He’s $130K in debt with a 1-year-old to feed: Why some students are spiraling right now | Ivory T…

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He's $130K in debt with a 1-year-old to feed: Why some students are spiraling right now

On an August night in Texas, Pablo Pratt put his 1-year-old son to sleep and sat down with his wife, trying to make the numbers work. Their rent was due, daycare costs were piling up, and now, after changes to popular repayment options, $582 in student loan interest had quietly hit his account.

Pratt, 28, was one of millions enrolled in the Biden administration’s Saving on a Valuable Education (SAVE) plan who were charged interest for the first time in a year. His family was already living paycheck to paycheck when the surprise interest charge added additional stress.

“We're barely just coasting by,” Pratt says. “It spirals and then one thing leads to another, you can go from something good to something really bad, really fast.”

Ivory Tower Debt Trap: Student Loans Distort the American Dream

The ROI on college is plunging. Colleges are failing to educate, and instead loading kids up with unshakable debt and failed ideas.

In a TikTok video that went viral this week (newsworthy, I know), a barefaced young woman sits in her car, in the middle of what we Gen Zers call “a crash out.”

Alyssa Jeacoma, you see, has been making student loan payments of $1500/month (the cost of a one-bedroom apartment or the mortgage on a starter house) for two years.

In tears and disbelief, she explains that she spent two years thinking she was paying down her debt, and was shocked when she discovered that, thanks to a 17-percent interest rate, her total balance had gone up.

This Is How the Student Loan Bubble Is Primed to Pop, From a Student Funding Expert

Fueled by easy money, inflated tuition and high default rates, the student loan bubble mirrors the 2008 subprime mortgage crisis. We could be headed for a potential financial collapse. What can we do?

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In 2008, the U.S. economy nearly collapsed under the weight of subprime mortgages — a crisis built on easy credit, government guarantees, a near-religious confidence in ever-rising home prices and a reckless belief that everyone should and could own a home, regardless of their ability to pay.

We learned, painfully, that good intentions can mutate into monsters, and the result was a decade-long financial and social catastrophe.

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