There’s another fiscal crisis that you might not be as aware of in comparison to the Fiscal Cliff, and another likely debt ceiling showdown on the way; the student loan debt bubble. According to MarketWatch, total student debt outstanding surpassed $1 trillion for the first time last year, and new data released today shows that 11 percent of student loans were 90 days or more past due in the third quarter. That’s a 8.9 percent climb from the previous quarter according to the Federal Reserve Bank of New York.
Student loan debt has surpassed nearly all other consumer debts in this country, and much of that largely government subsidized debt will almost certainly end in default. Keeping in mind what many experts believe, in that the housing bubble led to massive defaults, subsequent bailouts and spending, and the 2008 fiscal crisis; should eyes now be on the student debt bubble with the same focus as the Fiscal Cliff?
On “Real News” Friday the panel opened the show looking at the student loan debt bubble and its place in very recent historical context. Are we going to end up right back where we are now because of this growing source of debt, or can we avoid another 2008 crisis? Watch a clip below: