Moody’s Warns Student Loans May Be The Next Financial Bubble To Burst
First Posted: 8/9/11 06:25 PM ET Updated: 8/9/11 06:37 PM ET
WASHINGTON — Record borrowing by college students who are graduating without jobs may lead to the next financial crisis, according to a recent report by Moody’s Analytics.
“The long-run outlook for student lending and borrowers remains worrisome,” concluded the report, which came out in July.
“Unlike other segments of the consumer credit economy, student loans have not demonstrated much improvement in performance despite some improvement in the broader economy. … [T]here is increasing concern that many students may be getting their loans for the wrong reasons, or that borrowers — and lenders — have unrealistic expectations of borrowers’ future earnings.”
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