Student loan bubble: Not as bad as it looks

Here’s a scary headline from yesterday: “Student loans soar 275% over past decade.” It’s true, the Motley Fool reports. Total student loans outstanding were $241 billion in 2002. Today, it’s $904 billion, and it shows no sign of slowing down. “Student loans could be the next housing bubble,” former Labor Secretary Robert Reich said in March. He may very well be right, but there’s another side to this story. Yes, total student loans have surged over the past decade. But what else happened during that time? The number of students enrolled in colleges jumped 40%. The rise in college attendance has been ongoing for decades, but really spiked in recent years — particularly among graduate students. As the jobs market dove in 2008, armies of recent college graduates ran to grad school in lieu of an employment market that had no room for them. In 2009, the number of people taking the LSAT (law school entrance) exam jumped 20% from the year before. The number taking the GRE (standard grad school entrance) exam popped 13% last year. “When job creation slows, there’s an increase in the number of people who pursue a graduate degree,” The New York Times reported two years ago…

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