Fox Business
Expand
Browse All Video
Watch Live

You're watching...

Student Debt Growing at $3,000 Per Second

Details

  • Description

    Mark Kantrowitz of Finaid.org weighs in on rising student loan debt.

  • Duration 3:00
  • Date

Clips

Also in this playlist...

Latest Video

Auto-advance: ON

Auto-advance
View All

Transcript

This transcript is automatically generated

And for sure I'm sharp left turn here at this is market story for you.

Student loan debt has surpassed one trillion dollars this year my next guest says is growing at a rate of 3000.

Dollars per second joining me.

-- student loan bubble as many are calling it now is mark -- -- its founder of the online guide to financial late in eight.

Dot org and we're supposed to have you -- -- so how is it possible that student loan debt is growing so fast -- -- 3000 dollars per second Clinton.

-- -- student loan debt is repaid over decades.

Whereas credit card debt is repaid over months -- years so it's natural that we would have thought.

More new student loans originated each -- them progress in paying back the old student loan.

So that's that's an important comparison thank you so -- more analysts are referring to this trillion dollars in student loan debt as a bubble.

Do you agree with that and what do you think the catalyst will be ultimately burst it.

Well I -- I don't think that there's really a bubble.

Pain in the a bubbles burst when there is a withdrawal of the loans.

93% of new education loans are made by the federal government.

And if the federal government runs out of money to make new loans we have much bigger problems send any kind of a student loan bubble.

In a situation where so many mortgages went belly up you know the bank just foreclose on the home and took the home right well.

When students default on their -- -- you know what -- the bank take and this is a significant problem for the banks.

While that they can't repossess your education.

Federal government has very strong powers to compel repayment they can.

Garnish your wages up to 15% they can take your income tax refunds they can even take state lottery winnings.

Do you think that -- is a viable solution to let.

These loans be forgiven in bankruptcy.

I think that there's a benefit of allowing bankruptcy discharged it's not just that.

The students.

Who borrowed too much or glad unfortunate circumstances.

Would have they -- out -- way to get a clean slate.

It also would mean that the lenders would be more accommodating.

Of borrowers who have financial distress and more willing to offer them some sort of compromise.

And on be on education side do you think that the universities.

In those institutions.

Should be.

Stiffer with raising -- and how hot what's the best thing for the space -- not raising -- so -- expecting that enabling the loan problem right.

Can they put while -- on tuition to help.

-- -- -- -- -- The growth in -- is correlates with the failure grants to keep pace with increases in college costs.

So -- one states cut their appropriations to public colleges the public colleges have no choice but to raise tuition.

So a lot of it is beyond the control of the institutions.

But certainly -- more needs to be done to ensure the cause remains affordable.

All right we'll have to leave it there a lot of fact questions left to be answered there on that topic -- -- -- they.

Load More