Has The Student Loan Market Become A Bubble? 10 Things To Know

A full ten years after the 2008 sub-prime mortgage crisis, there are headlines of record low unemployment and a booming economy. Of course, headlines can be misleading and statistics can veil sobering individual realities. One area that has only worsened over the decade and threatens that recovery: student debt. There are signs of an expanding bubble in the student loan market and bubbles eventually will pop.

The housing market bubble popped in 2008 and since then JCKLAW firm has helped hundreds of clients who owned homes or investment properties manage the fallout that nearly wiped out the economy. We were successful in saving many homes and mitigating damages arising from foreclosures and overwhelming debt in the lives of our clients. We still are. Now we steady ourselves for another bubble and potentially another pop.

Look at these 10 facts:

  • Average debt at graduation is currently around $30,000, up from $10,000 in the early 1990s.
  • The country’s outstanding student loan balance is projected to swell to $2 trillion by 2022. TWO TRILLION DOLLARS.
  • Indicators predict a large portion of it is unlikely to ever be repaid; nearly a quarter of student loan borrowers are currently in a state of delinquency or default.
  • This default rate more than doubled between 2003 and 2011.
  • 40 percent of borrowers are expected to fall behind on their loans by 2023.
  • State funding for public colleges fell by $9 billion between 2008 and 2017, and schools have filled the gap with tuition hikes.
  • Last year, for the first time, half of all states relied more heavily on tuition than on government appropriations to fund higher public education.
  • On average, Americans now spend $30,000 per student a year, twice as much as the average developed country.
  • Borrowing is unlikely to slow any time soon.
  • The cost of an education in this country is only rising.

The reality of these facts for the individual is that many Americans are unable to buy homes and cars, start businesses and families, save or invest due to their student loans. Of course, a national solution must be advanced by the national and state governments. We can only vote and cross our fingers. But on some level, you must take control of the reins. Be proactive and find out what options you have in the servicing of your student loan debt. JCKLAW firm can provide strategies in dealing with such circumstances. We have done so for many clients and will continue to do so.

If you are interested in finding out more about student loan debt and how best to deal with personal finance generally, contact our office at 718-539-1100 or email us at info@jckimlaw.com.