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Here Comes The Student Loan Bailout

Tyler Durden's picture


2012 is the year the student loan bubble finally popped. While on one hand the relentlessly rising total Federal student debt crossed $956 billion as of September 30, and was growing at a pace that will have put it over $1 trillion by the end of 2012, the one data point confirming the size, severity and ultimately bursting of this latest debt bubble was the disclosure in late November by the Fed that the percentage of 90+ day delinquent loans soared from under 9% to 11% in one quarter.

Which is why we were not surprised to learn that the Federal government has now delivered yet another bailout program: this time focusing not on banks, or homeowners who bought McMansions and decided to not pay their mortgage, but on those millions of Americans, aged 18 to 80, that are drowning in student debt - debt, incidentally, which has been used to pay for drugs, motorcycles, games, tattoos, not to mention countless iProducts. Which also means that since there is no free lunch, all that will happen is that even more Federal Debt will be tacked on to replace discharged student debt loans, up to the total $1 trillion which will promptly soar far higher as more Americans take advantage of this latest government handout. But when the US will already have $22 trillion in debt this time in four years, who really is counting? After all, "it is only fair" that the taxpayer funded "free for all" bonanza must go on.

The latest debt bailout, not surprisingly is not titled "Yet another taxpayer funded bailout for those who bought things they can't afford on credit" as that would not be very politically prudent, especially for those politicians who still have taxpaying citizens as their voters. Instead, its name is the much more PC: "Pay as You Earn Repayment Plan." Alas, it really should be called the former, because what it does is it incentivizes Americans to borrow even more Federal student loans, well aware that there will now always be a cap on the associated monthly interest payment which will never leave a mark regardless what the full underlying loan notional is. It also provides for full debt discharge should the borrowers end up with cushy Federal jobs - because the one thing the US government needs afford is more debt-saddled government workers.

What is the "Pay as You Earn Repayment Plan"? The WSJ explains:

A new federal program should make it easier for some recent college graduates to keep their student-loan payments manageable.

The new option, known as the "Pay as You Earn Repayment Plan," lets eligible borrowers sharply lower their monthly loan payments and qualify for loan forgiveness quicker than they might otherwise.

"It's a very good safety net for students who borrow too much," says Mark Kantrowitz, publisher of the financial-aid site "If your debt exceeds your annual income, you will probably benefit."


Pay as You Earn, which took effect on Dec. 21, "is designed to help offset the effects of the recession for student borrowers most likely to take a hit in this tough job market," says Lauren Asher, president of the Institute for College Access and Success, which has pushed for the creation of income-based repayment plans.

Which in the New Normal, means everyone with a student loan will benefit. It also means, that courtesy of knowing this safety net is there, more and more people will take advantage of the government's latest generosity with other taxpayer's money.

What are the terms of this new bailout?

The new program comes at a time when rising student-loan balances—amid a still shaky job market—have weighed heavily on many families.


Typically, federal student loans must be repaid within 10 years. At current interest rates, that can work out to a monthly payment of roughly $300 for a borrower with $26,000 in debt.


Pay as You Earn, by contrast, limits student-loan payments to 10% of "discretionary income" as defined by government formulas. Borrowers who make regular payments could have the remaining unpaid amounts forgiven after 20 years.

So much for student debt being non-dischargeable: borrow hundreds of thousands, but make your monthly payment of a hundred or so bucks, and in 20 years you will be debt free, courtesy of US taxpayers. Actually, scratch that: one doesn't even have to make a payment!

In some cases, borrowers with low incomes could be required to make a zero-dollar payment and would still be considered current on their loan. Monthly payments can increase or decrease each year based on the borrower's income and family size.

For those who think getting full debt forgiveness in 20 years is far too long, why there's a loophole for that too: just go "work" for Uncle Sam:

Borrowers with public-service jobs may qualify for loan forgiveness after just 10 years.

As for eligibility "constraints":

To be eligible for the program, borrowers must have taken out their first federal student loan after Sept. 30, 2007, and received at least one federal student loan after Sept. 30, 2011. Borrowers also must meet eligibility cutoffs based on the size of their debt, their discretionary income and family size.


The U.S. Department of Education's Pay As You Earn calculator, available at, can help you determine if you qualify. Borrowers can apply for the program online or by contacting the loan servicer that collects their payments on behalf of the federal government.

In other words, virtually all people who were responsible for the diagonal take off in the Federal student loan total in the current depression are now eligible for what will eventually be full debt discharge.

