The student loan market has been heavily inflated over the past few years, and now many students are choosing not to pay back their student loans. Is it only a matter of time before the student loan bubble pops? Many people seem to think so.
Why do so many industry analysts think that the student loan bubble is ready to pop? There are several reasons why many industry analysts think this is going to happen. The first reason is the fact that there are now more student loans in default then there were just a few years ago. Mix that in with the fact that tuition expenses are expected to rise over 8% this year, and the fact that most students from the year 2010 now owe more than $25,000 in student loan debt, and you have a recipe for disaster.
Some people are even encouraging smart minded entrepreneurs to avoid college altogether. Peter Thiel, the founder of PayPal, recently awarded two dozen entrepreneurs with $100,000 so that they could avoid attending college altogether.
Student loans are very different than other loans. It is easy for a person to walk away from a mortgage or auto loan, but it is not so easy to walk away from a student loan. Many consumers are filing bankruptcy to help clear their credit of their past debt. Filing bankruptcy does not remove student loans from their credit history.
Mark, a representative for http://www.personal-
“Student loans are not always necessary in order to attend college. We have been noticing a record amount of people applying for personal loans. Personal loans can be used for anything. Many students are choosing this route over the more traditional student loans. Personal loans can help them pay for tuition, books, school supplies and a roof over their head while they are attending college. This is not always the case with the traditional student loan.
Our website was designed to make it easier for consumers to find personal loans. Personal loans are being approved in record numbers for people with good credit, no credit and bad credit.”
Personal loans may be a better choice for students, but that does not stop the current student loan bubble from inflating until it bursts.
The total amount of money in delinquent student loans is quickly rising. It is now higher than outstanding credit card bills. Credit card debt is declining, but student loan debt is on the rise. It is estimated that the current total of student loan debt exceeds 750 billion dollars.