Student Debt Bubble Expands as Parents Do More of the Borrowing

13 July 2018

DOLLAR COLLAPSE — Not so long ago, student debt was mostly the responsibility of students. That is, you paid for college with loans and then paid off those loans with the proceeds of the good job you got with an advanced education.

These days it’s a little different. The cost of higher education is soaring, the jobs available to college grads don’t pay as much, relatively speaking, as they used to, and the size of loans available to students – though huge – don’t cover the full cost of many degrees.

One might expect these changes to lead more students to work for a few years and save up, or choose a cheaper degree, or eschew college altogether (as a lot of successful people now recommend) and substitute work experience for a diploma.

Some of that is happening but apparently the biggest change is that parents have stepped in to cover the difference between what their kids can borrow and the cost of a degree. As the chart below illustrates, until just a few years ago, the average debt of students exceeded that of students’ parents. But post-Great Recession, parents have given up trying to moderate the cost of their kids’ education and started doing the borrowing themselves. They’re now taking on the majority of new debts, and the gap is widening dramatically. […]

2 Comments on Student Debt Bubble Expands as Parents Do More of the Borrowing

  1. It will explode soon and then all the ivory tower types will be unemployed and digging ditches

  2. The dollar is worthless. The US has no funds to back any debt. Housing debt, credit cards, school debt and out of control taxes, but I gots me 500 tv channels…
    The country is done, dried up, washed up, a has been. Ppl still think they are free becuse of all the shitte they can buy at a store, they have a big truck and they have guns. They fail to see those are illusions. Mind numb brainwashed Americans, its sad.

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