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Student Loans: America's Next Debt Bomb

I understated things earlier when I wrote that the student loan bubble "may" explode in taxpayers' faces, as law professor Glenn Reynolds pointed out. An explosion seems increasingly likely. The Washington Post recently concluded that student loans could be America's next "debt bomb”: "Bankruptcy lawyers have a frightening message for America: They’re seeing the telltale signs of a student loan debt bubble," notes the Post. "Bankruptcy lawyers have seen a substantial increase in the number of clients seeking relief from student loans in recent years."   Many of the "parents or guardians who co-signed the student loans face the prospect of losing their life savings, cars or homes to collection agencies." In recent years, student loan debt has skyrocketed from $100 billion to $867 billion, "surpassing the $704 billion in outstanding credit card debt," says UPI. There has been a massive "spike in" student loan debt owed to the Education Department over the "last three years." Will these skyrocketing financial burdens lead to a clamor for massive bailouts at taxpayer expense?  (A growing and substantial fraction of graduates are failing to repay their student loans).

This massive student loan debt is not buying much of an education for many students. At Minding the Campus, Mary Grabar discusses the slanted, error-filled writings used to teach English majors in America's politically correct universities, where ignorance of history is apparently a selling point. Texts for English students celebrate Obama's speeches, like his Cairo speech that contained multiple historical errors, and treat them as if they were on par with the Gettysburg Address and Martin Luther King's "I Have A Dream" speech. As Grabar notes, in the English texts that venerate Obama's speeches, "Obama's historical inaccuracies in" his Cairo "speech go unchallenged,” like falsely "attributing the invention of printing to Muslims (it was the Chinese) or crediting Morocco with being the first to recognize the United States (No--Russia, France, Spain and the Netherlands did it earlier)." As Grabar points out, "Obama's claims in his Cairo speech are presented without any skepticism" by English textbook writers, despite the factual errors, and the fact that even the liberal Huffington Post noted the speech's "lack of substance."

As USA Today noted earlier, college students learn less and less with each passing year, according to recently-released research. “Thirty-six percent” of college students learned little in four years of college, and students now spend “50% less time studying compared with students a few decades ago, the research shows.” Thirty-two percent never take “a course in a typical semester where they read more than 40 pages per week.”

Actions by the Obama administration have increased college costs and driven up tuition. The administration has discouraged vocational training needed for high-paid, skilled factory work, contributing to a severe shortage of skilled factory workers -- thus making it harder for factories to expand their operations and hire workers, including the unskilled workers among whom unemployment remains highest.