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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.
From PennLive
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
h/t @Cate_long
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We are already there, check-out the Obamey free phone link:
http://www.youtube.com/watch?v=cRanr2NyFCU
I want to vote myself gold. Which candidate should I voter for?
Bravo! Remember that man's name, he'll be one of the directors of the NY Federal Bank in ten years time! The man has whaat it takes - to take!
So ?
This is news ?
This is - monkee see, monkee, do.
Role models like we have at the Fed, on Wall Street, and in government have made the society we live in today a toilet.
Call me back when you have devoted half as much ink to Bernanke's fleecing of the American people. This story is like a fart in a hurricane in comparison.
Loser. Troll. Dick head. "Fair and balanced" Hah !
Is this guy "Rodney Dangerfields" long lost son? Or is he "Tommy Boys" brother?
how do i short student debt - and higher education in general ? in a future with no "desk jobs" and "grocery stores" i don't see why an education would be necessary -
I work at a land grant university. Student IDs on this campus double as "credit cards" that can be used to purchase anything on campus (and probably elsewhere - I don't know, I've never done it). Student aid is applied directly to the balance of these cards. I have witnessed students buying lunch, Coca Cola, lattes, and pastries with their student IDs. To summarize, students are using federally subsidized loans, grants, and probably even scholarships, to buy caffeine, sugar, and sports apparel. What's wrong with that? (sarcasm hopefully self-evident)
my mom tells me last weekend that her grandson (my nephew) gets free money on his college card that he can spend on things
free money, just got to put your name down on a $50k/yr loan.
"What's wrong with that?"
- it doesn't include hookers and blow?
Student "aid" is pretty limited and most of it is eaten up by tuition, fees and books. What's left can be used for school related expenses, which includes room & board. "Board" includes the beverages and pastries available in campus dining facilities. Would you suggest the food police decide what is allowable for student diets?
Student aid for undergrads tend to be more policed than aid for graduate students. I know a few people who have student loan checks deposited straight into their bank accounts.
One $5.00 cup of Starbucks over the course of the loan will cost the kid $10.79. If they drink a cup a day that comes out to $5400.00 ( assuming 5 cups per week and 4 years of school) . The kid will have paid $11,655.26 for his coffee over the life of the loan. Sound like a deal to you? For coffee
What Starbuck's needs is a high interest credit card. Then you can double or tripple that number pronto!
Just wait, it is coming soon to a Starbucks near you..."Would you like to rigister for Starbucks Credit Card and get ten percent off your order?"
Hard to believe MOO chelle isn't cracking down on that
Snacks: The USDA's Solution To Student's Healthy Lunch Complaints
snip
According to Department of Agriculture Secretary Tom Vilsack, the solution to the growing grumbling over re-vamped school lunch menusboils down to a good old fashioned snack.
School lunch trays are a bit lighter this year after Congress-approved calorie limits on school lunches went into effect in August. The new regulations, which were championed by First Lady Michelle Obama as part of her "Let's Move" campaign to fight childhood obesity, have inspired protests and even a video parody from students who claim the reduced lunches are making them go hungry.
Although I would not dare to say in speech class what I'm about to say here. When the teacher was going over speaker's voices that were poor he mentioned the Bernank and the Krugman. Well I was about to say that I thought that was because they worked for the illuminati and that they had to agree to castration before assuming their positions as economists. Thus the soprano sound of their voices. And, the Bernank still limps from his operation. Krugman doesn't seem to mind his at all.
And yes I am being paid to take speech class.
Which have more real value than an economics or law degree.
This is a single adecdote, and one in which the guy was caught and charged with fraud. Saying that correlation does not equal causation does not change this fact. College students do over spend, but I won't draw conclusions about the extent of it from an anecdote like this.
The point is when there is that much cash flowing around it's easy to abuse. Sure this is just one case, but I'd bet my bottom dollar that there are plenty more like it.
ROFLMAO!
20 years in Higher Education at three different instititutions.
This IS how it works!
No, not all are taking out $92,000 and buying crack, but I'd bet that 20%-40% of every loan goes to things that don't have anything to do with education and are a WASTE (besides the minds wasting away studying sociology, economics, and getting MBA's).
Some don't know they can get Student Loans, here' one,
http://www.youtube.com/watch?feature=player_embedded&v=tpAOwJvTOio
Do the banksters have to eat their $92,000 piece of the swindle? At least the gubmint has control over what Pell Grants and loans are spent on. Apparently the banks don't care.
