If you thought the housing debt bubble bursting was bad, this one will be worse. Unless a housing mortgage, there isn't any collateral if someone defaults on a student loan. You can repossess an education. The government will have to foot the bill, all of it, particularly since the Federal Government now guarantees those loans. This won't end well.
Giving validation to Occupy Wall Street protests over the increasing burdens of student debt, a new report indicates that the total amount of outstanding student loans this year will exceed $1 trillion for the first time.
In addition, the amount of student loans taken out last year was greater than $100 billion, another new record, according to USA Today, citing the Federal Reserve Bank of New York.
The $1 trillion of outstanding loans means that Americans now owe more on student loans than on their credit cards. While students have been racking up educational loans, American consumers have been paying down credit cards and home loans.