[QUOTE=ThisUsernameIsForbidden;17122933There is a long-term bubble emerging in student loans.
http://www.newyorkfed.org/studentloandebt/[/QUOTE]
That’s not a bubble, noone is bidding up the value of student loans and now that the federal government is holding the paper, its not being traded around, securitized and leveraged the way mortgages were. What you are seeing is more people going to college and incurring more student loans. We should do something about the cost of higher education and making sure that people incur these debts with their eyes wide open but I don’t see a bubble. All the federal debt is held by the federal government from here on out.
We might see an increase in default rates but we’ve seen those before.
That’s not true. Unlike the UK, law school is a graduate degree and the humanities are common undergraduate degrees for people planning to go to law school. You also have those semi-liberal arts degrees like economics which can lead to really decent jobs.
You realize that noone is discouraging STEM studies, right? I have not heard a single politician, conservative or otherwise telling people not to take out loans to get an engineering degree. The “why not go to trade school” is usually paired with criticism of too many people going into areas of study that have very poor job prospects. The point is to INCREASE economic mobility by encouraging people not to saddle themselves with debt to study something that isn’t going to help them pay off that debt.
As long as law degrees are not undergraduate degrees, we will maintain a reasonably large population of folks who will feel like they can major in the humanities with an eye towards law school.