So let's get this straight:

  1. go to some "everyone who applies is admitted" community college
  2. take on the biggest Federal loan one can get
  3. use the proceeds for everything besides the tuition (of course)
  4. be unable to find a job after graduation (naturally)
  5. plead poverty, accusing evil employers who don't hire those who majored in Foosball, and make "zero" payments while remaining in "compliance"
  6. get a job working for the government, wait ten years, and have the entire loan magically disappear.

And there it is: incentives for the common, and very much broke, man in the New Normal.

If there is anyone out there who thinks this will not result in a "charge it" feeding frenzy and that the Federal student loan total will not go absolutely parabolic going forward, please raise your hand.

Of course, what is not discussed, is who is on the other side of all those forgiven loans. And the answer, dear taxpaying US readers, is starting at you in the mirror. Because all the Federal government will do is transfer the unfunded obligation, which has already been used to satisfy the purchase of goods and services, from one individual to the whole group.

But when one is dealing with the government of a country that is no longer even fit to be defined as "banana", what is adding one more trillion between already insolvent counterparties.

Finally, yes, this means the Fed just tacked on one more year of QE to its $1 trillion/year in US debt monetization, which also means the Fed's balance sheet will now also be used for to fund student loan forgiveness, among so many other things.

Insolvent students of the world, unite!


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Sat, 01/05/2013 - 18:00 | 3125849 Laddie
Laddie's picture

Bill Gates Millenium Scholarships
"Students are eligible to be considered for a GMS scholarship if they: • Are African American, American Indian/Alaska Native, Asian and Pacific Islander American, or Hispanic American;"

"The goal of GMS is to promote academic excellence and to provide an opportunity for outstanding minority students with significant financial need to reach their highest potential by:

Reducing financial barriers for African American, American Indian/Alaska Native, Asian Pacific Islander American and Hispanic American students with high academic and leadership promise who have significant financial need;"

Sun, 01/06/2013 - 00:17 | 3126479 Freddie
Freddie's picture

I saw crap like that when I was in grad school over 20 years ago.   I was working full time like a dog for 2.5 years carrying a full load with a 47 to 50 hour a week job.

The bulletin boards had a sign for - Engineers - full boat everything paid for grad degrees if you were black, hispanic and other minorities.  Everything paid for at many many colleges.  My state university then instituted a plan for free everything if you were African American.  I think they needed a 2.4 GPA from their high school.  

I will be tagged as a racist by a few nit wits here for complaining about institutional/govt racism.

Sat, 01/05/2013 - 16:26 | 3125595 Seasmoke
Seasmoke's picture


Sat, 01/05/2013 - 16:43 | 3125640 donsluck
donsluck's picture

You forgot INFINITY.

Sat, 01/05/2013 - 16:46 | 3125647 negative rates
negative rates's picture

Boy was it fun while it lasted.

Sun, 01/06/2013 - 00:24 | 3126503 conspicio
conspicio's picture

Yeah I been high and I been low
And I don't know where to go
I'm living on the never never never
This time it's gonna be forever
I'll live and die don't ask me why
I wanna go to paradise
And I don't need your sympathy
There's nothing in this world for me

Birth, school, work, death
Birth, school, work, death


The Godfathers, circa 1988

Sat, 01/05/2013 - 16:28 | 3125598 Hubbs
Hubbs's picture

One thing came immediately to mind. if this bailout goes through, then the cost of sending my daughter to college will explode!  It's  a  monster!

Sat, 01/05/2013 - 16:33 | 3125614 W74
W74's picture

Have her get a Plumbers/Carpenters/Electircians license instead. 

With fewer and fewer people going this route I stand to make a pretty penny overcharging fools who can't do that type of work themselves.

Welders, Auto Mechanics, and silimar jobs also rake in the bucks, 5-10x as much if you're self employed too.

Sat, 01/05/2013 - 16:44 | 3125643 donsluck
donsluck's picture


Sat, 01/05/2013 - 23:43 | 3126416 QQQBall
QQQBall's picture

W74 - with your plans to overcharge your Clients you should go into banking

Sat, 01/05/2013 - 16:28 | 3125600 gbresnahan
gbresnahan's picture

If there's ever a bounty program to round up these deadbeats I'll make some good money.

Sat, 01/05/2013 - 23:12 | 3126376 GrinandBearit
GrinandBearit's picture

Never going to happen.

Sat, 01/05/2013 - 16:29 | 3125601 GrinandBearit
GrinandBearit's picture

Take all your credit cards... rack em up... and don't even think about paying it.

