There's a huge difference between the housing crash and a potential student loan 'crash'.
A house is an asset. A unique asset at that, the only kind you can live in (other than your car). An underwater house, despite the term, becomes illiquid. You literally can not sell it. If you become unemployed you can not move to find work without walking away and trashing your credit.
A drop in house prices affects everyone. The student loan crisis affects very few and even fewer who make a meaningful contribution to the economy.
An underreported aspect of the housing crash was the end of the house as a magic ATM machine. People were spending vast amounts of HELOC money during the boom. Literally doubling their mortgages by pulling out cash against their house. With the crash that has stopped and the economy has ground to a halt.
What market would a student loan crash take down? Are people flipping degrees somewhere? If people feel a degree isn't worth it they'll go to a state school or transfer in from a community college. At worst schools will be forced to drop tuitions.
The post mentions student loan debts in the billions, subprime losses alone are in the trillions. That's the money out in the open. There's even more money off the books as banks don't have to report a loss until they sell REO property. There's a shadow inventory of foreclosed homes right now that matches the houses you'll find on the MLS.
The student loan crisis will in no way shape or form "dwarf" the housing market crash.
I'd go even further and say that a 'crash' in the higher education market would actually be good for the economy. Unlike lower home prices, lower tuition rates would have no significant direct impact on existing college graduates, and would permit more people to seek admission, increasing competition and therefore increasing the caliber of students enrolling. Bright people whose talents would be otherwise wasted working at Walmart will instead be able to contribute at a higher level to the economy.
A house is an asset. A unique asset at that, the only kind you can live in (other than your car). An underwater house, despite the term, becomes illiquid. You literally can not sell it. If you become unemployed you can not move to find work without walking away and trashing your credit.
A drop in house prices affects everyone. The student loan crisis affects very few and even fewer who make a meaningful contribution to the economy.
An underreported aspect of the housing crash was the end of the house as a magic ATM machine. People were spending vast amounts of HELOC money during the boom. Literally doubling their mortgages by pulling out cash against their house. With the crash that has stopped and the economy has ground to a halt.
What market would a student loan crash take down? Are people flipping degrees somewhere? If people feel a degree isn't worth it they'll go to a state school or transfer in from a community college. At worst schools will be forced to drop tuitions.
The post mentions student loan debts in the billions, subprime losses alone are in the trillions. That's the money out in the open. There's even more money off the books as banks don't have to report a loss until they sell REO property. There's a shadow inventory of foreclosed homes right now that matches the houses you'll find on the MLS.
The student loan crisis will in no way shape or form "dwarf" the housing market crash.