AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (9 comments)

  1. Nick Bradley

    So Student Loan Debt has a CAGR growth rate of 16.2% since Q1 of 2004.

    And solutions? should they take more loans from their parents?

  2. I recently read that student loan debt now outpaces credit card debt in the US. Don’t know if this a good idea or not for these young people to straddle themselves with so much debt early on in life.Globalization has changed the economy dramatically from when I graduated thirty years ago.Right out of high school I landed a middle class paying factory job,them days are gone forever I hate to say.

    1. Nick Bradley

      What is the alternative???

  3. Seattle Sam

    You couldn’t get a business loan from a bank without a credible plan that showed how your investment would pay off in additional cash flow. I see no such criteria being applied to student loans. As I recall, about a third of those who take out student loans don’t even complete their degree program.

    1. Nick Bradley

      Actually, the return on going to college is still high — just not as high as it once was.

      The alternative to going to college is getting worse every day — you can enlist in the military or get into a trade — those are your other options.

      What do you propose?

      1. Seattle Sam

        The “average” return on business loans is still good also, but when you go to see your banker, he’s going to assess the probability of YOU repaying the loan. The expected return of going to college and getting a degree in gender studies is quite different than getting a degree in software engineering. As I recall, when we started issuing mortgages to people with low probability of repayment, that didn’t work out so well either.

      2. Justin Jachowicz

        There should be jobs available for those students who graduate high school and want to work an honest, blue collar, labor job for a living. Saying that all students need higher education is not a solution as most people do not have the amibition to do so and should not be forced to. A fudamental problem in our country is that manufacturing jobs have been outsourced and there is not many options for students other than taking out student loans that they have no chance of paying back with the salary they will make upon graduation. We need to bring business back here instead of abroad!

  4. Nick Bradley

    The girl with a gender studies major is probably going to make more money than the same girl working retail.

  5. from the Fed’s G19 Release, Consumer Credit for January
    http://www.federalreserve.gov/releases/g19/Current/

    checking the 3rd table in the release, under the heading “Consumer Credit Outstanding”, which is not seasonally adjusted, go to the subheading “Major types of credit, by holder” and see that non-revolving credit held by the federal government rose from $526.8 billion in December to $552.7 billion in January, a one month increase of $25.9 billion…that means in January, student debt held by the federal government was increasing at an annual rate of 73%

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