Is student loan debt a bubble? What would happen if that thing pops?

Is student loan debt a bubble? What would happen if that thing pops?

The government would bail out the banks again and the white working class would pay for it.

Well I dont think its a bubble in the traditional sense in that there is not as much contagious risk

While students technically cannot declare bankruptcy from student debt, if there was a mass default there likely would be a bailout and restructuring of future student loans

It's basically a welfare program at this point. Default rates have been growing since the start of the college bubble and when the next downturn happens it will skyrocket.

Hopefully Donald Trump scraps the whole system and forces prospective students to appeal to private lenders. This would put massive pressure on universities to cut costs and in a decade or so university would be affordable again.

The reply to this thread that precedes all others is also the foremost in quality.

Isn't it actually better to get your loan from a private lender as you can't declare bankruptcy from a student loan?

not sure but at least if you get your loan through a private lender you need to actually appeal to them

the government hands out loans like candy, if you have to appeal to someone you can't get in through affirmative action or go for meme degrees

best way to prevent student loan debt is to pay up front

Literally only rich people would be able to afford college then. There would be no middle class. And no user, you would not be on the rich side.

So what happens when the loan pops? Are the loans forgiven? Do they stop handing them out?

You're assuming the price will stay the same. If the demand drops enormously like you say it will, then the prices for tuition will come right down so it will be more affordable. The reason why it is so expensive now is because anyone can get easy government-secured credit to pay the tuition.

wall of counter debt and ameristan is gonna pay for it

A lot of the loans will never be repaid. And yeah in that case they will have to stop giving them out. Or go full socialist and make it fully government funded.

>forgiven

Not on your life goy boy

If it pops Occupy 2.0 but with professors instead of students.

It is.

Once the government guarantees funding for something, the costs will always rise (like Shkreli jacking up drug costs).

Because the state guarantees loans, universities will forever increase their fees and grow their executive staff to monsterous size. Look at any typical (non ivy league) uni and what you see is dozens of vice-provosts and other execs all making way over $300k/year, with the dean usually clearing $400-1 million per year. They all live in paid for housing as well, and expense everything to the university which in turn gets funding for this by jacking up tuition.

Eventually the student will no longer want to take out a massive government loan and will start going to polytech schools and apprentice instead like all those 'coding bootcamp' startups that are just paid apprenticeships.

Then the bubble pops as universities can no longer afford all this heavy salary baggage, and hundreds of them will close down. It will go back to just being Ivy League schools where the best of the best go (who make billions in research grant money and patents) and polytech schools like it was 30+ years ago.

Interest rate are typically much higher through private lenders than getting government financial aid.

t. American student in UK

more taxation

Not only that but they are compounded

An economic bubble happens when the price of an asset increases quickly due to speculative demand, which means that people are buying it and willing to pay higher and higher prices (and even go into debt to finance it) because they see the price rising and expect to profit from further increases. At some point, the price is obviously unrealistic, lots of people know it and are waiting for the right time to sell. At that point, any decrease in price can trigger an avalanche of panic selling that drives down the price further, the same mechanism that drove it up, but in reverse and quicker.

Student loans are not a bubble, because you cannot sell a degree you have, or profit from it becoming more expensive. There are some superficial similarities which cause people to use the wrong terminology:

There are some factors (competition for prestigious schools, easy to obtain loans) which have pushed tuition at some institutions unreasonably high.
Many people are going into debt to finance it, and some of them won't profit from it the way they expected and be unable to pay back the debt.

But that doesn't make it a bubble - you can still get a degree for a reasonable price, just not at a prestigious private university with lavish dorms and gyms. Many people still manage to leverage prestigious degrees into high paying jobs that make the degree "worth it".

