Banks gave money to needy college students without considering whether borrowers could repay, then bundled and resold the loans to avoid losing money when students defaulted—lending practices that mirror the run-up to the subprime mortgage crisis.
The U.S. once led the world in free education. The recent debate in Washington about whether to let student loan interest rates double ignores the fact that many students already cannot afford a college education or advanced training.
In the aftermath of the stock market failure of 2008, another type of economic bubble is swelling: student debt. And it’s no surprise, since Congress has done nothing to change the lending practices that brought the U.S. to the brink three years ago. (more)
According to the Project on Student Debt, the average arrears for graduating U.S. students is $24,000, but that figure is low for many who are entering a state of sustained debt peonage during the wonder years of young adulthood. (more)