Intriguing doesn’t begin to cover it. Twice in two days we’ve seen the campaign topic du jour–student loan debt–tied to the housing crisis. But in two very different ways.
The New York Times ran part one in their series “Degrees of Debt” that detailed how an entire generation is losing out on life, marriage, children, etc. because of the cost of college and the debt they’ve assumed. This quote from the article caught our eye:
“If one is not thinking about where this is headed over the next two or three years, you are just completely missing the warning signs,” said Rajeev V. Date, deputy director of the Consumer Financial Protection Bureau, the federal watchdog created after the financial crisis.
Mr. Date likened excessive student borrowing to risky mortgages. And as with the housing bubble before the economic collapse, the extraordinary growth in student loans has caught many by surprise. But its roots are in fact deep, and the cast of contributing characters — including college marketing officers, state lawmakers wielding a budget ax and wide-eyed students and families — has been enabled by a basic economic dynamic: an insatiable demand for a college education, at almost any price, and plenty of easy-to-secure loans, primarily from the federal government.
Then, here comes the reference again, but in a different context. American Public Media’s “Marketplace” cites the trend before the housing crisis for low-and middle-income families to use their home equity for (wait for it…) college education costs for their children. But they chose, with this extra money, to send their children to more expense, selective schools than they otherwise would have.
We here at MortgageKeeper can’t help but wonder…is it possible that some families were ensnared by both crises–first using housing equity that’s now gone to fund college, and then finding college too expensive, and assuming out of sight loans to pay for the rest?