Delinquency rates on student loans made in the past two years stand at 15 percent in the U.S. as recent graduates struggle to find jobs, Fair Isaac Corp. (FICO) said.
“This situation is simply unsustainable and we’re already suffering the consequences,” Andrew Jennings, chief analytics officer of Fair Issac, said in the statement. “When wage growth is slow and jobs are not as plentiful as they once were, it is impossible for individuals to continue taking out ever-larger student loans without greatly increasing the risk of default.”
WE are suffering the consequences? How about all the young adults who have gotten screwed?
Look, there's no argument that education is good in the general sense. But all good things can become priced at a level that makes no economic sense, irrespective of how good they are.
That's the case for most college educations today.
Sure, there are exceptions left, particularly in certain STEM areas of study. But for many areas of study there is no cost:benefit ratio that works.
That is the problem, in short. You have to look at the total cost including the foregone income and advancement during the time you were in college, along with the cost of repayment if you take on debt. And once you do there is little if any argument for college education outside of certain STEM fields -- and those areas of benefit are narrowing rapidly.
There's only one way to stop this, and that's to shut off the "free money" machine. That will in turn force colleges to lower prices or go out of business -- and many of them will in fact go under, as they have spent ridiculous amounts of money on things that have little relevance to actual education.
Young adults are, in fact adults. If they choose to do foolish things they have the right to do so. But if you're the parent of one of these young adults you have an obligation not to aid an abet these institutions in their financial abuse of your offspring.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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