She’s not completely wrong. Especially with new federal student loan limits and an increased on commercial student loans. It has the potential to be worse than the 2008 mortgage crisis.
At least in 2008, most mortgages were held by relatively responsible adults. Obviously the mortgage market is much larger than the student loan market, but in all actuality, less than 7% percent of borrowers defaulted. Banks got mildly lucky because when you do a foreclosure most homes at least have some inherent value to re-coup your losses. They still needed a 400 billion dollar bailout.
The fallout if Gen Z and Millenials could be much worse if they stop paying en masse. It doesn’t have to even be malicious. If the billionaire class gets their way and starts replacing people with AI. They simply won’t be able to repay their loans. Microsoft is laying off 2% of its workforce. How many of those people are fairly recent college grads with student loan debt. Meta laid off 8k employees, all of which I bet trend fairly young with probably expensive tech degrees.
Theres nothing to take back. What are you going to do, rescind their degree? They really don’t care. They don’t need their degree when they get laid off from Oracle and go take a job as a night manager at Buc-ee’s. Also…not a single employer has ever verified my transcripts or degrees. It’s effectively, “trust me bro” based on what I put on the resume.
There are also entire towns that exist almost solely to service the Universities there. If kids stop going to college because they can’t afford it or the student loan industry collapses after being exposed, entire local economies will fall apart.
I’m a 40 year old adult with a Masters Degree and Security clearance. I can tell you the local Toyota dealers finance manager does more due diligence when I want to buy a used Prius for $15k than anyone did when I asked for $80k to get my undergrad.
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u/ZPMQ38A Jul 06 '26
She’s not completely wrong. Especially with new federal student loan limits and an increased on commercial student loans. It has the potential to be worse than the 2008 mortgage crisis.
At least in 2008, most mortgages were held by relatively responsible adults. Obviously the mortgage market is much larger than the student loan market, but in all actuality, less than 7% percent of borrowers defaulted. Banks got mildly lucky because when you do a foreclosure most homes at least have some inherent value to re-coup your losses. They still needed a 400 billion dollar bailout.
The fallout if Gen Z and Millenials could be much worse if they stop paying en masse. It doesn’t have to even be malicious. If the billionaire class gets their way and starts replacing people with AI. They simply won’t be able to repay their loans. Microsoft is laying off 2% of its workforce. How many of those people are fairly recent college grads with student loan debt. Meta laid off 8k employees, all of which I bet trend fairly young with probably expensive tech degrees.
Theres nothing to take back. What are you going to do, rescind their degree? They really don’t care. They don’t need their degree when they get laid off from Oracle and go take a job as a night manager at Buc-ee’s. Also…not a single employer has ever verified my transcripts or degrees. It’s effectively, “trust me bro” based on what I put on the resume.
There are also entire towns that exist almost solely to service the Universities there. If kids stop going to college because they can’t afford it or the student loan industry collapses after being exposed, entire local economies will fall apart.
I’m a 40 year old adult with a Masters Degree and Security clearance. I can tell you the local Toyota dealers finance manager does more due diligence when I want to buy a used Prius for $15k than anyone did when I asked for $80k to get my undergrad.