The big winner of the year, which is no surprise to readers here, was student loans. Student loans dwarfed all other borrowing, coming in at $114 billion on the year, with auto loans finishing second.
The graph below shows that autos and student loans made up 108% of the annual debt due to the decline in home equity credit.
11.5% of the entire $1.08 trillion in student loan debt is now 90 days delinquent. Student loans (red line below) recently passed credit cards as the most troubled credit market in the country.
I believe one of the most important trends in the next decade will be the move from campus style classroom education toward online education. As the price for college tuition continues to spiral out of control, while the return on the college investment ranges from disappointing to disaster, both parents and students will seek another opportunity.
This will begin with a small portion of students taking their first two years of core classes online and finishing their second two years of concentrated major courses in the classroom. Just this move alone will crush tuition costs as well as industries that currently rely heavily on the current higher education bubble (student housing). There will be both long and short opportunities in the investing world as this trend takes hold.
