Professor G. Marcus Cole spoke with Becky Yerak of the Chicago Tribune on student loan debt in the US.
Move over, mortgages. Get out of the way, Greece. Another economic doomsday
scenario is emerging.
Student loan debt has reached about $870 billion, exceeding credit cards and
auto loans, and balances are expected to continue climbing, the Federal Reserve
Bank of New York said last month. In February, the National Association of
Consumer Bankruptcy Attorneys referred to a “student loan ‘debt bomb’ ” and
wondered if it was shaping up to become “America’s next mortgage-style economic
crisis.” Such a burden could crimp an already weak economy.
It would “result in a dramatic increase in the cost of student loans for all
borrowers, ultimately drying up the availability of such loans for those who
need them most,” testified Marcus Cole, a Stanford University law professor. He called it an “unjust transfer from innocent lenders who did nothing more than give money to people in hopes of being repaid someday.”