Calamities are of two kinds: misfortune to ourselves, and good fortune to others. – Ambrose Bierce

Student debt is increasing at the rate of almost $3000.00 per second; this is stunning considering that education in our system does not even rank in the top 10 globally; we are ranked 18 out of 20.  Worse yet, it indicates that colleges are simply forcing young individuals to take on mind-boggling amounts of debt in the hopes of landing a good job when they graduate. Getting a student loan is about as easy as it was to get a loan during the booming housing market cycle and look how that story ended. All you had to do was be able to scratch an X on the signature line, and you would qualify for a loan that most had no hope of every paying back. Now colleges keeping increasing tuition rates while the Job market is far from rosy. College students are graduating today with an insane amount of debt on their hands. Wages as a whole have been dropping instead of rising over the past decade when inflation is factored into the equation.

Students are taking on too much debt, with almost no hope of being able to pay it back. The student loan portfolio is set almost to double by 2025 to almost $2.5 trillion by 2025. Already almost 12% of individuals are delinquent on their student loans, and given the far from bright job outlook most students face after graduating; this trend will only accelerate in the years to come. The chart below seems to confirm this assertion. The cost of four-year education versus median income shows that tuition rates are increasing at a far faster pace than median income. Since 2000, the cost of 4-year education has surged by almost 65%, yet median income keeps declining; this is an unsustainable trend and eventually it will lead to another disaster.

Is there a solution?

Well, one solution would be to make it harder to qualify for loans, which in turn would cut down the number of available students willing to pay exorbitant rates for substandard education. This, in turn, would force colleges to compete for students and as we know that competition is the best way to lower prices. However, this will not happen soon. We live in an era where money is thicker than blood; the can will be kicked further down the road until there is no road. When the road ends, though, the consequences could be extremely far reaching and will most likely make the subprime mortgage crisis look like a walk in the park.