Scary: The Statistical Correlation Between The US Budget Deficits and Student Loan Build Ups

Interesting enough when one puts together the budget deficits and accumulated student loans side-by-side as shown in Figure 2, then one can start telling an interesting story. Without any formal training in IRI or Education Data Analytics, an individual will notice the two lines persistently are moving toward the same direction, in particular, after 2013.  The existence of a positive correlation between the two lines can be observed through Data Visualization (DV-Figure 2 upper side) or Data Analytics (DA-Figure 2 lower side).  What will be the possible circular and spiral implications of such a relationship?

  1. The American public will not see, at least in the near future that the accumulated student loans will decline, so long the country spending is higher than its fund inflows.
  2. For those who expect to have their loans are forgiven will soon realize that may be far from reality.  Simple reasons, where the government will get the resources to do so?  Especially if budget deficit continues.
  3. Prolong deficits will cause less funding is available from both federal and may be state agencies.
  4. US higher ed institutions will depends on tuition revenue to fund their operation.  That said, tuition will likely to creep up.
  5. Accumulation of student loans will keep going up.
  6. Less and less citizens of the country are able to afford a college education.
  7. College enrollment will be impacted in a negative way.
  8. With less money is available due to reduction on both federal and state funding, alumni’s donation, as well as from the tuition money, will finally force higher ed institutions to cut their research fund.  That will affect the innovation in the future.
  9. College down sizing, merger and closures will likely to continue occurring.
  10. The likelihood of universities and colleges employees lay-off will go up.

These circular and spiral effects will get larger impacts to the whole country. When they do, what will happen to the economy?  Your thoughts?