Shocker: Inflated Student Loan Market About To Go The Same Way The Inflated Housing Loan Market Did

I’m shocked that “easy money” loans given out indiscriminately to pretty much anyone who wanted them would now be in jeopardy from inflated tuition prices and borrowers who can’t pay the money back.

Well imagine that.  Government-subsidized consumption inflates prices, which in turn prompts more subsidies, which in turn inflates prices even more until the entire industry collapses in a mess of unpaid loans and taxpayer bailouts.

Sounds…just like the housing market.

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New Phase for Student Loan Market

As in my previous entry, the federal government will soon begin acting as a buyer of last resort for older student loans. Since announced in November, it set to begin in this month. It will aim to free up additional money to make federally guaranteed student loans, ensuring their continued availability.

According to the program, Education Department will buy the loans after 90 days of The Federal Financing Bank help. Education Department has announced an agreement with the Bank of New York Mellon.

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