The student debt mountain: another looming catastrophe

Is the staggeringly high levels of student debt another subprime crisis waiting to happen? David C Stevenson reports.

Student debt is a problem, and it's only going to get worse as defaults shoot up and the millennial generation cut spending to repay their debts. Hedge fund manager James Rickards of Tangent Capital, discussing the US experience, even describes it as "the next subprime crisis" waiting to happen.

Here are some scary facts about the US situation: in 2013, total student debt hit $1trn more than total US consumer debt (excluding mortgage debt). The average individual owes $24,000, but 11% had more than $50,000. This is at a time when US higher education costs have soared from 2000 to 2012, the average price of college tuition rose by 44%.

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David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.