CarpeDiem writes about this often. I didn't pay a lot of attention because the issue no longer affected me: college loans.
I assume CarpeDiem will post this story/link if it already hasn't.
The journal provides a small graph that is worth a thousand words. It shows three sources of American debt: credit card, auto loan, and student loan.
Credit card debt has been on a striking downward trend since 2008 (which I can explain if anyone cared -- no, don't ask).
Auto loans had a similarly striking downward trend between 2008 and 2011, but it now increasing, albeit slowly.
But student loan. Wow! It looks like the trend line for Bakken oil production -- about a 45-degree angle, and it's a a straight line. No recession effect on student loans, or costs, I assume.
Just had a son complete college and I can share my experience. Due to the drastic cut in Pell Grants and Stafford loans coupled with the high rise in tuition the need for help increased for us in the last four years. Also since the federal government has taken over the student loans the realistic avenues for help have changed. A parent must take out parent loans unless they don't want to have the dependent. The only out is cash or have poor credit, then the student can take out federal backed student loans. The end result is if you are not financially well off and can't pay cash, the parent is forced to take parent loans or, give up the dependent even though you still pay insurance, living expenses (still the students parental duties) the child does not go to college. No up side for the parents at all. Bad situation as far as I am concerned.
ReplyDeleteThat's very interesting. It seems I have heard something about this before.
DeleteNot playing politics here, or pointing the blame at anyone, it seems that for some reason Washington talks about the need for education but has been implementing policies that result in higher costs. I wonder if some smart Congressional staffers have found a new revenue stream for the US government, the interest on student loans?
I assume student loans are about 6% -- I could be way wrong here -- and with interest rates where they are today, a 6% return is pretty nice.
Again, I'm way out of my depth here, having not followed this issue at all. CarpeDiem probably has many, many posts on this very subject.