It's ending very soon and no one will care about it anyway, so what the fuck.


Sat, 01/05/2013 - 17:11 | 3125723 Ropingdown
Ropingdown's picture

Perhaps you missed the key point of the story.  You are advised therein to take "their" credit card and max it out, not yours.  Only when that strategy fails to sustain an adequate iBudget for you and the iSellers should you turn to a cash-out mortgage refi-and-default and the credit card play. 

Sat, 01/05/2013 - 17:24 | 3125765 TPTB_r_TBTF
TPTB_r_TBTF's picture

It is not "ending"; rather, it is "resetting". 

See you on the other side.

You will care.

Sat, 01/05/2013 - 23:10 | 3126374 GrinandBearit
GrinandBearit's picture

The strategy works great for sheeple that don't own any major assets TPTB can take away from you.

No such thing as debtor prisons and there never will be... 80% of the people in the US would be in jail.

Sun, 01/06/2013 - 04:04 | 3126685 TPTB_r_TBTF
TPTB_r_TBTF's picture

First, what is this 80% you are refering to?  Please show your math.  Are you saying, "80% are going to follow your 'advice'?"

Call it a debtors prison or call it a FEMA Camp, whatever...

80% can equal 40%, as below:

To jail (a.k.a. FEMA Camp) 80% of the population is fairly easy actually.

Kill off 50% of the population and send 40% (of the original population) to a FEMA Camp and you have now jailed 80% of your [remaining] population.  Never say "never"!

Sun, 01/06/2013 - 12:09 | 3127001 GrinandBearit
GrinandBearit's picture

I meant 80% of the people in this county have debt coming out of their asses.  They're all going to FEMA camps huh?... keep dreaming.

Sun, 01/06/2013 - 14:16 | 3127229 TPTB_r_TBTF
TPTB_r_TBTF's picture

Keep dreaming!  You are way off with your 80%.  Show your math! Are you a liar or are you just plain stupid?

While about half of us do a pretty good job of keeping our balances down, the other half carries at least a $1000 balance, with 10% of card holders carrying in excess of $10,000 on plastic alone. Even those who carry only a few hundred bucks at a time are technically "in debt" - just an amount of it they can manage reasonably.

US sheeple debt


Sat, 01/05/2013 - 16:30 | 3125603 Getting Old Sucks
Getting Old Sucks's picture

Great news guys, I'm going back to School!!!!!

I just did that calculator thing and since no one will hire an old fart, my small pension entitle me to $0.00, read ZERO payment.  I'll enroll in the cheapest school I can find and because of my income, sure to get grants, pass the time away going to class (what else I have to do besides read ZH :-)  Borrow the max and never have to pay it back.  Probably won't be around in 10 years anyway.  Maybe I'll become a doctor and save my life!


What a fucking country!!!!!!!

Sat, 01/05/2013 - 16:37 | 3125621 Freddie
Freddie's picture

Can we all go back to schoo, take social security disability, get an ObamaPhone, Obamacare and an Obama credit card?   Hope & change.

Sat, 01/05/2013 - 16:44 | 3125644 Getting Old Sucks
Getting Old Sucks's picture

AS Obummer would say


Sat, 01/05/2013 - 17:46 | 3125817 strayaway
strayaway's picture

President Obama's plan to transform higher education:

1. "Normalize the status" of illegal aliens now working at McDonalds, landscaping, shops, and constructions sites that used to be filled by 18-21 year old students.  CHECK
2. Nationalize the student loan industry. CHECK
3. Offer and encourage low interest rate student loans of students who can't find jobs. CHECK 
4. Disrupt supply and demand so the surplus of college students causes college costs to skyrocket. CHECK
5. Encourge states to subsidize illegal immigration with the Dream Act and by catagorizing illegal aliens as in-state students thus creating additional supply to further drive up college prices. CHECK 
6. Discover that not enough young Americans know skilled trades. CHECK
7. Have taxpayers pay off student loans because there are no jobs for anyone majoring in curriculums ending in (blank) "studies". CHECK
8. Borrow from China, the Fed, or wherever to transfer resulting debt to unborn children. CHECK
9. Get reelected by a dependency coalition including students and former students who cant find jobs. CHECK 


Sat, 01/05/2013 - 19:23 | 3125993's picture



Back To School - Trailer

Sat, 01/05/2013 - 16:31 | 3125606 W74
W74's picture

And here I had to fight two wars to "earn" my tuition.  Fo' shame America, fo' shame.

