The Federal Reserve Bank of New York says that the total amount of student loan debt in America now exceeds the total of all credit card debt in the country.  It also exceeds the total of all auto loans.

The New York Fed says that there is a total of $870 billion owed on student loans in the United States right now.  Other sources claim that the total amount of student loan debt in the United States will soon exceed one trillion dollars.

Either way, we are talking about an extraordinary amount of money.

Sadly, approximately two-thirds of all U.S. college students graduate with student loan debt these days.  The average amount of student loan debt at graduation is approximately $25,000.

That might not be so bad if the economy was full of good paying jobs for college graduates, but that simply is not the case.

As college tuition continues to soar, the student loan debt problem continues to get even worse.  U.S. college students are borrowing about twice as much money as they did a decade ago after adjusting for inflation.

That is not a good trend.

The truth is that it has simply gotten way too expensive to go to college.

Back in 1952, a full year of tuition at Harvard was only $600.

Today, the price tag is $35,568.

So why is a Harvard education 59 times more expensive than it used to be?

Somebody is getting rich off of all this, and it isn’t the students.

In fact, many students are looking at a life of debt slavery for decades to come.

The following is a quote from one recent graduate from a recent Politico article….

“I pay almost $1,000 a month just in student loan repayment. I will have to do so for the next 30 years. How will I ever afford to buy a house, have children or save for the future?”

After working so hard all the way through school, is that any kind of a “future” to look forward to?

The system is failing our young people.

Many young college graduates have found themselves unable to make their payments or have simply decided to quit making payments.

Officially, the student loan default rate has nearly doubled since 2005.  But a new report from the Federal Reserve Bank of New York says that things may be even worse than that.  According to the New York Fed, approximately one out of every four student loan balances are past-due at this point.

But it isn’t just young people getting into trouble with student loan debt.

These days, financial institutions are increasingly targeting parents.  Federal student loans often do not cover all of the expenses of college in this day and age, and so increasingly loans are being made to parents to make up the difference.  Student loans made to directly to parents have increased by 75 percent since the 2005-2006 academic year.

Unfortunately, what students and parents are getting in return for all of this money is not that great.

I spent eight years of my life studying at U.S. colleges and universities.  The institutions that I attended were supposed to be better than most.  But most of the classes that I took were a total joke.  A 6-year-old child could have passed most of them.

Almost everyone agrees that the quality of college education in America is in a serious state of decline.  The goal is to get these kids through the system and to keep collecting the big tuition checks.

When I was in school, I could hardly believe how little was being required of me.  But being as lazy as I was, I certainly did not complain.

If only more parents realized what was really going on.

The following are some facts about the quality of college education in the United States from a USA Today article….

-“After two years in college, 45% of students showed no significant gains in learning; after four years, 36% showed little change.”

-“Students also spent 50% less time studying compared with students a few decades ago”

-“35% of students report spending five or fewer hours per week studying alone.”

-“50% said they never took a class in a typical semester where they wrote more than 20 pages”

-“32% never took a course in a typical semester where they read more than 40 pages per week.”

Are you starting to get the picture?

If you are in college right now, enjoy the good times while they last, because when you graduate you will find that there are very few good jobs available for the hordes of new college graduates that are pouring into the labor market.

For a new college graduate, things can be rather depressing.  Just consider the following statistics….

*About a third of all college graduates end up taking jobs that don’t even require college degrees.

*In the United States today, there are more than 100,000 janitors that have college degrees.

*In the United States today, 317,000 waiters and waitresses have college degrees.

There are millions of college graduates that are unemployed in America today.  There are millions of others that have been forced to take very low paying jobs because that is all they can get.

It is no coincidence that incomes for households led by someone between the ages of 25 and 34 have fallen by about 12 percent after you adjust for inflation since the year 2000.

Young people in America are under intense financial pressure right now.

Many are unable to make it at all and have moved back in with Mom and Dad.  As I wrote about recently, approximately 25 million American adults are living with their parents at this point.

The system of higher education in this country is badly broken and it desperately needs to be fixed.

So do you have a solution to these problems or do you have a student loan debt horror story to share?

Please feel free to leave a comment with your opinion below….

The post Ben Bernanke Says That His Son Will Graduate With $400,000 Of Student Loan Debt appeared first on The Economic Collapse.

Today it was announced that the European Central Bank has agreed to make $638 billion in 3 year loans to 523 different banks.  Never before (not even during the last financial crisis) has the ECB loaned so much cheap money to European banks at one time.

This move by the ECB made headlines all over the globe.  CNBC is calling them “ultra-long and ultra-cheap loans“.

European authorities are hoping that European banks will use this money to make loans to businesses and to buy up the debt of troubled European governments.

But as we have seen in the United States, bailout money does not always get spent the way that the authorities intend for it to be spent.

The truth is that the banks could end up just sitting on the money.  That is what happened with a lot of bailout money in the United States during the last financial crisis.

European authorities hope, however, that European banks will take this super cheap money and lend it to European governments at much higher interest rates.

Unfortunately, global financial markets were not terribly impressed with this move by the ECB.  European bond yields actually rose and the euro just kept on falling.

Every few days another major “solution” to the European debt crisis is put out there, but so far nothing has worked.

For example, the European Central Bank has already spent over 274 billion dollars directly buying up European government bonds, and yet bond yields continue to hover in very dangerous territory.

