Tuesday, November 8, 2011

Student Loans: The Next Economic Bubble

When demand outstrips supply, prices drop.

When inflated demand outstrips credit, then an economic bubble bursts.

The cost of post-secondary education is increasing dramatically, outstripping inflation. Students are drawing on the government for more loans, though the investment of a college degree is diminishing considerably.

When the cost of a college education hits such a level that individual investors can no longer draw out a significant loan, the bottom will fall out of this inflated market, and colleges, now burdened with debt, will start closing, and possibly defaulting on their debt.

What has fueled this crisis? Easy money, easy credit, easy education, none of which is preparing our young people for the future. Big Government subsidizing Higher Education is gearing up to force on this country a Lower Standard of living.

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