Sat, 01/05/2013 - 16:37 | 3125628 Getting Old Sucks
Getting Old Sucks's picture

Thanks for you service.

Sat, 01/05/2013 - 16:44 | 3125641 W74
W74's picture

I was glad to do it at the time giving back to the land of my birth that blessed me so much and yada yada, but fuck, what has my country turned into?

I'm 26 and it is NOT the same country that I grew up in, quite far from it.  I truly believed the notions of getting by on one's merit, liberty, fairness, property rights, and the rule of law.  But do we have any of that anymore?

Sat, 01/05/2013 - 16:51 | 3125658 Getting Old Sucks
Getting Old Sucks's picture

It was a lot easier for me as when I came home, the law was that my employer had to hire me back with retroactive raises and seniority.  I wish you well friend.

Sat, 01/05/2013 - 17:07 | 3125701 Cathartes Aura
Cathartes Aura's picture

if you're 26 then this was never the country you believed you grew up in.  all your learned beliefs were part of a huge myth to get you to "serve" the "nation" that believes it owns you.

does it own you?  who/what do you serve?  and what do you believe you're entitled to?

Sat, 01/05/2013 - 17:31 | 3125781 TPTB_r_TBTF
TPTB_r_TBTF's picture

Anyone aged 26 who fought any wars didnT do it for their country, they did it for TPTB.  Either you were securing oil fields or poppy fields. You said you fought in "two wars".  Seems you fought for both oil and poppy fields.

Sat, 01/05/2013 - 18:27 | 3125891 Getting Old Sucks
Getting Old Sucks's picture

Back in my day, although I enlisted, there was a draft.  Draft dodgers left the country to avoid prosecution.  Yes there was an amnesty many years later. 

My point is that those who volunteer today take the places of those who would be forced via the Selective Service system to serve and fight the wars started by TPTB.

I suffered the same mockery when I came home that a few here dish out to those who served voluntarally.

Just keep in mind that he very may well had taken your place.  He, like I thought we were doing it for our country.  Maybe we were wrong but our intentions were genuine.

I believe that the Selective Service will be instituted again in the not so far off time.  Little known was that they had a directive during the 2010 census to locate all men of draft age (that info has since been purged off the net).

Criticizing a war veteran for serving in war for his country, is not nice.

Sat, 01/05/2013 - 19:22 | 3125991 Cathartes Aura
Cathartes Aura's picture

@ Getting Old Sucks,

Criticizing a war veteran for serving in war for his country, is not nice.

pointing out that volunteering to fight on behalf of the corporations that run this nationstate, in the hopes that fewer will volunteer to perpetuate the system that holds many by the short 'n' curlies

is a way to sanity.  it's telling the truth, in the hope that fewer swallow the lies.

and "saluting" those who feel entitled to disparage the list of "others" in some peoples posts is "not nice" either. . .

Sat, 01/05/2013 - 19:51 | 3126042 Getting Old Sucks
Getting Old Sucks's picture

I understand your point.  However, I assure you that perhaps in the very near future as patriotism deminishes, TPTB will force young men to fight.  Yes, there will be those who will resist.  Some will flee.  Not sure if Canada will harbor them like they did in the 60's though.  War is not going to end.  TPTB have waged war for profit since the American Revolution.  Which BTW our "Founders" were part of.  They will conscript and the majority of men will comply.  LOL, the bulk of resistanc in today's society will come from the mothers of those drafted.  Can't wait to see that debacle.

My point is that any man who served their country, especially in combat, you have to be there to understand how it really is or was, shouldn't be chastised for going when he thought he was doing the right thing for his country. 

"perhaps fewer swallow the lies".  Who's reading this?  We, the members of ZH.  Not the soldier aged population of the U.S.  I've been though it all and to be perfectly honest, I said I lost my patriotism in Viet Nam.  But I will thank and stand up for any man who served and was jeopardizing his life for his country.  Even if we now know it was for TPTB.

Sat, 01/05/2013 - 20:00 | 3126062 Getting Old Sucks
Getting Old Sucks's picture

OK, I filled the thread, LOL, enough from me.  Night guys.

