Accounting & Investing Info for San Antonio A & M
Tuesday Feb 18 2014
The trillion dollar plus student loan debt now threatens the housing market. Young people who already have a mortgage equivalent debt are reluctant to take on more debt. New applications for mortgages are down 20% in the last four months.
Student loan debt will eventually be the next sub prime mortgage crisis.
Debt to income ratio should be stressed to students in High School before they venture out into the vulnerable state of mind of college life. Both of my kids were inundated with credit card solicitations as soon as the were accepted at college. The pressure doesn’t stop with credit cards. The financial advisers were telling them to add on “living” expenses to their college loans. WHAT??? There is no reason to have $75,000 debt for college loans. Could society be so out of control for our youth that they missed the lesson in life to live inside their means of income. What I am saying is if they can’t afford to go to an elite university, then start off with completing their basics at a local college, then transfer to the university to finish their degree. Which leads to the housing market point. Why would a college graduate ever think to purchase a home way above their income level. Somehow we as a society have FAILED to teach this generation they should start off small and work their way UP the ladder. We need to look at the bigger picture, it is not only the housing market, but this age group wants everything their parents have from expensive cars, houses, furniture, etc. Thank goodness the Mortgage companies are not continuing the trend of over extending a lenders debt ratio.
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It would be nice if students could barrow debt at super low interest like the banks, and wall street do. The government is only interested in screwing the middle class. Maybe if the interest wasn’t so high and could be forgiven we wouldn’t have such a big Problem.There should be no special treatment for the elite class.
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Professor Elam 
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