The cost of a college education has increased exponentially over the last 30 years thanks to easy college loans, increased grants, and the housing bubble.

In Spain, where home prices have fallen 22 percent with another 20 percent drop expected, new accounting rules will force banks to make provisions for bad loans after 12 months instead of the 72 months as it sits now.

With only 40% of student debt being actively paid back, this problem is growing worse quickly. Bankruptcy laws need to be changed immediately. Banks and colleges would drastically scale back lending, which is a good thing. College demand would drop, and colleges would be forced to live within realistic means again.

California is considering a bill that would convert most recourse mortgages into non-recourse loans…meaning that banks would no longer be able to go after borrowers to collect.

The real question is how will spending, saving, and risk-taking behavior change for the 20-and-30-somethings going forward. How many times can we be burned and still be willing to borrow and spend enough to keep the housing market and overall economy afloat?