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Student Loans: The Next Credit Bubble


Due to the whittling away of consumer protections over the past 40 years, student loans remain a large part of our national debt bubble that does not have an immediate release valve.  According to, outstanding student loan debt currently stands at $829 billion nationally.  Most of the time student loans cannot be discharged in bankruptcy and student loan lenders are not subject to the rules other lenders have to play by.

Everyone loves a good graphic depiction, including me, and this one is excellent.  Some of the history provided in the link explains how we arrived at a point in American history where the cost of a basic college education is unaffordable to most working and middle class families without the undertaking of substantial debt.  The really absurd thing with this system of saddling our younger generation with a lifetime of debt is that the availability of jobs that would make such debt worthwhile has also been dwindling.

Here are disturbing bits of trivia.  Student loans are not subject to:

  • Statutes of Limitations on Collections
  • The Truth in Lending Act (TILA)
  • The Fair Debt Collections Practices Act (FDCPA) or
  • State Usury Laws.

Best quote from “Student-loan debt collectors have power that would make a mobster envious.”  — Elizabeth Warren

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Hamid Jabbar

Hamid Jabbar

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