause the economy to plummet? Let’s explore the debt situation today and examine the potential for such a disaster.