Student Loan Crisis Worsens, Top 1% of Borrowers Owe More Than $150K
Student loans are kind of a hidden aspect of economic strife, because while a new car or home when income is dissonant is pretty obvious, you can never tell if someone you know paid a ton of money for college only to wind up working at the Steak n’ Shake when they graduated into a weak job market.
It’s also a bit terrifying that the way we used to talk about the housing bubble- you know, before the economy imploded in a ball of flames and stayed that way forever- is now the insistent and increasingly dire style of prediction emerging about the future of student loans and the economy. Recent reports have indicated that unpaid student loans have passed the one trillion dollar mark, and lawmakers are currently trying to find ways to head off a supposed coming crisis at the pass with measures such as the Student Loan Forgiveness Act proposed to deal with the problem.
One way to underscore how bad the situation may be, though, is inherent in a simple datapoint that The Atlantic highlighted earlier this month. While most people with outstanding student loans owe between $10,000 and $15,000- not a small amount in and of itself- 1% of borrowers owe a staggering $150,000 on their student loans.
The site quoted one unnamed borrower in the unenviable 1% of most indebted student loan debtors. The anonymous former student says they had no idea what they were signing up for when they took on the debt:
“I did not fully understand the extent of what I was getting myself into… All I knew was in order to pay tuition, I would need to take out private and federal loans. I was also repeatedly told by several people that I would easily be able to pay off the amount, even though it seemed pretty steep. When I graduated and fully did the math, I knew I was in trouble.”
Of course, we can certainly amend the way things work so that student loans are more difficult to get, but it appears that without some action from lawmakers, the student loan debt bubble could seriously derail the scant economic progress we’ve made since the last major bubble.