The Wall Street Journal reports:
The amount Americans owe on student loans is far higher than earlier estimates and could lead some consumers to postpone buying homes, potentially slowing the housing recovery, U.S. officials said Wednesday. Total student debt outstanding appears to have surpassed $1 trillion late last year, said officials at the Consumer Financial Protection Bureau, a federal agency created in the wake of the financial crisis.
That would be roughly 16% higher than an estimate earlier this year by the Federal Reserve Bank of New York. The new figure–released Wednesday at a banking conference in Austin, Texas–is a preliminary finding from a study of student debt that the bureau plans to release this summer. Bureau officials said the estimate is based on a survey of private lenders, as opposed to other estimates that rely on a sampling of consumer credit reports.
You can read more about this at The Next Bubble To Burst: Student Loans:
This is going to affect the economy dramatically in a few ways:
#1 – Students who come out of college with 100k in debt are going to spend their excess money paying off debt…not buying new products which will create jobs and fuel the economy.
#2 – The high cost of college is now a barrier to entry for students. This is going to prove to be a deterrent to students achieving higher education and receive the necessary skills for a 21st Century economy.
And don’t worry…if you want to go to college – Mitt Romney has a plan. Just join the military.
CNNMoney has some thoughts on student loans:
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