The student loan bubble is an accumulating debt problem in the United States, setting up a disaster for our national economy. The student loan hypothesis states that as more and more young adults are unable to find jobs after they graduate from college, fewer students will be able to pay back their student loans (Chaker, 2009). Although many economists reject this hypothesis and say it's not a threat to our economy, multiple universities are raising their tuition rates. This means that incoming students will need much more financial aid and student loans in the future (Chaker, 2009). Statistics consistently show that student loan debt is continuing to increase (Clark, 2011).
In order to determine if this hypothesis is really a crisis or over exaggerated, we must first analyze the problem. Attending college is becoming increasingly more expensive. According to the College Board membership association, College tuition has increased 17% in two-year public universities, 54% in four-year public universities, and 33% in four-year private year universities in the last ten years (Clark, 2011). The national average of college tuition cost for students is currently about $8,000 per semester. Once room and board, books, and other fees are added in, the cost of attending a four-year university is a little over $21,000 per year (Clark, 2011). Because college tuition is increasing across the country, the need for financial aid is also increasing. Students are borrowing for school more than ever. Today, about two thirds of the students who attend college take out loans so they can afford the financial burden of college. After college, the average accumulated debt a graduate will have acquired is roughly about $23,000 dollars (Chaker, 2009.).
Aside from this, the United States is currently recovering from a recession and still showing minimal growth. The national employment rating is increasing and more and more college graduates are unable to find jobs after college.