Sat, 01/05/2013 - 20:25 | 3126109 Cathartes Aura
Cathartes Aura's picture

and I understand your point as well, but,

My point is that any man who served their country, especially in combat, you have to be there to understand how it really is or was, shouldn't be chastised for going when he thought he was doing the right thing for his country.

we all need to stop endlessly parroting the words "served their country" when this in fact is not truth, and continues to snag young people, men AND women, into volunteering to serve the corporate entities that own this "space" - if we here at ZH can't even get that notion right, why expect anyone else will?

it's not enough to parrot "End the FED!!" as if the financial system is the only thing sucking people dry - there are other avenues to explore in "waking up" to where you are, incremental realisations are important, else it just becomes bitterness and anger all round.

and again, no disrespect intended, I'd just like to see fewer people volunteering, more critical thinking applied.

Sat, 01/05/2013 - 19:16 | 3125978 laboratorymike
laboratorymike's picture

Thanks for your service.


I'm 27. I feel you. I still remember getting off the plane from a missions trip to Venezuela in 1998 and saying "I am so glad I live in a free country!" Going there was the first and only time I was thrown in a room and interrogated, and it was the first time I saw a country run roughshod by corrupt governments. But now, we're not as free as we used to be. I hope our generation can get it back.

Sat, 01/05/2013 - 20:07 | 3126073 Everybodys All ...
Everybodys All American's picture

From my perspective the country has gone off the rails ever since 911. The out of control federal spending can be brought under control but we have to do without a lot of these handouts, TSA, etc. and people these days are simply not willing. Politicians like Obama play off of this non stop.

I'm also quite a bit older but none the less feel the same way you do, but I'm shocked at the number of people who actually think otherwise. They will be ill prepared for the oncoming economic collapse.

Sat, 01/05/2013 - 16:32 | 3125609 acidradio
acidradio's picture

As a younger man I got duped into getting "a degree" by my parents, by the educational establishment, by everyone surrounding me, it was the "right thing to do to get ahead". Everyone else did it and it seemed to work for them (supposedly). It wasn't like I was a grown adult when I was duped into this - I was a kid!

I got into school and instead of learning anything I can use to perform a meaningful job I listened to overly-liberal job-for-life tenured state-paid professors use their classrooms as pulpits of the liberal left. I mean these people sound like what I picture an imam in the back hills of Afghanistan sounding like but different political philosophies. The college squandered all of my tuition money on unnecessary liberal programs ("Social research laboratory" in the ghetto? Endless "administrators" who don't do anything useful but make six-figure salaries? A new stadium for a bunch of mongoloids on scholarships who play football... and never seem to win a fucking game?  Student organizations that I don't care about or even agree with and I have to pay for them to exist?) I played their game of bullshit and got a piece of paper to hang on the wall. Yay! Everything will be great now and I won't have to work at some gross or greasy job anymore, right? Wrong.

Every job I've had since college has gotten progressively worse and pays less than where I started. Ironically if I would have stayed in the stupid menial job I had during college and which doesn't require a college degree I would make more money than I am now, have benefits and some sort of job security. All of these wonderful careers - where are they?

I wish I could just mail the thing back and say "leave me alone, tear up my bill, I never want to see you people again". What a waste. Ironically I keep getting calls asking for alumni money.

Sat, 01/05/2013 - 16:41 | 3125634 W74
W74's picture

I'm in my last semester and I stand a reasonable chance of being employed once I'm done (50/50 on Private vs Public sector though).  However, I'm considering using what's left of my GI Bill to go get licences in Carpentry, Plumbing and Electrical. 


With all three I can basically do contract work on every part of the house and make some bucks.  Unfortunately I'm sure by the time I'm a decade into my career taxes will be so high to pay for the Shoniquas and Henrietta Rosa-Maria Gonzallez'es of the world popping out endless kids that my standard of living will be about the same as their anyway.


Where can I move to with my job skills though?  Iran?  Argentina? Kazakhstan?  All sound like far more reasonable places than America in it's nottoodistant socialist future.

Sat, 01/05/2013 - 17:13 | 3125733 Cathartes Aura
Cathartes Aura's picture

and none of anyone's "taxes" are paying for your life right now?  they don't fund the MIC that promised you benefits?  and all who serve it?

finger pointing at the obvious is popular here, critical thinking rather less so. . .

I don't begrudge you your decisions or benefits, but you might want to wake up to who lives in your mind, creating and perpetuating hate, because it works in their favour.

Sat, 01/05/2013 - 18:35 | 3125903 nmewn
nmewn's picture

Fear not comrade W74...learn those three trades and you can use them in service of the Fadderland! Your brothers & sisters wasting away in government housing projects need your labor & assistance!


Sat, 01/05/2013 - 19:26 | 3126001 laboratorymike
laboratorymike's picture

If you want a list fo places to go to, check out . There are nine countries ranked as more free than ours.

