After the housing bubble, the next financial crisis that will affect Americans for the next decades to come is the coming Student Loan, dare I say bubble? The main issue is that the cost of a college education has grown at an amazing rate, unlike the rate of growth for incomes which as a whole has a slow gradual rate of climb.
What does this mean? Impending doom? It means that if you want to protect your children, do not allow them to take on $140,000 of student debt to work in a field that pays $40,000 per year. Too many young people are on a path which will place them at a huge disadvantage before they even have a chance to get their feet wet as adults. Why do people go to an expensive private school and graduate with a degree in counseling, psychology or, philosophy? The only students who can afford to do that are people who come from a privileged background, have family businesses, and family money. This allows them to have options regardless of the particular degree obtained.
For the vast majority of the college graduates who will have to support themselves, now it is more important than ever to ensure that the high cost of an education will provide the skills that are highly sought after by the market. Protect your children! Do not allow them to have high amounts of debt just because everyone is doing it. Ensure that if they must take on student loan debt that it is reasonable given the expected income after graduating. Ensure that they know what to expect when they get out. What companies are hiring, what is the expected growth rate in that field, what they will be able to expect in terms of income and in terms of debt payments. Do everything you can to ensure that they are ready to thrive when they graduate and enter the workforce.