[lbo-talk] education bubble

[Andy]

On Thu, Sep 9, 2010 at 11:47 AM, Wojtek S <wsoko52 at gmail.com> wrote:
> [WS:] An interesting comparison, indeed.  However, it begs the question: "if
> higher education bubble is much bigger than housing bubble, why has not it
> burst yet as the housing bubble has?  The default rate on student loans is
> going up, reaching 40% on the high end of the market
> http://chronicle.com/article/Many-More-Students-Are/66223/, so the bubble
> should have burst by now, no?  If 40% of home loans defaulted, it would be a
> national catastrophe on a far greater scale than the "great recession."

I was stunned to hear of default rates like this.  I wonder if part of
what goes into them is the fact that student loan debt probably
constitutes the bulk of the debt that younger people are allowed to
acquire, as opposed to mortgages and credit cards.  It's not hard to
just plain not be able to pay that, esp. if you don't graduate.  It
also doesn't get dismissed in bankruptcy, which probably works into it
somehow.

-- 
Andy