Forget it folks.

When you add all this together with the demographic problems we have, you've got the ingredients for a disaster -- a disaster we are going to encounter sooner rather than later.

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.

This is going to destroy retirements and those who currently own homes.  You're finished folks.

Here's the problem -- we have a demographics issue, as everyone who has paid attention knows.  That is, there are fewer young people compared to old, which leads to pressures on things like Medicare and Social Security.

But the traditional path is for older people to downsize their economic lives.  They sell their big house and buy a smaller one, or live in an apartment.

To sell it someone has to have money to buy it.  Who is that going to be?

It's not going to be the young adults now in college because we have screwed them by saddling them with this debt.  They thus cannot qualify for a loan to buy your house!

Further the "free money" brigade has driven up the cost of college at multiples of the increase in earnings power from professions over the last three decades.  This has made it less and less likely that college is a decent investment at all.

There's just no solution to this other than to force the "free money" crap out of the educational system.  All of it.  This means starting with restoring the ability of students to file bankruptcy and avoid the debt if they cannot pay along with removing all federal guarantees.

That would in turn force lenders to only hand out loans to people who are likely to pay them back.  In turn that would force the cost of college down precipitously, because there would no free money nor any lent money at all if the program did not have a verifiable and realistic capability to return sufficient income to pay back the loans.

As it stands now there is no penalty for colleges that lie about income ranges and likely outcomes for various professions.  They were lying when I was in school and they're still lying today. 

As for the so-called "economists" this is what they say:

Economists say college is an increasingly good investment because of the widening pay gap between jobs that require a degree and those that don't.

I respond that any economist that argues that a thing rising in price faster than the income that thing generates when you make the investiment is a "good investment" needs to be turned into pink slime and used for dogfood, and the school that handed out that person's degree needs to be boycotted and their graduate's resumes stuffed directly into the paper shredder when received by potential employers.

Leverage (look to the right and click to get a copy) spends considerable time on this issue because it is precisely our young adults who are intentionally left gullible in their high school education when it comes to the essential nature of exponential growth and the abusive debt practices of schools, including their local schools as part of the local government system, and that in turn leaves them to be the latest "marks" that are then targeted for abuse by colleges, banks and the government.

This abuse must end, but even if we ended it today the damage that has been loaded into the economy from these practices and which we will have to absorb, much of which will fall on the 50+ population, cannot be avoided.