The amount of student loan debt in this country is approaching crisis levels. In fact, student loans could very well be the next big bubble to burst.
While we’re right to praise the merits of education and the value of learning, it’s smart to ask – what about the cost?
The total amount of student debt is second only to mortgages in terms of the highest amounts of consumer debt out there. It is more than credit cards and auto loans.
Last year there were 44 million student loan borrowers, with $1.3 trillion in outstanding debt. The average student borrower in 2016 had $37,000 in debt, which is up more than 70 percent from a decade ago. Some 5 percent of borrowers owe more than $100,000!
On top of that, in Q4 2016 the student loan delinquency rate was 11.2 percent, the highest of all debt types. More than one in 10 borrowers are 90 or more days late on their payments, and an astounding 3,000 borrowers default on their loans every day.
The easy flow of student loan money was ushered in primarily by two Democrat presidents (Clinton and Obama). Perhaps unsurprisingly, we’ve seen tuition costs since outpace all other commodity prices.
So, what does it all mean? It means student loan debt is out of control and parents needs to think long and hard before taking out loans for their children’s education. They could be paying for it for decades.