Speaking of fraud, where does the Corzine matter stand withing the JustUs department?
Eric Holder: "Who?"
James Holmes used his grad school stipend and grant money to buy an arsenal and gear. Taxpayer money well spent.
Yes, but what did the real James Holmes spend it on?
Relax boys when the student loan bubble bursts you'll all be wishing for the good old days of housing Credit defaults.
Yeah I remember someone in Law School whose parents were supposedly paying for school and he was borrowing the max amount to live it up on coke and a BMW. But it was largely the exception instead of the rule.
However, I am sure that the non-dischargeable debt is temporary stimulative for all those i-products. I have also heard of someone having to move to a less nice apartment after school because they couldn't afford their apartment without the student loans.
I think student loans will be a big drag for our economy going forward. I also feel like with tuitions pushed so high there will be many jobless and underemployed Gen Y'ers and they will vote for anyone who sacrifices Medi-care if it will keep their taxes down.
just like Fraudi May, Fraudie Mac, and Fraudie Loan....poolit sell it off to the suckers, no buy back risk....sheeple
When I got my student loans, I never saw the money. It was just subtracted for the total amount I owed each semester. The remaining balance was my responsibility. Loans could be used to pay for room and baord, since that was added on the tuition bill, but I never heard of anyone getting cash for books and supplies.
Now I read stories about community college students getting $120k up front to fund $25k worth of tuition. I try to think who in their right mind would give an 18 year old $120k to pay for $25k worth of education.
Then I remember the banks don't give a shit because the loan is just sold to the government and they don't care if it ever gets paid back. The bank got their money.
You see that Mr. And Mrs. Fed board members, that is an asset bubble forming. You could see that before the first loan was made if you had a brain that functions with any logic.
Include FED Printer http://youtu.be/nsdZKCh6RsU no Badges.
Included with Forward Phone; Free FED Printer no badges needed.
Forward Obama phone # with 1800 Vote: what? and free studen loans, Snap cards., no free car? its Racist...1-800 sue line:
included with Forward phone do it yourself FED Printer.
Include FED Printer http://youtu.be/nsdZKCh6RsU no Badges.
Included with Forward Phone; Free FED Printer no badges needed.
Forward Obama phone # with 1800 Vote: what? and free studen loans, Snap cards., no free car? its Racist...1-800 sue line:
included with Forward phone do it yourself FED Printer.
Now where did this guy say he wasn't planning to stay in school 50 semesters? Loan APPROVED.
What are the odds he gets a "back to school" loan which he uses to pay the fraud penalty?
Didn't pay for any sex huh. That's OK - there will be plenty of that for free in the slammer.
I'm short AAPL, so I am really glad to hear student loan funds didn't go for iPhones ... but then again, iPhone Sex may be cheaper than real sex
Thats sounds like one hell of a Return on Investment to me.
"a former HACC employee who is not charged or named in the case" ... working for the goberment always provides a certain degree imunity ... like she didn't know what was going on
Student loan fraud is rampant at HAAC. They have a deal with Higher One for student debit cards also which is a major scam.
I got a student loan way back in 97 with the sole purpose to drink my way around Europe. And believe it or not I even qualified for some grants (free money). I always thought the whole thing was a scam.
I have people calling to rent my apartment. When I ask them what their income is they say that they will pay the rent and utilities from their student loans.
I really do not understand why they give them a years worth of rent and utilities thru their student loans for 4 years.
No wonder why so many cannot pay back their loans. The loans not only cover College expenses but all other expenses. Including Rent Utilities, Food, etc.
I also have people that call about my apartment and I ask them how is their credit. Way too many say their credit is "OK". They pay "many" bills on time but they have outstanding non paid Student loans and medical bills.
What i meant to say was that their credit was OK with the exception of their Student Loans and Medical bills. They said that they are delinquent and not paid which lowers their credit score.
USA! USA! USA!
...and the home of the brave!
"Just walk away." Be Happy. Pass all your obligations to The Next Guy.
My neighbors son feels this way. He owes $48,000 on credit cards, $68,000 student loans (for a history major), doctors bills, hospital bills , and so on. he says, "Why should I have to pay them?"
Asked why he is acting this way he responds, 'Everybody's doing it. Don't be so 'old fashioned.'"
This, my fine feathered friends, is The New paradigm. My neighbor (the boy's father) calls it, "Trickle Down Moral Hazard."
