08/06/2010
As you sort through the wreckage of the housing bubble, I see another, like bubbles looming student loan crisis. Driven by a combination of criteria for the lower unrealistic expectations and the proliferation of for-profit universities, banks and the crisis will likely cost the federal government considerable sums. It will also be subject to borrowers crippling debt for decades after they receive their diploma.
The Americans We expect them to the house of one and receive a college education (in addition, health care). Indeed can pay or not the decision was. Financial institutions, taxes, hunting and state guarantees, so they began their subprime adventures. The economy is producing fewer jobs and their impacts on the students be able to repay their loans is similar to subprime borrowers. No job. Not> Repayment of the loan. Worse, because the student loan debt is usually not initiated by the bankrupt, the debt students can work as part of this decades after graduation.
The debt through student loans, non-profit institutions and subprime mortgages are remarkably similar. Both Industry and Academia-profit colleges rely on subprime loans to borrowers with low incomes, are less likely to betheir obligations. (University of Phoenix, for example, 1.8 billion U.S. dollars in federal student aid last year already.) Repayment of mortgage loans require a subprime housing market, always appreciated. Repayment of debts to pay tuition profits requires the students to get well-paid job after graduation. In fact, many students borrow money for tuition has never been a university degree. (For a counter Phoenix University, a rate of 86% drop-out problems.) AAnyway, the taxpayer cost of defaults.
The rescue of subprime borrowers cost hundreds of millions of dollars and the debt of the federal government for-profit guidance, taxpayers and the cost. Some analysts predict that profit targets for the debts of the tender could not exceed 275 billion U.S. dollars over the next decade.
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