It won't burst catastrophically. More people will realize that playing the "get into deep debt for a degree in the hope it can guarantee a sufficiently high paying job" game is too risky to bet your life on it, and will scale down their ambitions. Some schools will have to reduce tuition and cut costs to stay competitive. And the government will probably rethink the conditions for student loans and find a way for people who have no hope of ever paying them back to get out of them, because having people in perpetual unsurmountable debt is an overall loss for society (that's why bankruptcy exists in the first place).

Yes because you can discharge those private loans if you need to.

You can't get declare bankruptcy on gov student loans. The whole "after 7 years, you are eligible" isn't correct either it's wholly in the governments choice to discharge your loans and generally they never do unless you have some medical condition preventing you from paying them.

Sure there is 20% of grads who jump into the $100k/year tech industry but the rest will only make $50k/year if that for about 10 years meaning they will take forever to pay off that debt.

Meanwhile what people don't know is that Ivy League schools are generally free, they give grants to 90% of students and almost nobody graduates with any debt. Over at any state school, you walk out with $80k-150k in debt

>Education at a University/College
>implying that makes you smarter

Spoiler: I doesn't. Have you seen modern colleges and universities?

Paying thousands of shekels to the education jew for a non degree.

b - b i'm smart and shit!

While I agree the content is shit, the human brain doesn't stop developing at age 18. The brain needs to be mentally stimulated to keep developing up until at least age 25. I have friends that didn't go to college at all and they have act like high school kids still.

>Meanwhile what people don't know is that Ivy League schools are generally free, they give grants to 90% of students and almost nobody graduates with any debt. Over at any state school, you walk out with $80k-150k in debt
Citations needed. That's not true at all. Schools like Yale and Harvard, IIRC, have a sliding scale tuition where they will never take more than 10% of your family's income, but no other Ivy does that. Look at schools like Columbia, Princeton, and Cornell. Expensive as fuck.

Actually Princeton is the only other one apart from Harvard and Yale that does the sliding scale. All other Ivy unis do not.

This. Right now they can't get away from student debt, but forgiveness of debt negotiations or a law change could easily alter that.

Meanwhile i'm earning £30k a year in my first job and you're sitting at mummy's house masturbating to anime

Yeah but they only accept applicants straight out of highschool. No transfer applicants. Many poor people do shit in highschool, especially if they have to live around their shitty families.

> FREE College
> EVERYONE MUST GO TO COLLEGE
> education is the only way for a debt-fiat economy to grow

there are 20 million kids in college in the US.
college is a narrative pushed by Globalists to REMOVE LABOR from the market.
if those 20 million were instead in the Real World looking for jobs, the whole goddamn economy would implode.

unemployment would go up by double digits.
wages would plunge even more.

college is a racket to juke the labor stats to hide 10% of the work force off the books to enable the Federal Reserve and WallSt to continue plundering the Treasury and robbing the pension funds.
the debt students carry is only an ancillary xmas bonus for Goldman Sachs psychopaths.

that is why the student debt bubble can never ever pop.

>30k

I hear Starbucks has good benefits

Yes 30k in dollars wouldn't be worth much but in a decent currency that's good

Fuck big education, we shouldn't bail them out. They can adjust their fucking prices by stop paying exhorborant salaries and funding sports teams.

It's near impossible to find a decent job if you don't have a degree. Unless you have connections or just good luck. Most people without a degree are getting fucked hard.

I applied for a job as Junior Android Dev and they called me for an interview. I know JavaScript, Android, XML, etc etc. But since I hadn't done NodeJS before they didn't want to hire me - for a fucking Junior Dev position. The point is companies don't want to train nowadays, they want the perfect candidate with 5 years experience with this perfect combination of experience for even just entry level hire. For as much and knowledge that they want an entry level candidate to have I might as well start my own company. It's absurd.

The bubble is over a trillion dollars

This country's economy is going to crash hard. It's a fire sale here.

I've seen people saying it will be worse than the great depression. Hell, some have said it could be the worst economic collapse in history.

I'm actually pretty nervous. I've been wondering if I should leave the US and find somewhere safer. How bad could it really get?