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Our President gave an inspiring speech at the University of Colorado. He said that no matter where you come from, you still deserve good education. He also said that this is the greatest thing about America and the goal here is to make colleges affordable.

However, looking at his efforts towards this goal, we cannot fail to see the similarity with his plan of bringing down health care costs. This means, prices are all set to be driven beyond inflation. Higher education bubble may yet be closer than we think. This could be our next fiscal nightmare.

Student loan debts far outnumber credit cards in our country. According to a report from USA Today, this year, our student loan debt will cross one trillion dollars. Many find themselves in a deep hole due to rising costs. Last year, we saw many of our graduates saddled with $24,000 student loans and walking away with a diploma. In the year 2009, student loan default rose to 8.8 percent.

A legislation stipulating a fifteen percent of discretionary income cap and balance forgiveness in twenty five years has already been passed by the Congress even as Occupy Wall Street activists have been crying hoarse for student loan forgiveness. In the midst of this, President Obama announces his plan to forgive loans after ten years and lower the cap to ten percent of the discretionary income.

Where is all this leading to? Logically we can see a five percent in fifteen years next. In a statement, Arne Duncan, the US Education Secretary says all this can be done without burdening the taxpayer. According to experts, this is certainly not true and taxpayers are indeed in for trouble.
Government aid does nothing but benefit institutions rather than students.

College fees and tuition in the past decade surpassed inflation by more than five percent a year and this speaks for itself. This shows where all the financial aid goes. Recent decades has seen a swift rise in prices by universities and colleges nullifying increase in aid.

Greedy academics are also responsible for skyrocketing higher education price. Administrators are paid a fortune by public universities fed by student aid dollars. Students are undoubtedly the biggest losers. They get lured into universities attracted by these federal loan offers and eventually drop out of school. They are saddled with the debt without a degree.

Graduates are losers too with little or no income and with six figure debt. To warn student on student loan cost, White House is working on a project called “Know Before You Owe”. Too much of a good thing can lead to disaster just as mortgages that brought on the housing bubble. Increased federal financial aid could mean rampant tuition inflation and high non-completion rates.

It is time to reconsider and rework priorities and bring about measures that could put our education system on the right course. Otherwise, we are all set to face another major financial disaster similar to the housing bubble.