Bernanke’s Son Will Graduate With $400,000 of Student Loan Debt
Michael Snyder (Editor of The Economic Collapse)
Who ever imagined that Ben Bernanke would become a poster child for the student loan debt problem in America? Recently Bernanke told Congress that his son will graduate from medical school with about $400,000 of student loan debt. For most Americans, such a staggering level of debt would almost certainly guarantee a lifetime of debt slavery. Unfortunately, Bernanke’s son is not alone. The Federal Reserve Bank of New York has revealed that around 167,000 Americans have more than $200,000 of student loan debt. The cost of
a college education has increased much more rapidly than the rate of inflation over the past several decades, and most students enter the “real world” today with a debt burden that will stay with them for the remainder of their working lives. In an economy where there are so few good jobs for college graduates, it can be incredibly difficult to get married, buy a house or afford to have children when you are drowning in student loan debt. It would be hard to overstate the financial pain that student loans are causing many young adults in America today. The student loan debt problem is a national crisis and it is not going away any time soon.
The Federal Reserve Bank of New York says that the total amount of student loan debt in America now exceeds the total of all credit card debt in the country. It also exceeds the total of all auto loans. The New York Fed also says that there is a total of $870 billion owed on student loans in the United States right now. Other sources claim that the total amount of student loan debt in the United States will soon exceed one trillion dollars. Either way, we are talking about an extraordinary amount of money.
Sadly, approximately two-thirds of all U.S. college students graduate with student loan debt these days, the average at graduation being approximately $25,000. That might not be so bad if the economy was full of good paying jobs for college graduates, but that simply is not the case. As college attendance continues to soar, the student loan debt problem continues to get worse. U.S. college students are borrowing about twice as much money as they did a decade ago after adjusting for inflation. The system is failing our young people. Many young college graduates have found themselves unable to make their payments or have simply decided to quit making payments. Officially, the student loan default rate has nearly doubled since 2005. And a report from the Federal Reserve Bank of New York says that approximately one out of every four student loan balances are past-due at this point.
But it isn’t just young people getting into trouble with student loan debt. These days, financial institutions are increasingly targeting parents. Federal student loans often do not cover all of the expenses of college in this day and age, and so increasingly loans are being made to parents to make up the difference. Student loans made to directly to parents have increased by 75 percent since the 2005-2006 academic year.
Unfortunately, what students and parents are getting in return for all of this money is not that great. I spent eight years of my life studying at U.S. colleges and universities. The institutions that I attended were supposed to be better than most. But most of the classes that I took were a total joke. A 6-year-old child could have passed most of them. Almost everyone agrees that the quality of college education in America is in a serious state of decline. The goal is to get these kids through the system and to keep collecting the big tuition checks. If only more parents realized what was really going on.
Young people in America are under intense financial pressure right now. Many are unable to make it at all and have moved back in with Mom and Dad.
As I wrote about recently, approximately 25 million American adults are living with their parents at this point. The system of higher education in the U.S. is badly broken and desperately needs to be fixed.Know someone interested? Please share