We have discussed numerous times the surge in Student Loans as the lifeblood of the consumer credit expansion that we seem to be having but now its just getting ridiculous. Smart Money [6]reports on the growing use of student loans for the private K-12 education needs of affluent families. This is not affordable loans for impoverished savants to get their PhD at 14 years old, roughly 20% of families that applied for aid to pay for their children's kindergarten through 12th grade private school education had incomes of $150,000 or more, up from just 6% in 2002-3. 'Pre-college' loans are becoming more popular as the story notes "It used to be that families first signed up for education loans when their child enrolled in college, but a growing number of parents are seeking tuition assistance as soon as kindergarten." These loans, which do not have to be repaid until the child graduates college are expensive (varying between 4 and 20% and average $14,000) which would be on top of the nearly $34,000 average that 1 in 6 parents already carry for college graduates - leaves parents at risk of owing considerably larger sums of debt. Still, perhaps the e*Trade baby will put that cash to good use but one parent sums up the alternate reality that exists within so many US households with regard to debt: "We'll figure out how to pay for it then, or with any luck they'll get scholarships," he says. "Right or wrong, we're hoping our experiment works." Keep buying those Mega Millions tickets too...
[1]- Consumer Credit [2]
- Reality [3]
- Smart Money [4]
- Student Loans [5]
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