The blog Bay Area Real Estate Trends makes a good point about how the student debt bubble could hurt the real estate market… not to mention the former students.

The cost of college has exploded over the last decade, outpacing even the housing bubble. The culprits are the same wolves, just dressed up a little differently: easy credit, greed, and lots of kool-aid to go around. The toxic combination of high student debt levels and a terrible job market is crippling the financial future of recent college grads. From a real estate perspective, this could impact the starter-home markets for the a decade or more as the next generation of first-time homebuyers is already burdened with too much debt.

My Story

When I graduated from ASU in 1978 with a B.S. in Agriculture Industry, the economy was terrible, similar to today, but fortunately I had no student loans to pay off. I paid my way through ASU and had a sweetheart deal on rent when I lived at home which, most of the time, was all I could afford. I worked summers on fire crews for the U.S. Forest Service in Globe, AZ (Tonto National Forest), Big Springs, AZ (North Kaibab), Tusayan, AZ (South Kaibab) and Kingman, AZ (Bureau of Land Management). Those summer jobs and living cheap paid my tuition and expenses.

But, nevertheless, my friends and I struggled. We entered the workforce and found two back to back recessions. Most of us didn’t get economically established until we were in our late 20s.

Today’s Kids

It’s worse in a lot of ways for the kids graduating today. Fortunately, my son who just graduated from ASU has no student loans because he had a great scholarship, a mom who worked at ASU (75% tuition reduction) and parents who filled the gaps.

It’s tough out there economically but it’s gotta be a lot tougher for those kids with huge student loans.

ADDED: A related article just came out, “Higher education’s bubble is about to burst.”

ADDED: A related article about student debt generated by for-profit institutions, “Subprime goes to college.”

“As of 2009, the industry had almost 10% of enrolled students but claimed nearly 25% of the $89 billion of federal Title IV student loans and grant disbursements.”

ADDED: “8 Reasons Why College Tuition is the Next Bubble to Burst.”