The higher education bubble will not pop because student loan debt is not dischargeable. There are no bills in congress on the horizon to address the student loan problem. The government won’t fix it because it is making money:
Not only are student loans not a burden on the federal government, they’re a good investment. In 2012 the DOW estimated its subsidy for student lending at -17 percent. In other words, the DOE “subsidies” actually represent money coming in. Including all expenses, from loses on defaults to debt collection to program administration, the DOE will pull in more than $25 billion in profit from student lending this year alone—billions more dollars than the IRS will assess in gift and estate taxes combined, and more than enough to pay NASA’s whole budget.
I chose option 2.
