Record borrowing by college students who are graduating without jobs may lead to the next financial crisis, according to a recent report by Moody’s Analytics.

Reports Huffington Post:

“The long-run outlook for student lending and borrowers remains worrisome,” concluded the report, which came out in July.

“Unlike other segments of the consumer credit economy, student loans have not demonstrated much improvement in performance despite some improvement in the broader economy. … [T]here is increasing concern that many students may be getting their loans for the wrong reasons, or that borrowers — and lenders — have unrealistic expectations of borrowers’ future earnings.”

The Moody’s report points to the fact that student loan volume growth, unlike other lending, has accelerated during the recession. This is due in part to people seeking more education and retraining as well as some students opting to remain in college longer to avoid poor job prospects.

The student loan debt load now outpaces credit card debt, and according to Mark Kantrowitz, who publishes the financial aid websites Fastweb.com and Finaid.org, the average 2011 college graduate carries $27,200 in student debt.

“Fears of a bubble in educational spending are not without merit,” the Moody’s report said.

Using consumer credit data from Equifax, Moody’s noted the original borrowing amounts taken out by students have risen significantly over the past two years.

And now…

This is EbenGregory.com…telling you that education shouldn’t make people slaves – its task is to do the opposite. But you don’t hear me doe.