2015's heavily-indebted graduating class of college seniors has a lot of options. Not paying their loans is one of them. Read on...
"Right now, we’re living in a make believe world. Debt can’t be the main source of growth. Without a pick-up in final demand a lot of bad debts are out there. As long as you have excess capacity in the commodity production you have bad loans throughout the system. That means you have governments who can’t repay their debt without selling new loans and all their bad loans are funded by the central banks.... I think a global recession is inevitable...You just can’t devalue your way to prosperity. As long as the number of shares keeps declining, stock prices are going to go up and nobody cares [but] in the long term there has to be a major correction."
"The U.S. Department of Education wants to remind you that you may qualify for a repayment plan that calculates your monthly payment based on your income. You will likely qualify for an income-driven repayment plan if your total federal student loan debt exceeds your annual income. Under an income-driven plan, your initial payment could be as low as $0 per month." -- US Department of Education
Militarization Is More Than Tanks & Rifles: It’s a Cultural Disease, Acclimating Citizens To Life In A Police StateSubmitted by Tyler Durden on 05/20/2015 22:00 -0400
The problems we’re grappling with have been building for more than 40 years. They’re not going to go away overnight, and they certainly will not be resolved by a report that instructs the police to simply adopt different tactics to accomplish the same results - i.e., maintain the government’s power, control and wealth at all costs. This is the sad reality of life in the American police state.
The Student Loan Write-offs Have Begun: 78,000 Students File For Debt Discharge After Corinthian ClosuresSubmitted by Tyler Durden on 05/20/2015 19:00 -0400
"More than 50 consumer and labor organizations sent a joint petition on Tuesday to U.S. Secretary of Education Arne Duncan, urging him to cancel federal student loans owed by 78,000 who attended Corinthian schools," Reuters reports, confirming the notion that for-profit colleges may represent the next multi-billion dollar taxpayer bailout.
Many factors combined to make it the perfect storm: the demographic rise of the millennials, easy money from the Fed, the “Chivas Regal” effect in pricing strategy that many colleges and universities adopted, and the US government virtually taking over the market for student loans. It’s a vicious circle as colleges raise prices, students take out easy loans, and the institutions raise prices again. However, it all seems to be coming to a head as several factors begin to show the chinks in the armor.
"Loans take time to season and go bad, and Wall Street loves to package and pass along risk. The music will stop — it always does — and this will not end well.”
With the class of 2015 graduating with a record amount of debt, one hopeful student appears to recognize her fate all too well...
As we have pointed out for a number of years, according to the payroll jobs reports, the complexion of the US labor force is that of a Third World country. Most of the jobs created are lowly paid domestic services. No economist should ever have accepted the claim that the economy was in recovery while participation in the labor force was declining. Having looked at the actual details of the payroll jobs report, which are seldom if ever reported in the financial media, let’s look at what else goes unreported in the media.
The graduating class of 2015 is the most heavily-indebted college class in history and the chart is "up and to the right," which in the case of student loans, is anything but encouraging. Fortunately, we have some advice for this year's graduating seniors...
In a quarter in which US GDP is set to decline consumer credit, according to the latest update from the Federal Reserve, increased by just over $45 billion. But how is it possible that with such a massive expansion in household credit there was no actual benefit to the underlying economy? Simple: 98% of the credit lent out in the first quarter, or $44.3 billion, went to student and car loans!
To paraphrase H.L. Mencken, anyone who wants the government and Federal Reserve to create a housing recovery, deserves to get it good and hard, like a four by four to the side of their head. Subprime mortgages, subprime auto loans, and subprime student loans driven by preposterously low interest rates are the liquefying foundation of this fake economic recovery. Most rational people would agree that loaning money to people who will eventually default is not a good idea. But it is the underpinning of everything the Fed and government apparatchiks have done to keep this farce going a little while longer. It will not end well – Again.
The past few years have been a period of relative stability for the U.S. economy. A lot of people have been lulled into a false sense of security during that time. These people have become convinced that our problems have been fixed. But they haven’t been fixed at all. In fact, our problems are far, far worse than they were just prior to the last financial crisis. Don’t let this next recession take you by surprise.
Although nearly 93% of parents say they expect their children to attend college, only 57% have either saved money or plan to save money for tuition. Those two figures don't match up, meaning someone will have to step in and fill the education funding void. Can you guess who it will be?