下一个将破的美国经融泡沫 - 学生贷款

There is another bubble brewing in our economy, ready to burst – sending shock waves through the financial system once it does. For the first time in recorded history, the total amount of debt from student loans in the United States has surpassed the total amount of credit card debt. The Federal Reserve quietly released some shocking numbers and the mainstream media has ignored it, unsurprisingly. They’ll be sure to ask why once the bubble bursts, but right now it’s more important to discuss Lindsay Lohan, so investigative journalism is out the window. Student loan debt is at an all-time high, coming in at just under $830 Billion dollars (yes, with a B), surpassing total US Credit card debt which is hovering just above $825 Billion.

There are several causes of the record level of debt, with the housing bubble and all of the havoc it brought, being a large cause. With the recessionary economy that the housing bubble triggered, came record levels of people going back to school in an attempt to improve their position in the job market. On top of that is the rising costs of tuition, far outpacing inflation over the last 10 years, to the point where the costs of a 4 year degree at many private colleges will actually outweigh the additional income earned as a result of that degree. In other words, degrees from some schools cost more than they are actually worth in terms of future salary.

Many of the same conditions that lead to the collapse of the housing market are beginning to play themselves out in the student loan market. The federal government has seen the signs clearly, and recently took moves to try and prevent, or at least forestall the inevitable collapse. The government has now taken complete control of the student loan market, but crushing weight of student loans is already being felt, as consumer spending among recent college graduates has come to a grinding halt. Coupled with new bankruptcy laws passed in 2005, student debt is next to impossible to have discharged in bankruptcy. This encourages lenders to loan more, since they have a virtual guarantee of repayment. Many student loans also come with much high interest rates than previously, making them harder to pay off as the finance charges simply compound on debtors.

Another cause, according to the College Board, is that students are borrowing more than ever – too much, in fact. Students are borrowing money for more than just tuition and college textbooks. It seems that many students are borrowing the money without an understanding of what their future earning potential really is, and as such, are borrowing money simply to maintain the lifestyle they grew up accustomed to.

An interesting development is that black students seem to be more susceptible to borrowing an irresponsibly high amount, with 27% of black students graduating with over $30,500 in student loan debt. This is compared to 16% of white students, 14% of Hispanic students and 9% of Asian students graduating with the similar levels of debt. Working under the assumption that poorer students were being forced to borrow more due to a lack of support at home, researchers were surprised to discover that middle class students were actually prone to graduate with more debt than poorer students. That fact lends credence to the theory that students are borrowing more money simply to sustain a lifestyle they grew up with, not understanding the long term financial hardships they are almost guaranteed to suffer under as a result.

Not enough students are taking advantage of Community College credits. Since they have student loans, many students forgo the cheaper alternative, opting instead to go to more expensive universities from day one. It’s possible that students think they’ll get a better education by staying at a university for the entirety of their education. More likely though, students don’t fully realize that they will have to pay that extra $50,000 down the road, and they overestimate their future earning potential. The reality is, most universities allow students to transfer in up to half of their bachelors level credits from a community college, and the same degree is granted as is given to those that pay the extra money to go to the school from the beginning.

Another problem is, not enough students are willing to work their way through school. Perhaps this is simply due to laziness. However, for students (or parents for that matter) that worry that working will be too distracting and have a negative impact on their grades, evidence suggests otherwise. A study titled College Student Employment, published in the Journal of Student Financial Aid several years ago showed that there was little to no impact on the grades of students that chose to get a job while going to school, and in fact those that worked part-time actually had a higher GPA than those that didn’t work at all.

Much like the housing bubble, there is no way to stop it from bursting. College costs are rising out of control at the same time that college degrees are less valuable (since so many people are out of work, having a degree no longer guarantees a good job – or any job for that matter). Since the federal government now controls 100% of the student loan market, there are guarantees on all defaults, so there is no need for lenders to be cautious about who they give loans to, or for how much. With the crushing debt being taken on by a record number of students, upon graduation many consumers will be financially prohibited from actually being consumers, thereby causing a significant domino effect throughout the economy. This is the anatomy of a bubble, and all we can do is prepare for the long term effects.