With all the focus on household debt, the albatross of student loans has flown under the radar. But it has ballooned by 511 percent in just over a decade, reports The Atlantic
In the first quarter of 1999, just $90 billion in student loans were outstanding. The amount has skyrocketed to $550 billion.
Most startling about the student loan statistics is how they compare with the recent housing bubble, which was considered one of the greatest debt bubbles of all time, The Atlantic reports.
Adding mortgages and revolving home equity, the housing debt sum grew from $3.28 trillion to $9.98 trillion from 1999 to the third quarter of 2008, according to The Atlantic. Meanwhile, during the same period, the balance of student loans grew by a fact or of six, producing a graph twice as steep of that of housing debt.
The student loan market is not sustainable. Government backing to student loans allows credit to flow relatively freely. Coupled with sharply rising tuition costs, that could mean that a large portion of college graduates will eventually default on their debt over time, according to The Atlantic.
Though higher education is supposed to enhance a nation’s growth, escalating student loan debt might cripple the potential for growth.
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