The amount Americans owe on student loans is far higher than earlier estimates and could lead some consumers to postpone buying homes, potentially slowing the housing recovery, U.S. officials said Wednesday.
Total student debt outstanding appears to have surpassed $1 trillion late last year, said officials at the Consumer Financial Protection Bureau, a federal agency created in the wake of the financial crisis. That would be roughly 16% higher than an estimate earlier this year by the Federal Reserve Bank of New York.
That’s a horrifyingly large number for this reason: In 2011, consumer debt was $2.5 trillion. That means that roughly 40 percent of all consumer debt is student loan debt. Those obligations often have little to no collateral to back them up, are not used to purchase tangible goods (and so they do not make the economy stronger), and may hang around the borrower for years if not decades. It has become dangerous debt, especially as the job market has shrunk thanks to the actions of the current administration.
The Occupy movement that has taken over the streets of many of our cities are packed full of people who borrowed tens of thousands of dollars for degrees in subjects that can never earn them enough money to pay back the loans in a timely fashion. Our government has unleashed a small army of debt collectors on those students it irresponsibly encouraged to assume the debt with promises of a burgeoning job market and high pay.
Meanwhile, the administration continues to heap debt on our economy, which is already trembling under the load like an out of shape Atlas trying to hold up the world. Washington has matched irresponsible behavior with more irresponsible behavior and, right now, our college graduates, whose enthusiasm and youth ought to be powering a booming recovery are trying to figure out how to pay off the bills they assumed because a bunch of politicians in Washington told them they should.
What we are doing to our fellow Americans is unfair and cruel. We should be marching on Washington every day to demand that they give us a responsible government. We should demand, every day, that our politicians stop telling our children they must go to college and let parents and business leaders (who know the job market better than anyone) tell them where the good jobs really are (Hint: Not in puppetry) so they can make informed decisions about how they will begin their adult lives.
One trillion dollars of student loan debt is as unsustainable as sixteen trillion dollars of national debt. Our children and grandchildren will live meaner and poorer lives if we do not act like responsible adults. We can start now, by contacting our members of Congress and demanding they pass a real budget that has real spending cuts and pays down the debt. If they do not, we replace the Budget Bandits in November with citizen legislators who will. It’s time.