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Executive Summary – One of the next bubbles to break is the student loan bubble. University fees are now $20,000 to $40,000 plus living expenses. People seem willing to borrow to go to college. Now Americans owe $875 billion in student loans. College graduates under 25 have a 9% unemployment rate now. Job prospects are bleak for college educated people. Currently two million college degreed people are unemployed. There are over 300,000 people working as waiters or waitresses with college degrees. Roughly 25% of all retail salespeople have a college degree. There are 365,000 cashiers in the USA that have a college degree. There are 18,000 parking lot attendants with college degrees.
The Bubble – This bubble is almost one trillion dollars. The loans paid to students attending private for profit colleges in 2008 are expect to go into default at the rate of 46.3%, almost half. It takes about two years for one to be considered in default with student loans. Wait a few more months and watch the next batch of default figures which will be much higher.
Economic Rewards of College – It seems that the investment in a university education may not be as rewarding as it was in the past. With so many educated and experienced people out of work why should employers hire people straight out of college with no work experience. The colleges are in for some rough waters ahead.
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