What you should know about the student loan bubble

Once again, the United States of America has found itself in the midst of a financial bubble. Many years ago, a lot of people had been speculating on the status of the country’s healthcare system. And now, people are talking about the cost of getting a higher education, which, of course, involves student loans.

Continuous increase on college tuition fees

gfsagsaghasasIn order for you to understand it better, let’s take a look at the main source of the problem. Every year, you may have noticed that college tuition fees are getting higher and higher. As a result, the number of parents and students who can’t afford the expenses of going to college is rapidly increasing. So, what do they do? They apply for student loans. And take note, a borrower can actually take out multiple student loans if one is not sufficient to finance the total cost of going to college. But what happens if the borrower is unable to pay off his or her loans? It’s the government that picks up the tab.

Student loans guaranteed by the government

Not all people are aware that financial aid, particularly student loan, are guaranteed by the government. This is why it takes charge once a borrower can no longer repay his debt. Well, it is really the taxpayers who suffer from this mess. This is probably one of the reasons most colleges and universities don’t have the qualms of raising tuition fees because no matter what, they would still get their coin.

Yes, as a taxpayer, it is really outraging to think about the student loan crisis. But, don’t you know that you can actually profit from the United States student loan bubble? That’s right. In fact, a lot of people are doing this nowadays.

Make money from the student loan bubble

ghsaghsahgashasAt present, the outstanding student loan balance in the United States is about 1.2 trillion dollars, 14% of this is in default and it is expected to get even worse. But then, this percentage is still not enough to sink the US government. After all, students who have successfully graduated from college are more employable than those who have not. Even if the number of defaults will rise, the good news is, the average of student loans is only $29, 000. For some people, this would look like it is too high, but when talking about macro scale, it is really not. It is not even close to another mortgage crisis.