Higher education bubble update: Americans owe more on student loans than credit cards

We’re moving toward $1 trillion in student loan debt. And of course, at least some of that credit card debt it either student loan or education-related. Those keggers don’t pay for themselves.

Last June, for the first time in history, Americans owed more on their student loans, a record $833 billion, than on their credit cards, $826.5 billion. The amount owed on student loans increases at a rate of about $2,853.88 per second, meaning we’re on track for total student debt to cross the $1 trillion mark sometime this year.

Perhaps this trend explains why the Democrats tucked a government takeover of the student loan industry into ObamaCare. Not only did that move prevent debate on the takeover, it tied a whole lot of American families directly to Uncle Sam’s credit line.

Over the next decade, between reduced subsidies to private lenders and interest collected from students, the expected profit is $60 billion. Student aid would be increased by about $40 billion, leaving the U.S. Treasury $19.4 billion in the black thanks to this takeover. That profit gets counted toward the reconciliation bill’s score from the Congressional Budget Office, and voila! more deficit reduction from the health care reform bill.