But without ECB intervention, we probably would have already seen a major financial collapse in Europe.

The financial system of Europe is a total mess right now, and everyone is becoming incredibly dependent on the ECB.  The following comes from a recent Reuters article….

One of the key factors certain to have boosted demand is that banks are now more reliant than ever on central bank funds. The ECB said on Monday, in its semi-annual Financial Stability Review, that this dependency could be difficult to cure.

French banks have almost quadrupled their intake of ECB money since June to 150 billion euros, while banks in Italy and Spain are each taking more than 100 billion euros.

At this point, the ECB has the weight of the entire world on its shoulders.  One false move and we could see a huge wave of bank failures and we could be plunged into a major global recession.

But even with all of this unprecedented assistance, we have already seen some big time European banks fail.

Back in Obtober, Dexia was the first major European bank to be bailed out, and the cost of that bailout is going to exceed 100 billion dollars.

The funny thing is that Dexia actually passed the banking stress test that was conducted earlier this year with flying colors.

So what does that say about all of the other major European banks that did not do so well on the stress test?

In addition, it was recently announced that Germany’s second largest bank is going to need a bailout.

The following comes from a Sky News report….

Germany’s second largest bank, Commerzbank, is reportedly in discussions with the German government about a bailout after regulators said it needed to raise more money to cope with a potential default on its loans to governments.

“Intense talks” have been going on for several days, according to sources who spoke to the news agency Reuters.

Even with unprecedented intervention by the ECB, the truth is that the European banking system is rapidly failing.

In Greece, a full-blown run on the banks is happening.  According to a recent Der Spiegel article, funds are being pulled out of Greek banks at a pace that is astounding….

He means that the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion — by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum. Savings fell by a further €5.4 billion in September and by an estimated €8.5 billion in October — the biggest monthly outflow of funds since the start of the debt crisis in late 2009.

In all, approximately 20 percent of all deposits in Greek banks have been withdrawn since the start of 2011.

Other European nations are implementing draconian measures in an attempt to protect their banks.  For example, in Italy all cash transactions over 1000 euros have been permanently banned.  People will either have to use checks, debit cards or credit cards for large transactions.  This will “encourage” people to keep more money in the banks, and this will also make it much easier for the Italian government to track transactions and to collect taxes.

But it is not just in the EU where we find unusual steps being taken.

In the UK, the Bank of England is acting like the end of the world is about to happen.  The following comes from a recent article on the This Is Money website….

The deputy governor of the Bank of England today warned the situation surrounding the single currency was ‘worrying’ and that the Bank was making preparations to support British banks, should the eurozone collapse.

A temporary loan facility has been introduced as a precaution, for use in the event of contagion from the eurozone crisis endangering UK institutions, Charlie Bean said in an interview on BBC Radio 4’s World at One.

An article posted on Business Insider a while back says that Switzerland is also preparing for “a euro collapse”….

The Swiss government is preparing for a collapse of the euro, according to Swiss Finance Minister Eveline Widmer-Schlumpf.

She told parliament that a work group was studying the imposition of capital controls and negative interest rates to protect Switzerland from the capital flight that a euro collapse would engender

Frightening stuff.

On the other side of the world, the government of China is also taking action.  In fact, China is actually injecting money into the stock market in order to prop up stock prices.

The following comes from an article in the China Post….

In a movement considered “long overdue” by some analysts, the injection of government money into the tanking stock market to prop up stock prices has been given the green light, government officials announced yesterday.

Vice Premier Chen, the topmost government official charged with the country’s financial stability, however, insisted the fundamentals of the economy and the stock market are sound, expressing his hope for continued optimism among the people.

Of course the Federal Reserve is not going to stand on the sideline while all of this is going on.  In a recent article, I described how the Federal Reserve is helping to bail out European banks….

The Federal Reserve, the European Central Bank, the Bank of England, the Bank of Canada, the Bank of Japan and the Swiss National Bank have announced a coordinated plan to provide liquidity support to the global financial system.  According to the plan, the Federal Reserve is going to substantially reduce the interest rate that it charges the European Central Bank to borrow dollars.  In turn, that will enable the ECB to lend dollars to European banks at a much cheaper rate.  The hope is that this will alleviate the credit crunch which has gripped the European financial system by the throat.  So where is the Federal Reserve going to get all of these dollars that it will be loaning out at very low interest rates?  You guessed it – the Fed is just going to create them out of thin air.  Our currency is being debased so that Europe can be helped out.

If the global financial system was in good shape, all of these bailouts would not be happening.

These desperate measures are a clear sign that something is up.

The financial authorities of the world are doing their best to keep the system together, but in the end they are not going to be able to prevent the collapse that is coming.

The world is heading for incredibly hard economic times.

So is the end of the world coming?

No.

But to many in the financial world it may feel like it.  The coming global recession is not going to be fun.

We have now reached a point where it has become “normal” for governments and central banks to throw money at one financial crisis after another.

At one time, bailouts were so unusual that they provoked a great deal of outrage.

Today, bailouts have become standard operating procedure.

The bailouts will continue to get larger and larger, and authorities all over the globe will do their very best to keep the house of cards from coming crashing down.

Unfortunately, they will not be successful.

The post If A Global Recession Is Not Looming, Then Why Are Bailouts Flying Around As If The End Of The World Is Coming? appeared first on The Economic Collapse.