The Student Loan Bubble is Starting To Burst

Re:The Student Loan Bubble is Starting To Burst by muzz on Monday September 09, 2013 @06:32PM (#6356734)

I agree that that is exactly the gamble that a student is taking, that when finished there will be earning ability that will enable them to pay off the loans.

Is this a reasonable bet to make? What is the earning potential of someone with a college degree? Isn't it something like a $1M+ increase over one's lifetime?

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Re:The Student Loan Bubble is Starting To Burst by bfigares on Monday September 09, 2013 @06:53PM (#6356835)

The problem is that your debt, if measured at the end of your lifetime, will also balloon WAY out of control. Simple example, 30 years after college, 40k usd in debt gets you to 462k at 8.5% annual. That is, assuming you get a job immediately that truly translates in higher earnings, which a lot of times isn't true.

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Re:The Student Loan Bubble is Starting To Burst by muzz on Monday September 09, 2013 @07:23PM (#6356979)

Well yes you have to pay it back before the end of your lifetime.

WSJ had article on student debt recently, with lots of data. Median debt load was 18-19k USD [1]

If it were all via Federal Stafford loan, the interest rate would be 3.9%. If the payback period was 10 years, the monthly payment would be a whopping $191 per month.

[1] http://online.wsj.com/article/SB1000142412788732443200457830...

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