Opinion: The Looming Student Loan Crisis

(Aug. 23) -- Like home ownership, a college degree used to be perceived as one of the keys to success. Unfortunately, these days it's starting to look like a gateway to financial ruin.

The Federal Reserve has confirmed that as of June 2010, consumers now owe more on their student loans than on their credit cards.

A separate report reveals that one in five people can't make their monthly payments.

As a result, Sallie Mae and Citibank have become the arch nemesis of millions, and the country as a whole faces what some warn is America's next "mortgage meltdown."

Granted, we are all responsible for own actions and their consequences. But let's not play coy and act as if there isn't a systematic problem when it comes to higher education in this country.

In high school, it's drilled into students' minds that a wonderful land of opportunity awaits them after earning a degree. What's not explained is that colleges are like any other business, and thus, willing to say whatever it takes to get your money. They're also ready to sell us out to lenders all too eager to pounce on the financially illiterate who turn to them for funding.

This comes at a time in which it seems that the value of a college degree is going down while the cost of tuition steadily rises.

Young people are being saddled with enormous debt to attend college under the pretense of netting a job, only to later discover that the pay benefits might not be enough to help cover the long-term cost of their education. That is, if they're even fortunate enough to find a job in this economy.

Talk to any member of Generation Y, and you're guaranteed to hear first- or second-hand accounts of student loan horror stories.

Graduates feel hoodwinked, screwed and trapped as they ponder over whether they will ever be able to pay off their loans in full. Some even internally debate whether their investment was made in vain. Others joke about entering more lucrative, non-college-degree-required industries ... like stripping or becoming a Kardashian. Or so I've heard.

Prospective college students are taking notice.

Although a new Sallie Mae-Gallup study reveals most parents and students still believe college is a priority, there is a growing concern over whether the cost is truly worth it. Of those surveyed, 53 percent feel college is worth the cost, down 9 percentage points from a similar poll conducted two years prior.

With the cost of college far outpacing the growth of non-loan financial aid, and the stalled economy eating away at most Americans' net worth, there's reason to be concerned.

We've already seen what happens when the housing and financial markets fail us. What is going to happen when the taxpayer completely buckles under the student loan crisis?

This looming debacle poses huge ramifications on this and future generations. It is another facet of the larger issue with our failing, consumption-based economy.

It's time for a real assessment of the value of a college education and to address the fallacy that college is for everyone. And it's time to give the student loan industry the regulation it needs.

If our government fails to act on the overwhelming student loan debt, an entire generation will likely fall to its knees over the pursuit of a degree. Do we want to fall with it?