I predict Student Loan Debt - The Next Economic Crash Bubble

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After the real estate bubble that just burst, I'm seeing an alarming trend - college kids taking out 40k+ in loans and then defaulting on them. That's going to be the next economic bubble. The government will bail out Sallie Mae, but the kids will be have this debt on them for the rest of their lives. They'll have the collection agency after them and have their wages garnered.

Will this bubble be as big as the real estate bubble?

^^ Oh dear, I believe I am certainly a student. However, I believe the fees are of less cost within England as opposed to America. Also, I am living with my happy parents as opposed to living at University. Therefore, I believe I do not use quite as much monies. ^^ However, I am very sorry as I am rather confused. Do you perhaps mean that the interest rates will increase? I am very sorry for being silly.

The difference with this bubble though is that the repayment is after receiving the service. What will happen is that the criteria for student loans will be tightened and as such, not everyone will get one forcing colleges to lower their prices (or not raise them as sharply).

As for the students with the debt, this will keep them from making large purchases prolonging the problems with the housing and auto markets. True, some will be hounded by collectors and possibly have money garnished but to be honest, Sallie Mae is the best creditor of all of them to work with.

Quite Frankly, I think you Yanks should worry about a "Medical" bubble! With all the illegal immigrants not given citizenship and not paying taxes combined with bad economic times ie lower standard of living combined with the high cost of tech, The whole system might just explode!

Those student loan places are worse than the Mafia! They managed to bribe congress enough that they can even garnish Social Security and bankruptcy doesn't cancel them. The only way to get out of them would be to flee the country. Luckilly I finally paid mine off last Feb.

No one (or hardly anyone) defaults on college loans; bankruptcy does not eliminate those debts. Sallie Mae is making a killing, there will be no need for a bailout of them.

Ffffff
I'm afraid I'm contributing to this one. XD;; Don't worry though, I'll pay it off. But yeah, I can totally see this happening. D: D: D:

The debt bubble, and consequently the real estate/commodities/market bubbles were a long time coming. From 1995 to 2007 consumer credit increased by ~13%/year, w/ no commensurate increase in wages to support this increase. I can't find mortgage info earlier than 2004, but the run-up from then until 2007 at ~10%/year. Public and private debt has increased tremendously, more than doubling over the past decade or so, with the end result being ~10-15 trillion in debt accumulation on top of the ~15 trillion already present in 1997. This was of course exacerbated near the end of the bubble by NINJA loans, a breakdown in the rating of CDOs, and leveraging approaching 30:1 in some cases, and after all this fraud was exposed, there was no where to go but down. After people couldn't continue to put things on plastic and refinance their homes, that source of funding was all but wiped out and the spending that was supporting the market, the real estate bubble, and the commodities bubble wasn't there anymore.

Google Gerald Celente or go to YouTube and type in Gerald Celente.

Be prepared to be scared out of your wits at the economic problems that are coming at us head on like a freight train.

He talks about the "bailout bubble" where Obama is printing trillions of dollars out of thin air and giving the money to the bankers. Ron Paul says the same thing.

When that bubble bursts it is all over. Riots, revolution and the end of America.

it won't even be a bubble. do you have or have you had student loans? They're about the easiest loan you could pay back. Student loans and Mortgage loans are two completely different animals. They have much smaller interest rates and your creditors will work with you if you can't pay. You can defer payments, you can get a forbearance, they'll set up loans based on your income. Unless every former student in the country decides to shuck responsibility at the same time, your prediction won't happen. The only way people will be defaulting on loans is full scale economic collapse, and by then Sallie Mae and any other lender will have bigger problems. Beside, you can't garnish the wages of the unemployed.