That guy's father is the one really at fault.
Monkey see, monkey do.
Kids are simply doing what they see..... 'Follow the Leaders."
Think of it. How many Fraudsters have been prosecuted for this subprime mess?
Zero.
"Trickle Down Moral Hazard."
Haha... I'm going to start using that one. It sums this whole economic farce up very nicely.
I bought two motorbikes with my university money. The first lasted three years and the second 19 hours.
It is just a matter of prioritising. Anybody still actually working for money is an idiot or an idealist.
I do work for paper money but I rapidly exchange it for gold. Thus proving my stupidity.
The entire global economy is a confidence trick. I want to exchange my gold for a Kawasaki Z1000SX.
How long must I wait to exchange 10% of my gold for a Kawasaki Z1000SX?
"feds accuse Newport man of using school loans on drugs, motorcyles, games and tattoos."
Is that illegal?
Do we actually have a law which says you can only spend your student loans on specific scheduled items?
"School loans" here mean PRIVATE student loans. You know, the ones the friendly banksters make to future debt slaves who have no relief, even in bankruptcy?
Harrisburg Area Community College (HACC) is a scam. They kick students out with good grade averages for 3 "academic deficiencies" which can be late to clinic or a missing lab coat. The students kicked out are readily accepted again to repeat the semester because they get another round of student loans. They also make students use the Higher One card to access their loan money. They charge a $15 "inactivity Fee" along with per swipe fees and many other outrageous charges and fees. Any college that inflicts the Higher One card on its student body should be avoided.
The local papers are full of horror stories about the latest outrages at HACC.
And you think hft, inflation theft, tungsten corzine gold bars, congres, achses of serial terrists and Bunga Bunga are the only real things left.
Hello, you should get out on the street more. Wherever there is money or credit, there is a scam. This was not about student loans, this was about credit...
Fraudulent income tax returns, identity theft, run up 50 credit cards to the limit, food stamps, SS death benefit, embezzlement to support that video poker habit, 5 percent cash to the purchasing agent, 3 percent of all material and 50 percent of first 3 percent of material saved below quota, amway bonus quotas ... I dont know when to stop ....
/comforts.
great post, it's the amrkn way.
This is nothing new. I knew people that bought cars, paid for computers, took Spring Break vacations, and on and on, all through the miracle of student loans. I once knew a guy by the surname of Bowles who was on his third or fourth bachelors degree--his plan was to stay in college forever and just keep taking out loans. We joked that the government should come out with a new "Bowles Loan" for people like him. I'm not sure how that ended up for him, but I figure that was more than 20 years ago, so he's probably on his 9th or 10th bachelors degree by now.
So the banks will have to wait a bit longer for him to be their debt slave.
Gubmint loans max out at $57,000 for undergraduate, $138,500 for graduate & professional students. Apparently the banks are happy to accomodate since his plan would max out gov benes pretty fast.
They're learning how to be debt slaves in college.
Right... so .0000001% abuse the loan money and spend it on tattoos, booze and booty and this warrants your headline 'What Student Loans Are Really Spent On'?
The criminals are the banks making gross profits off administring the loans and the private for profit colleges/schools which take our TAXPAYER money in the form of a student loan and provide the student with a worthless education and no marketable job skills. They hurt American taxpayers & the students and they are owned by the biggest Republican corporations in the world. Same with QuickLoan outfits on every other corner in Florida and other states preying on poor people. That's truly the American way (of today).
"alleges that Price spent much of the loan money on crack cocaine, cars, motorcycles, jewelry, tattoos and video games."
These sound like typical student expenses for a BMOC.
It is not uncommon but normal and quite acceptable - among today's students - to live on student loans for some or all of college - or beyond. I don't know when this began but it's been this way for at least 10 years.
If the lender gave each loan disbursement directly to the institution, most of today's students would have no money on which to live -none, zip, nada (incidentally, suggesting they find a job is simply stupid in light of today's economy, and while it is certainly possible to work and attend school simultaneously, it is the height of hypocrisy for anyone who did not do just that to suggest anyone else should, not to the mention the fact that academic performance will suffer for the vast majority of students who attempt it).
That being said, living on NONDISCHARGEABLE DEBT with a ~6% interest rate and a term of anywhere from 10 to 30 years is absolutely, completely idiotic; it is the realized perfection of debt slavery.