Of course, if you can play your cards right there are other places too. One thing I learned visiting my in-laws in China was that shopping malls and iGadgets can be found anywhere, and the real questions are whether or not you can get along with the people, and how much of a hassle the local government and taxes are. I've known a few guys online who have had pretty good luck in Mexico, the Philippines, and Namibia. There are men who have figured out how to carve out a life outside of the USA, maybe it's time for more John Galts to found a new gulch.

Sat, 01/05/2013 - 20:00 | 3126061 geekgrrl
geekgrrl's picture

It sounds like you're way ahead of your peers, congrats.

If I was starting out today, I would definitely get into the trades and skip college. I'm surprised more young folks don't take this path. Plumbing and electrical especially. There's still opportunity to have an independent biz, and be able to make a decent living. (I may not be completely objective here as my father is a Jack of all Trades, and I picked up a lot of stuff growing up. Someone without this background might have a harder time and not see it as a viable path to economic independence)

If James Kunstler and James Michael Greer are correct about the not-too-distant-future, college degrees may very well approach the value of the diploma paper. But regardless of what happens economically, people will still want their toilets to work and their lights to come on. When the toilets stop working and the lights go out, making a living will be the least of our worries.

Sat, 01/05/2013 - 16:42 | 3125638 Freddie
Freddie's picture

This really makes me sick and sad.  This sh*t is child abuse.  Yeah and it is largely on the left. 

I saw this all coming down when I was playing golf by myself one day on a cheap muni course which I have since cut out.  I saw that O and his NWO gang were taking down all the banks in 2008.  Shorting the s*it out of one bank after another to take em all down.  I knew it was the beginning of the end.

The leftist university with unionized marxist teachers was all the Pivard Clowen whatever stuff.  Take the whole system down.  Well they are almost there in destroying the system.  The last step is to disarm us.  It "ain't" gonna happen.

Sat, 01/05/2013 - 17:06 | 3125699 donsluck
donsluck's picture

Didn't the banks take themselves down, with Bush and O to the rescue? Are you saying O and the NWO shorted the banks?

Sat, 01/05/2013 - 17:28 | 3125773 Freddie
Freddie's picture

The timing was a bit suspicious. McCain was a RINO setup lackey.   If you go back and look - the banks et al were hammered in the credit default swap market.  They lined em up like fish in a barrel to shoot.

Bush and McCain had no clue what was going on or they just played dumb.   McCain's campaign manager was a Democrat and he said the Republicans complaints of voter fraud were nonsense. 

You cannot tell me the banks are in any better shape today.


Sat, 01/05/2013 - 17:43 | 3125818 knukles
knukles's picture

Hell yeah!
Who the fuck shorted all the airline stocks about 2 or 3 days before 911?
Wasn't the shoe shine boy, fer fucks sake.
And where did all the gold go that was vaulted under the towers?
Wasn't the shoe shine boy who waltzed off with it.

Of course it was TPTBMWO or whatever the fuck you wanna call 'em.

Jesus people!!!!!!!!!!!!!!!!!!!!!!

Open your fucking eyes!

There is nothing "kinda suspicious" about the timing of all this shit over and over again.

Sat, 01/05/2013 - 18:19 | 3125883 lakecity55
lakecity55's picture


Sat, 01/05/2013 - 19:28 | 3126005 Esso
Esso's picture

I'll raise you another +1000.

Even a dog is smart enough to make the determination between being stumbled over or being kicked.

Sun, 01/06/2013 - 10:35 | 3126876 francis_sawyer
francis_sawyer's picture

Well ~ Everytime I even jokingly mention that there could be heebs that have their fingerprints on anything I get junked... So it COULDN'T POSSIBLY have anything to do with them... & thus, now that we've narrowed down the search (by eliminating that faction), I feel we're finally getting somewhere... A debt of gratitude should be given to all those junkers who help us all to arrive at the truth...

Sat, 01/05/2013 - 23:54 | 3126443 Dr. Sandi
Dr. Sandi's picture

Zippy, you're disbelieving the wrong part of the lie.

The missing gold was never there to start with. That made it much easier to steal later. Or steal earlier, if you get my drift.

Sun, 01/06/2013 - 00:27 | 3126508 Freddie
Freddie's picture

Wasn't the CIA running some database or the options and futures skyrocketed?  I think they were overseas accounts - maybe London.  That all went silent very quickly.  Picked up by Eschelon or something?

