Selling a Dream: Foreclosure Crisis as a Bellwether for the Education Debt Crisis
When financed through complex credit schemes that lack basic consumer protections, homeownership and higher education can quickly become debt shackles instead of the promised brass ring of financial security and middle class status. In today’s harsh economic and jobs climate, education debt that burdens millions of young Americans is often far in excess of their foreseeable earning capabilities. Often, the cost of borrowing to fund certain types of education is not commiserate with the realistic future earning power gained. The Department of Justice along with many states’ Attorneys General are probing for-profit education outfits that promise a valuable education but actually offer a paper degree for which there is often little or no demand in the real world.
When financial institutions lure millions of families to take on predatory debts to finance an over-valued home or an over-valued education the end result is the same, an asset that is worth far less than the debts incurred to obtain that asset. In the aftermath of the financial run-up of the housing market and the prolonged foreclosure crisis, homeownership is at it’s lowest rate in fifteen years. Today, there is an ongoing financial run-up of education. How will this end for families and students?
USNews.com published an article yesterday, Student Loan Debt Rises as Most Other Debt Falls, which points out that both the total debt load and the delinquency rate for education debt is rising at alarming rates. It offers some sage advice, If you’re considering borrowing to help pay for college, be sure to research your options and determine a smart amount to borrow, based on your financial situation, academic major, and career plans.
For a more on state attorneys general investigating for-profit colleges go to CaliforniaWatch.org here
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