I cannot fathom that there is not a minority of students who are acutely aware of this insanity and yet have no choice if they wish to attain a professional degree and do the work for which they have a passion; the rest, of course, are merely content followers of the path of least resistance, unknowing or uncaring of the implications of their debt burden - and why would they be any other way when it has been perfectly acceptable, possible, and encouraged - in our society - to finance one's entire life this way for over half a century.
If a full time student works 20 hours, they are qualified to receive SNAP benefits. Four five hour shifts are not hard to fit into a student's schedule, though it may cut into the drunken debauchery side of college. I highly recommend it for a taste of independence and a little help from the government that can help reduce student loans.
I graduated debt free 2009 found a job still did masters full time til 2011 had a grant pay for everything thank God but I envy those career students sometimes. The ones who graduate with six figures of debt, can't find a job and so go get their masters and add another $50k
it sounds like a never ending party. Not getting up til 9AM, going to the gym or exercise class around 10AM, leisurely coffee as you look over the books. I envy them sometimes
At least he didn't spend his student loans on gold and silver. That would have been a hanging offense!
I heard of a guy who signed up for ROTC and took their money for two years and then opted out with no further obligation. I know he bought himself a stereo and some other fun stuff...
OT sort of,
"Knowledge is good."
- Emil Faber
I know a guy who is 35, recently divorced, fired from multiple jobs. Down on his luck in general. His solution to being broke? Went to night school for an MBA in "entrepreneurship". He lives on his student loans, no other income and 150k in debt as I write this. Only in America.
Once he gets his degree and is officially an "entrepreneur", he could leverage up and run for office.
No doubt taught by a bunch of egotistical academics who have never started a business.
Hell, at least that sumbitch got more for his student loan money than an english major did. Still got a motorcycle and tatoo.
Why haven't old people figured this out yet? Why go to an "assisted living" community when you go back to school? You get fed, great workout facilities, on campus security, parking, entertainment, enriching cultural experiences, and cheap housing. Plus you can run it all up on student loans and use your Social Security check as drinking money. PLUS, sell your prescription drugs to the dealer on campus.
What's there not to like?
The more I think about it, why would a flat-chested chick just get breast implants during college with student loan money? Want to improve your chances of a getting a job? Get some titties.
Gotta love the free money society until it crashes!
http://www.youtube.com/watch?v=tpAOwJvTOio
since when do banks extend unlimited credit to young adults ? something tells me that it takes two to play the student loan game; the person who accepts the loan & the idiot who made the loan. make the bankers eat it. these banks are insolvent; good riddence & don't go peddling your loans to this country's precious young adults again. when i was a kid i had to pick blueberries for ten cents a quart if i wanted any money ! we saved up to purchase what we wanted in life & earned interest on our savings. this collapse ought to be a real riot.
Its goes way beyond bloated tuition and bloated school administrations, these for-profit "institutions" and loan hucksters would sell over $100,000 in student loans to anyone who walks in the door... legions of future unemployed individuals saddled for life.
I was an all-American and defaulted on my student loan. But, you can't, so I paid it off. Fuck You to any student who wants to have it forgiven.
In my day, student loans were great. You could borrow at 8% and put it in an 18% money market fund. The arbitrage worked really well for a couple of years and then just paid it back.
Well, the approved model is to get a degree, become a banker, buy some politicians and then defraud the government of billions. He decided to skip a few steps, so now he has to pay for his sloth.
IMPENDING SELL OFF.
Longs please be careful.
Due to recent central bank intervention and short covering spikes, these daily charts are extremely overextended and significant correction expected very soon:
SPX, DOW, NASDAQ, NZDUSD, GBPUSD, AUDUSD, COPPER, CRUDE, GOLD, SILVER. [USD strength will return]
http://www.zerohedge.com/news/2012-12-24/market-analysis
http://trader618.com
newMillionDollarBonus,
An arguement consists of a premise and a conclusion. Evidence is given in support.
Please check your spelling prior to commenting, if you do not have a dictionary, revert to a spell check option.
Well, I really do not understand the US education system. It seems that there's no other place where the education is so expensive. Price for college tuition is just shocking. Today in times of bad economy most of people with average wage and living through payday advance loans just can not afford it and take out these student loans which take years to pay off. Some people pay off student loans until they get old. It's a kind of debt that will be with you for a long time. It's hard to say for sure the way these money are used, but student loans get youth in debt and make lots problems.