Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Weekly Wrap-Up: Gold and Silver Gain Over 1% and 2% on the Week
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 11 17 2017
By: Ira Epstein

Next-Generation Crazy: The Fed Plans For The Coming Recession
By: John Rubino

COT Gold, Silver and US Dollar Index Report - November 17, 2017
By: GoldSeek.com

Gold Miners’ Q3’17 Fundamentals
By: Adam Hamilton, CPA

Bonfire of the Absurdities
By: John Mauldin

The Social Security Inflation Lag Calendar - Partial Indexing Part 1
By: Daniel R. Amerman, CFA

Rob From The Middle Class Economics
By: Gary Christenson

GoldSeek Radio Nugget: John Williams and Chris Waltzek
By: radio.GoldSeek.com

The Metals Market Is A Mess And Will Likely Continue To Frustrate You
By: Avi Gilburt

 
Search

GoldSeek Web

 
Newly Released SchiffGold White Paper: The Student Loan Bubble


 -- Published: Thursday, 3 September 2015 | Print  | Disqus 

By Addison Quale

“You need a college degree to succeed in America.” This idea has become so commonplace that the right to higher education is now a core issue in most political platforms. What if a young person cannot afford a college degree? The “obvious” answer from politicians on both sides of the aisle is that the government should subsidize them. Very few are brave enough to ask the far more important question: “At what cost?”

The answer is simple: as of today, the cost is $1.2 trillion. That is the current level of student loan debt in the United States, which represents the second largest category of consumer debt after home mortgages. It has grown by leaps and bounds since the financial crisis of 2008 and now surpasses even car loans and credit card debt.

 



The American Dream used to be simple: the ability to shape one’s own destiny and wealth without interference from the king, the government, or other powerful interests – the right to “life, liberty, and property.” Over generations, this dream has been coopted by politicians and bankers to gather votes and riches. In the 20th century, the idea of owning a home became an integral part of the Dream, which led to the disastrous idea that even unqualified borrowers deserve the opportunity to buy a house. We are all familiar with the fallout – the subprime mortgage crisis and ultimately the Great Recession.

Today, ten years later, politicians are now claiming that a college education is part of the American Dream and also a right of all Americans – regardless of their credit rating and SAT scores. Spurred on by even lower interest rates and the implicit promise that John Q. Taxpayer will once again come to the rescue should anyone happen to default, we now have a growing student loan bubble on our hands.

Since 2003, student loan debt has more than quadrupled – rising from $250 billion to well over $1 trillion. It has increased over $500 billion (a 75% increase) since the beginning of President Obama’s first term, when it sat at $660 billion. Furthermore, at the end of 2008, the default rate was 7.9%, but now stands at 11.3% – a huge increase that is most assuredly an underestimation.

Perhaps the most alarming element of this trend is that there is no collateral required for a student loan. Banks can foreclose and repossess the house when a borrower defaults on a home loan. However, what can a bank repossess in the case of a student loan? A diploma? Knowledge? The bottom line is that each dollar of a defaulted student loan will pack much more of an economic punch.

And don’t assume for a minute that the students themselves will escape unscathed. Student debt cannot be expunged through bankruptcy. The federal government can garnish up to 15% of gross income for 25 years from defaulters.

Some might say, “What’s the big deal? America has already been dealing with massive amounts of debt. Is this really going to make that much of a difference?” The big deal is that the student loan bubble adds significantly to the nation’s large debt burden, which at 102% of GDP is clearly unsustainable and doomed to inevitably lead to an economic collapse.

What’s more, the current figure of $1.2 trillion is just today’s student debt load. This is expected to nearly triple in the next ten years.

Every investor needs to understand how the student debt bubble will impact the US markets. In a newly released white paper, SchiffGold explains how best to prepare for a financial collapse that will dwarf the 2008 financial crisis. Download this exclusive SchiffGold White Paper for free today: The Student Loan Bubble: Gambling with America’s Future.


Addison Quale is a Precious Metals Specialist with SchiffGold. He studied economics at Harvard University and earned a Master of Divinity at Gordon-Conwell Theological Seminary. Addison brings a well-rounded perspective to precious metals investing, with work experience at an investment consulting firm in Boston.
| Digg This Article
 -- Published: Thursday, 3 September 2015 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.