Student Loan Debt Reaches $1 Trillion
by Brian Koenig
and free-market economists claim that the idea that every high school
graduate is entitled to a government-subsidized loan to attend a
$30,000-a-year university is fiscally maniacal. But unfortunately,
its also a fiscal reality that has propelled college graduates
into financial Armageddon.
student-debt outstanding exceeded
$1 trillion last year according to new estimates released
by the Consumer Financial Protection Bureau (CFPB) potentially
leading to further delays in home-buying and, in turn, an extended
impasse on the housing recovery. CFPB student loan ombudsman Rohit
Chopra, for instance, asserts that "first-time home-buyers
are a substantial part of the housing market," and "instead
of saving for a down payment, these borrowers are sending big payments
attorneys are observing
firsthand the calamitous rise in student loan debt, as a recent
survey conducted by the National Association of Consumer Bankruptcy
Attorneys found that 81 percent of bankruptcy lawyers disclosed
that the number of prospective clients holding such debt has inflated
"significantly" or "somewhat" in the last three
to four years.
debt debacle, which some experts are labeling the "next
debt bomb," involves a coterie of malefactors. On the surface,
the culprits entail a stale economy, rising interest rates, and
persistently high unemployment. Moreover, CFPB officials contend
that such debt is rising because young Americans are returning to
college simply to avoid the anemic labor market. These seem to be
the logical and more politically safe explanations.
what Washingtons entitlement-touting bureaucrats attest, thats
not the end of the story. It encompasses a much more complex plotline.
government deserves much of the blame, as its intervention in the
higher-education market has spawned a seemingly irreversible distortion
that has led to increased tuition costs, and consequently, a monumental
rise in student loan debt.
and Occupy Wall Street protesters neglect to realize that their
entitlement-based ideology which affirms that "every
American is entitled to a Harvard degree" is the transgressor.
the third-party-payer system that is now rattling the fiscal status
of American healthcare, the federal government has bolstered its
authority in subsidizing tuition costs, as students accumulate bulky
government loans to finance their education. This reformed system
distorts the high school graduates motive to pursue the most
competitively-priced schools, prompting many students to select
institutions charging $40,000 a year for tuition.
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© 2012 The New American