The Great Debate: Is There A Student Loan Bubble?

Here’s a great way to develop your student’s critical thinking skills and teach them about the student loan issue in the process.  Google “student loan bubble” and you get over 700,000 results.  With so many news outlets reporting on it, why not have students read and interpret articles, charts, data and videos to develop their own opinion.

Here are a few resources to get them started but it would also be great to have them build their media literacy skills by finding high quality videos, articles, charts to support their arguments.

There is not a student loan bubble:

  • U.S. student debt burden falling more on top earners, easing bubble fears (Reuters):

Young Americans with big college debts are often portrayed as struggling to pay their bills. The reality is somewhat different – those owing super-sized student loans tend to be higher paid.  A Reuters analysis of Federal Reserve data shows that over the past two decades the young with higher incomes have gone from owing less of the debt than the average household to owing considerably more.

  • Viewpoint:  Stop calling student loans a bubble (Time):

But for frothophobes, the most dangerous bubble going today is in higher education. Don’t believe me? A quick Google search will reveal hundreds of storiesforetelling of a crisis when the student loan bubble finally bursts.  But let’s get a grip. When you take a closer look at higher education, you realize that while we do indeed have some problems to address, a bubble situation it is not.

There is a Student Loan Bubble 

  • Article:  Obama’s education focus overlooks next financial contagion (CNBC):

“With the $1.2 trillion student loan crisis accelerating, President Barack Obama gave a nod in his State of the Union speech to the millions of young Americans starting their adult lives in crushing debt but offered no new proposals for relief.”

  • Video:  Bursting of Student Loan Bubble Inevitable (Fox News)
  • Video:  Could Student Loans Be the Next Bubble (Bloomberg): Provides charts on student loan growth and delinquencies (2 minutes)