US student debt might lead to the next financial crisis

 

In may not be trigonometry, but if you do the math, there is a great divide in how an estimated $2 trillion will be paid back in the near future.

For some analysts, US student debt has shades of the subprime crisis that felled the economy back in 2008.

But this time, instead of bricks and mortar for collateral, the new toxic debt is “secured” by diplomas, the supply in many cases far exceeding demand.

“What is the collateral there? I will give you my English thesis on Henry James in return?” asked P.J. O’Rourke, the best-selling author and economic satirist, of the riskiest student loans.

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