What Student Loans Are Really Spent On
There was a time when student loans, now almost entirely funded by the US government, and thus a general obligation of all US taxpayers who however have no recourse to ever collect on any collateral, were spent on such trivial things as, well, higher education. Sadly, it appears that that is increasingly no longer the case. To wit: "feds accuse Newport man of using school loans on drugs, motorcyles, games and tattoos." At least no iPhone 3, 3S, 4, 4S or 5 was purchased using private and taxpayer cash.... in this case.
Robert Thomas Price Jr. borrowed about $105,000 for his tuition at Harrisburg Area Community College from 2005 and 2007, federal authorities say. It doesn’t cost anywhere near that much to study at HACC, though.
So Price, 45, of Newport, is facing federal student loan fraud and mail fraud charges.
A U.S. Middle District Court indictment alleges that Price spent much of the loan money on crack cocaine, cars, motorcycles, jewelry, tattoos and video games.
U.S. Attorney Peter J. Smith said today that Price secured about $92,000 in private student loans and around $13,000 in federal PELL grants and Stafford loans. Price was aided in the alleged scam by his ex-wife, a former HACC employee who is not charged or named in the case, Smith said.
He said that if convicted Price could receive up to 20 years in prison and $250,000 in fines.
Tuition for 12 credits of study at HACC currently costs $2,022 per semester for students from sponsoring school districts and $2,748 for those from non-sponsor districts.
And now we know.
Of course, another curious place where as we pointed out in the past there is an odd correlation, is between federally funded student loans and the cash holdings of a certain fruit-shaped stock...
... as well as its stock price.
But don't worry: correlation never implies causation. What causation there is, will be apparent in a few short years, when the Fed, having failed with QE8 (just like the BOJ last week), proceeds with QE9 - monetizing student loans... and the bad debt held by Apple Bank of course.
And for those curious what other 'fringe benefits' exist for banks as a result of cheap student debt, and the willingness of student to take on more, more, more debt, here is an interesting infographic