Remember the housing bubble? If the student loan bubble pops, the fallout could be even worse.
It's no secret that American students are being crushed by student loans. We're on track to cross the $1 trillion mark in total student debt, exceeding household credit card debt, sometime later this year. That sounds pretty insane, but thanks to our colleagues at The Atlantic we can see just how far out of hand the situation has spiraled.
The magazine tapped data from the Federal Reserve Bank of New York and found that total student loan debt increased a whopping 511 percent between the first quarter of 1999 and the first quarter of 2011:
We all know how much havoc the housing bubble wreaked on our economy, but it turns out the growth of student loan debt was twice as steep as the growth of mortgages and revolving home equity from 1999 to the peak of the housing bubble in 2008. One thing is for sure: if mass numbers of students start defaulting, or if they stop spending on other things because their money is going to paying off loans, a day of reckoning is surely coming. The only question is when?
graph via The Atlantic