Always was concerned about the next 50 years and the creation of wealth for this generation- Is there a tipping point in the future where they just can't pay it back and defaulf?
A real answer- One, most importantly, young adults are going to stop attending four-year universities soon. The tuition bubble has to pop. Ideally, the higher education market tends toward decentralization. The main reason college is so expensive right now is that putting the various services all in one place is a huge sunk cost (and, of course, it's expensive because it can be; inelastic demand, profit motive^). Professors, books (not the scam textbook industry^^, just books) and chalk are damn cheap. Think about it -- what do your adjuncts make? How much do a few books by Kant, Descartes, Plato and Mill cost? Add in chalk and paper and you have Phil 101. You're paying for centralization, and the reason you have to do it is signalling. This is beginning to change. Second implication -- the unlucky group gets screwed. The first point is just about how the market works. It overextends and corrects to equilibrium, and so on. And the economist Schumpeter came up with creative destruction to describe a semi-related concept which is applicable here: while the education bubble is popping, someone is going to get hurt. A generation. Looks like this one, lucky us. We're the ones who a) pay for college and b) probably live out most of our lives post-bubble in a world where a college education is worth less than what we paid for it^^^, so we come out behind. That's what your post is alluding to, and the best answer is, yes, some people already have had to default (or get their wages garnished); undoubtedly more will, in a higher percentage than previous generations. But we'll see. People are resourceful, and I vaguely recall seeing research demonstrating that we haven't seen student loan defaults in nearly the predicted numbers (yet). Those first two I'm pretty sure about. It's speculation, but the idea of an education bubble is pretty widely received by now. To see the consequences of its collapse we need only look to history. The third implication is broader and involves other facets of this generation's difficulty with the "creation of wealth." Potential results: stuff like mass defaults on debt, civil unrest, a more organized version of Occupy. Or maybe our government will step in and expand the social welfare net. Obama has already taken steps in that direction. A topic for another essay is the idea that, hey, maybe we're the generation that doesn't really get to retire, and even if we do, our social security is gone. Who knows. In 50 years we're completely fucked in a million other worse ways, so who gives a shit. PS: it's worth noting that enterprising people can twist this lovely college cost situation to their own advantage. Research scholarships and aid grants. Take classes one semester on, one off, save money, pay as you go. Transfer from a community college. Avoid grad school. The system does have exploits. I graduated with savings -- it's totally possible, although getting harder. One thing I do hope to see in the near future is more personal finance acumen in youths, out of basic self-defense. ^yes, state schools are in many ways "nonprofits" -- I once had a professor bring this up as an actual objection in a conversation about how tuition was fleecing some friends of mine -- I gestured out the window to the $200m football stadium, etc.... ^^definitely also a bubble of sorts, propped up by the university presses and the network of professors who assign each others' books with slight modifications per semester and per school; luckily circumventable ^^^note: this is not yet reality; for most degrees, a college education is still worth doing if you measure the gap in future earnings, according to most recent research I've seen
The real answer is that 20 year olds are not buying houses, which is depressing the housing market anywhere that is not in California or New York. With these people not buying houses, they are not buying furniture either. And they are buying used cars, not new, if they are buying cars at all. (Car ownership of 20 somethings is the lowest of all age groups in the US.) And if you are living in an apartment, you are not buying appliances either. And with limited living space, you are probably not buying too many consumer goods as you don't have a place to put them. Durable goods are a huge part of the economy. Those manufacturing jobs tend to be better paid and have better benefits than service sector jobs for non-college graduates. If this generation gets into the habit of not buying things,
then there will be layoffs and other downsizing which will further stagnate the economy.
This has been written about by baby boomers who created this fiasco, and of course blamed millennials for being cheap/lazy/entitled etc. More people will be looking at trades instead of college and maybe that bubble will pop; there are signs this is beginning and more signs here
It's a lucrative and excellent way to control the working population. When you spend most of your life trying to stay afloat you don't think of doing something foolish like fight for rights and the like. I don't believe it is any kind of conspiration, just things begetting things.