Consider this report:
Student Loans Near $1 Trillion Hurt Young U.S. Buyers: Mortgages - Bloomberg.com
http://www.bloomberg.com/news/2012-02-16/student-loans-approaching-1-trillion-hurting-first-time-buyers-mortgages.html
Roshell Schenck has a Ph.D in pharmacy and earns $125,000 a year, yet can’t qualify for a mortgage for a house for herself and her 9-year-old daughter. The 2008 graduate of Lake Erie College of Osteopathic Medicine, in Erie, Pennsylvania, has more than $110,000 in student debt.
“I’d love to buy and can afford to buy,” said Schenck, 28. Since lenders place closer scrutiny on college loans than in prior years, she says, “it’s almost impossible for me to get a loan. My debt is crushing my chances of purchasing a home." ...
And this:
Student Loan Crisis Busts Retirement Savings - Sharon Epperson/CNBC
http://www.cnbc.com/id/46386779
Parents who borrow money to pay for their children's college education are exacerbating a growing student loan crisis. ...
Parents have an average of about $34,000 in student loans and that figure rises to $50,000, including interest, over a standard 10-year loan repayment period. Interest rates on the most common parental loan — the federal Parent "PLUS" loan — is fixed at almost 8 percent. So the return on parents' investments needs to average at least 8 percent just to break even. ...
This student and parent debt is even more onerous than mortgage foreclosure -- because no one can 'walk away'; no one can find relief in bankruptcy; no one can sue -- you can be impoverished until death if that is what it takes for the lenders to get back their money plus interest. Most folks don't understand this, the collectors can take your house, they can take your retirement, and, yes, they can even garnish your Social Security.
Also a problem is the current official government education policy obsession with encouraging every young person to go to college ---
college is not the right pathway for everyone!
With college tuitions continuing to rise out of control (proposed increase for the University of Colorado next year is 9 percent!), I am encouraging young folks that I know to look for alternatives to going to four year institutions ... waiting awhile, working, going to a much less expensive community college, looking for certificate programs, etc.
This student/parent loan debt is a time bomb waiting to go off ... if it isn't seriously dealt with pretty soon, it will kill any 'recovery' and it will further crush what is left of middle class America.
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