The Next Subprime Crisis Is Here: Over $120 Billion In Federal Student Loans In Default
And the biggest problem: unlike housing where there is always at least some recovery of collateral, as the house remains, with student debt there is no recoverable asset as the asset is a human being. Granted said human effectively becomes a debt slave courtesy of the non-discharge nature of the student loan, which can not be wiped out even with a personal bankruptcy, but assuming the taxpayer can recover any money using discounted garnished wage flows of what are effectively perpetual(ly discouraged) debt slaves of the system, is simply idiotic.
From my point of view, student loans enabled tuition and overall cost of college inflation, which lead, eventually, to our present situation.
Of course, all over again, we have to have the argument of the “evil bankers” and the government creating a “moral hazard” situation.
