The authors state: "The wages of young college graduates have fared poorly during the Great Recession and its aftermath. Between 2007 and 2011, the wages of young college graduates dropped 4.6 percent (5.1 percent for men and 4.1 percent for women). As the figure shows, however, the wage growth of young graduates was weak even before the Great Recession began; they have fared poorly over the entire period of general wage stagnation that began during the business cycle of 2000–2007. Between 2000 and 2011, the wages of young college graduates dropped 5.4 percent (1.6 percent for men and 8.5 percent for women)."
Moreover, Mark Perry at the blog Carpe Diem (see here) shows the increasing cost of higher education, relative to price increases in the rest of the economy.
He states: "The CPI for college tuition has increased almost 12 times since 1978, compared to the 3.5 time increase in overall consumer prices, and the 4.4 time increase in home prices at their "bubble peak." What the two bubbles have in common is that they have both been fueled by political obsessions: one with home ownership and another with college education."
Finally, Phil Izzo over at the Wall Street Journal (see here) calls this a student loan "bubble" and it makes his "Number of the Week."
He states: "368%: The jump since 2007 in the measure of consumer credit held by the government comprised primarily of student loans. If a student loan bubble were to pop, the government, not private banks, would be the one standing around with gum in its hair." And, "The bulk of any burden from a student-loan debt bubble bursting is likely to fall on the borrowers themselves. While that means the broader economy can avoid a systemic crisis, it will struggle with a younger generation whose spending power is constrained limiting growth for years."
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