Then not long after that, (Dr.) John Pointdexter who ran the CIA under Bush 1 (?? bad memory).  He said we should have a futures marekt to try to predict terorist events in advance.  This all came up because of the market activity pre 9-11.  He was attacked for the idea and it quickly went away.

There was supposedly a shit load of gold under the towers.  Some said more than the NY Federal Reserve aka The House of Bernank.

Sat, 01/05/2013 - 16:32 | 3125610 dmger14
dmger14's picture

Fuck this country!  We deserve to collapse!

Sat, 01/05/2013 - 17:01 | 3125691 busted by the b...
busted by the bailout's picture

Perhaps.  But I don't blame the kids, or the people in general.  It's the system; it has become rotten to the core. 

We are in for more hard times in the years ahead, and as adversity builds character, hopefully it will also "rebuild" our system.  We have lost the values that made this country great, and it won't change until we get them back, imo.

Sat, 01/05/2013 - 17:16 | 3125740 Cathartes Aura
Cathartes Aura's picture

upvoted for acknowledging it IS the system that most duck 'n' dive in, and until more people realise the system is in place to suck them all dry, then discard, then the system will continue to perpetuate itself.

Sat, 01/05/2013 - 16:36 | 3125622 Salon
Salon's picture

Wow even if somebody makes $100,000 per year their max payments over 20 years is $200,000 (less actually since it is ten percent of discretionary income).

Max out the loans baby! Go $400,000 in debt at the most expensive undergrad and grad programs you can find.

Sat, 01/05/2013 - 23:57 | 3126451 Dr. Sandi
Dr. Sandi's picture

I tire of merely being a PhD. I can't help but think I should go for that MD paper I've always coveted. Get a monster student loan and convert it to gold.

Anybody know a really fine medical school that will let me have the loan money first, before I send them a check?

Sat, 01/05/2013 - 16:46 | 3125642 TWSceptic
TWSceptic's picture

"It's a very good safety net for students who borrow too much," says Mark Kantrowitz"


You can't make this shit up, you really can't.

Sat, 01/05/2013 - 16:49 | 3125654 acidradio
acidradio's picture

To be honest I think *ANY* amount is too much to borrow! Everyone in my parents' generation and before was able to go to school for a reasonable CASH price. They all worked hard at some kind of summer job and perhaps with a little help from their family was able to go to school without taking out loans. Now? I could buy a house for the amount of money that it takes, it's basically impossible without going into debt. Schools back in the day were about school. Between tuition money, some state funding, donations from successful alumni (you kind of had a social obligation to donate to your alma mater if you made money) and good management and cost controls this was all possible. And now? It's just a fluff job program and propaganda machine for ultra-liberals who can't cut it anywhere else in the real world.

Sat, 01/05/2013 - 17:12 | 3125731 Getting Old Sucks
Getting Old Sucks's picture

Catholic grade school in the fifties to sixties: $15 every six months.  Catholic HS in the sixties: $20 a month.  Community College in the sixties and seventies: Free.

Not going to go over what it cost to educate my four children but we're still in the one bedroom apartment we raised them in (no house for us).  They did and are doing well though so wouldn't change it for the world.

Pisses me off that if you're an illegal's kid, you'll go to school now for free and if you're a natural born citizen, you either fight a couple of wars or go into to debt for life to go to school.

We have to back, not FORWARD.

Sat, 01/05/2013 - 18:08 | 3125863 Laddie
Laddie's picture

The “Hispanic Scholarship Fund” (HSF) says that it “aims to put a degree in every Latino household by 2025” through its affirmative action program in college recruitment.

Funding for the HSF comes from a large number of corporations, which, according to that organization’s website, include the FedEx Corporation; the Mazda Foundation; KLASS Time; GMAC Financial Services; Lowe’s; the McNamara Family Foundation, Inc.; Goldman Sachs; Procter & Gamble; Toyota Motor Sales U.S.A., Inc.; the Verizon Foundation; McDonald’s; Target; the Morgan Stanley Foundation; Nissan North America, Inc.; the Sallie Mae Fund; Wells Fargo; the Draper Family Foundation; the Shell Oil Company; the Wachovia Foundation and the UPS Foundation, amongst many others.

The HSF says specifically that it is only for “Latinos” and those of Hispanic descent.

It obviously does not concern these corporations in the slightest that their money is used specifically for non-whites.

