College debt could be the next bubble to burst
WZZM-TV (Grand Rapids, MI)
25 August 2011

GRAND RAPIDS, MI. (WZZM) -- Financial experts say America's youth are facing mounting debt. Many opted to get graduate degrees, or higher education, but now can't find jobs to pay back the loans. Experts tell WZZM 13 that college loans could be the next bubble to burst.

Kristy Kieda, 27, graduated top of her class, but now spends her days looking for work.  She graduated in 2007 when the economy crashed. Without work, she decided to go to graduate school too. Now she still has no full-time income and is $40,000 in debt.

"I probably apply for 5 to 10 jobs a week, every week," says Kieda.  "I've had a lot trouble finding work. It was hard fought to get something for $10 an hour. In college, I made $16/hour working for the college, so this is ego bruiser to say the least." 

The little money she does make goes to paying off loans and credit cards pay for her basic needs. Financial experts say many are in Kieda's position where they can't find work to pay back their loans.

Nicholas Danner, Debt Counselor with GreenPath says, "It could  be a potential bubble that's out there, because some folks just don't have the money to pay loans back and they're not paying them back." 

As loans are paid back to banks, more are given out. But if this loan bubble "bursts", loans will be harder to get.

Danner says, "It does have a constricting effect because the lender isn't going to offer as many loans going forward, because they aren't getting paid on the loans they've already incurred in their portfolio." 

Kieda says she has a plan to find work. She's going to leave Michigan.

"I love Michigan, but I have to move.  It's quite obvious. I'm not going to stay here to be poor."

The hope is the grass is greener in another state.

College loans are nearly impossible to remove in bankruptcy.