A key reason why a preponderance of the population is fascinated with the student loan market is that as USA Today reported in a landmark piece last year, it is now bigger than ever the credit card market. And as the monthly consumer debt update from the Fed reminds us, the primary source of funding is none other than the US government. To many, this market has become the biggest credit bubble in America. Why do we make a big deal out of this? Because as Bloomberg reported last night, we now have prima facie evidence that the student loan market is not only an epic bubble, but it is also the next subprime! To wit: "Vince Sampson, president, Education Finance Council, said during a panel at the IMN ABS East Conference in Miami Monday that lenders are no longer pushing loans to people who can’t afford them." Re-read the last sentence as many times as necessary for it to sink in. Yes: just like before lenders were "pushing loans to people who can't afford them" which became the reason for the subprime bubble which has since spread to prime, but was missing the actual confirmation from authorities of just this action, this time around we have actual confirmation that student loans are being actually peddled to people who can not afford them. And with the government a primary source of lending, we will be lucky if tears is all this ends in.

More bullets from Bloomberg:

Vince Sampson, president, Education Finance Council, said during a panel at the IMN ABS East Conference in Miami Monday that lenders are no longer pushing loans to people who can’t afford them.

The bubble in the sector is over

Noted political dynamic of education funding

U.S. is currently 16th in the world in degree attainment

He notes the U.S. education secretary and U.S. president have probably looked at that number

Nevertheless state universities are struggling because state governments are poorer: Sampson

Says a sustained effort is underway at some schools to bring in out-of-state tuition, which typically pay 100% of the cost

Barbara Lambotte, a senior credit officer at Moody’s said during the panel that student loan lenders are chasing the same potential borrowers

Everybody is going after borrowers with co-signers and high FICOs, also students who may be going to the better schools: Lambotte

Gary Santo, a MD at First Marblehead said during the panel that borrowers too are being more conservative in theirchoice of education funding

Lambotte said Moody’s outlook on private student loan ABSmarket is negative, but newer loans should perform better

To be sure, when the implications of the $850+ billion student loan bubble blowing up spread through the financial markets, it will make subprime seem like a tame walk in the park.

Of course, nobody will care about it until it is too late. Just like every other time because this time is never different.