August 17, 2019

Do you loan students the next bubble?

In the United States, the fears for the student loan bubble are becoming increasingly evident. The concerns derive not only from the size of the problem, well over twelve hundred billion dollars, but also from the fact that in addition to the students who obtained the loans, among which many may not be able to repay them, elderly people from 65 would be interested years up, or family members.

Huge mass of people who are in debt

Huge mass of people who are in debt

A huge mass of people who are in debt to send their children to university, finding themselves now in a situation of great uncertainty capable of feeding an explosive social situation.

The Fed’s bulletin, the central bank of the United States, issued last May 13, amply understands the extent of the problem: in the first three months of 2014, in fact, the honor loans to US students increased for a total figure that exceeds the 31 billion dollars. A figure that adds to the growth rate recorded by this particular type of financing during the last decade, an incredible 361% more compared to the 241 billion with which it had closed 2003.

A growth rate that has no precedent and that now scares analysts, in addition to the federal government, so much as to push Obama to foreshadow a possible partial amnesty of a part of this huge debt mass, dumping it on the community.

Student loans

Student loans

The fact that they were not used exclusively for the purposes for which they were intended, or the payment of university fees, also contributed to the abnormal growth of honor loans. Suffice it to say that according to the Wall Street Journal’s complaint, many people have practically enrolled at the university in order to obtain loans and have a source of income capable of supporting their consumption. Among them many unemployed people who have identified the best way to face the lack of work in student loans, perhaps waiting to find something.

With the labor market practically collapsed, characterized by absolutely groundless statistics on the basis of which the unemployed would be just ten million, when in reality there would be ninety million disheartened people who no longer even register for the placement, the probability that these people they are used, they are close to zero. Precisely for this reason the economic and political establishment is now questioning the possibility that the bubble could explode with the same roar as subprime mortgages.

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