I've heard several reports this weekend about the student debt crisis. This is one of them. I think they all came from the announcement that the amount of student debt now exceeds all credit card debt and is north of $800 billion. Yup, we're closing in on a trillion. A report from the show Marketplace on NPR considers the consequences of so much debt: student move in with parents -- which means they aren't renting apartments or buying houses, they aren't buying furniture or wide screen TVs. The economy takes a hit.
Part of the problem is the federal government providing fewer grants to students. Part of it is the cost of education (something like 25% of a middle class annual income where it used to be 4% probably about the time I went to college). And part of it is for-profit education.
Jeff Bryant of Campaign for America's Future takes a look at the for-profit education scam. Yeah, these institutions graduate -- some -- students who get jobs and pay off their education loans and become productive members of society. But the whole thing seems to be a method to suck dollars out of the federal treasury and leave students with mounds of debt. The institution gets paid up front, the student suffers for a long time. This student debt is now being bought and sold just like mortgages were a few short years ago. The debt load is unmanageable for most students and many are about to default. And we know what happened when mortgages defaulted.
Amazing, the people sucking dollars out of the gov't are the ones saying the gov't should be smaller.
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