Student loans are quickly becoming the next big bubble that could pop sometime in the future – especially when even the richer members of our country are starting to squeal “uncle” when they realize just how much debt they’ve accrued.
Recently released federal data shows that families earning around $94,535 to $205,335 a year saw a huge jump in student loan debt from 2007 to 2010. 25.6% of individuals falling in this group owed debt in ’10, which is a 6.1% increase from ’07 levels.1
What hurts even more is that these folks in the upper-middle class range owe on average about $32,869 once they graduate. That used to be $26,639 in 2007 – even when adjusted for inflation. Go back even further and the difference becomes even more remarkable: there were more than three million families in America that owe more than $50,000 in student loan debt in 2010 compared to just 794,000 at the turn of the millennium.
It is plain to see that not even the wealthier members of America – the most prosperous of the middle classes – are immune to the financial woes afflicting all of us.
Not only is there less money to spend ever since the recession wiped out jobs and investments, but colleges have become stingier with financial aid while raising their own prices at the same time.
What used to be a right has quickly become a privilege with some very heavy strings attached, and it couldn’t come at a worse time.
Post-recession America is still reeling from the financial carnage of 2008 with no visible solution in sight, and the two main political parties are too busy playing politics for this year’s presidential elections to put any solid policies in place.
Let’s just hope that the student debt thing doesn’t turn into a bubble that pops and sends America back into a second recession.