The Education Bubble

The Atlantic‘s Daniel Indiviglio highlights the enormous growth in student loan debt over the past twelve years.

Indiviglio comments:

This chart looks like a mistake, but it’s correct. Student loan debt has grown by 511% over this period. In the first quarter of 1999, just $90 billion in student loans were outstanding. As of the second quarter of 2011, that balance had ballooned to $550 billion.

The chart above is striking for another reason. See that blue line for all other debt but student loans? This wasn’t just any average period in history for household debt. This period included the inflation of a housing bubble so gigantic that it caused the financial sector to collapse and led to the worst recession since the Great Depression. But that other debt growth? It’s dwarfed by student loan growth

It should be apparent that this trend can’t continue — and won’t. ┬áThe only question is what will cause it to change.

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