At least the graduate in the picture has a job. Being that is involves wearing a chicken suit, it might not produce enough scratch to pay off his share of the more than $1 trillion dollars in student loan debt now owed in our country.
The issue is on this site because now, more than ever, it is difficult to get student loans discharged in bankruptcy. My colleague Chip Parker wrote here about student loan dischargeability in Chapter 7 bankruptcy.
There is a student loan bubble, comparable to the housing bubble, the bursting of which splattered us all. The short version, as the government subsidized the cost of college, more and more, unsurprisingly, more and more folks went to college on the easily borrowed dime of the taxpayer.
To check out the status of the student loan crisis in your state, check the projectonstudentdebt.org site. Click here: student loan crisis.
Being that they were not spending their own money, the colleges had no problem increasing tuition by way more than the rate of inflation. It appears most of the increase went to: more and higher paid administrators.
Australia has a different student loan policy: each student has “x” amount of dollars for undergrad education. You use it up, it is gone. You can get more for grad school. This way, the colleges do not just raise the rates knowing the government will just up the loans it grants.
Make no mistake: whether or not the bankruptcy laws are changed to make student loans dischargeable, the trillion dollars out there will NOT be repaid.
As it is, we have sold college grads a bill of goods. “To get a good job, you need a good education.” Putting to one side the question of what is a good education, a generation has gone into hock big time, only to come out to jobs wearing chicken suits. If they are lucky.
They cannot buy houses because they have to repay the loans, so they go back to live with mom and dad.
The President’s student loan program, as per usual, is laughable, saving the average grad less than $10 per month.
This will change, but how?