On the HSF’s website, under their “Frequently Asked Questions” section, the policy is spelled out in no uncertain terms:

“Do I have to be Hispanic/Latino to apply?” is the question the website asks.
The answer is: “Yes. You or your family must be descended from at least one of the following countries: Spain, Mexico, Guatemala, Honduras, El Salvador, Costa Rica, Nicaragua, Panama, Colombia, Venezuela, Ecuador, Peru, Argentina, Chile, Bolivia, Uruguay, Paraguay, Cuba, Puerto Rico, or the Dominican Republic. Students from Brazil are eligible to apply.

Sat, 01/05/2013 - 18:56 | 3125938 Oleander
Oleander's picture

From here on my child is Latino. He really is a desendant but now he will need to claim it. 

Sat, 01/05/2013 - 23:46 | 3126424 Jam Akin
Jam Akin's picture

What's this about non-whites?  All of the decendents of the folks who had to leave Germany "suddenly" back in the mid-40's for various destinations in South America would appear to be eligible.  And the Italians from Brazil and Argentina too?  And for Asians, Toyota should be covering any Japanese who did a generational tour of Peru and Brazil?  Sweet Deal.  At least private money is picking up the tab even if their selection criteria are ever so slightly fucked up.

Sat, 01/05/2013 - 23:48 | 3126432 lakecity55
lakecity55's picture

No, no, no. The Media says Hispanics are White: "George Zimmerman, the White Hispanic who shot Treybon Skittles..."

Sat, 01/05/2013 - 16:50 | 3125656 W74
W74's picture

It's this kind of transference from Responsible Actor to Victim which is at the heart of the left's ability to function.  Once you point out the flaw on their argument using this they have nothing to stand on, logically. 

Too bad we no longer follow or even care about logic anymore and if you disagree you must be a crazy/psychopath/racist/nazi/criminal/evil-dooer who needs to have their guns taken away and be locked (forcably) in a mental institution.

Sat, 01/05/2013 - 17:09 | 3125712 donsluck
donsluck's picture

How is "Actor to Victim" leftist? Doesn't the right encourage this behaviour with it's bail outs of huge corporations?

Sat, 01/05/2013 - 16:46 | 3125649 uno
uno's picture

ok who is up for spring break in cancun

Sat, 01/05/2013 - 17:17 | 3125743 knukles
knukles's picture

There's an app and a grant for that!

Sat, 01/05/2013 - 16:47 | 3125651 Conax
Conax's picture

For all of us who didn't get to college because we didn't have the wherewithal to go (in the dark days before everything was EZ credit and grants), I hope they remember their lowly employees put them through college and maybe pay them a fair rate.  Or at least their credit score should be hamstrung.

A lot of those college loan dollars go right up the noses of the college-bound.  I'm sorry for the job situation, but it didn't happen overnight. The hand writing has been on the wall since 2007.

Sat, 01/05/2013 - 17:10 | 3125719 bigkahuna
bigkahuna's picture

As long as I can remember, the job situation has been bad, with the exception of the few years of the tech boom - that is. It is just going to get much much worse, thats all. 

To all the new liberal arts grads: Basket weavers, sociology, history, english, you name the bullshit wasted your time, your (err the taxpayer's) money, and unfortunately and likely your life unless you have the fortitude to go back and get an engineering or medical related degree OR get skilled in something RELEVANT!

Sat, 01/05/2013 - 20:29 | 3125825 BlueCheeseBandit
BlueCheeseBandit's picture

Yeah, engineering is where it's at.

My friend got a Masters in engineering from U of M, got his undergrad there Summa cum Laude. That was a year and a half ago.

Liberal arts degrees are very lucrative, for the connected or the clever.

And we'll see how your medical degrees work out in a few years. Education, healthcare, and defense all exist in their current form because of gov largesse. When you think about it, a society in which everyone takes care of everyone else when they're sick doesn't make as much sense as it sounds. Reminds me of the idea 10 or 20 years ago that we would all be lawyers. How did that work out?

Sat, 01/05/2013 - 16:49 | 3125652 mendigo
mendigo's picture

Had this actually been a bailout of students they would have simply forgiven the debt or limit the cost and time frame.
This appears to be an effort to keep the game going - otherwise the lenders and schools might take a hit.
As with Greece it is instructive to consider who is actually benefiting from maintaing the status quo.
And to think that some talk about the 47% who are seeking handhouts - it is the 1% that receive the serious money. Does any sentient being actually pay at a rate of 37% will that not be easily evaded with proper avoidance techniques. The only tax increase was on the 99.5%

Sun, 01/06/2013 - 09:41 | 3126817 tip e. canoe
tip e. canoe's picture

"This appears to be an effort to keep the game going - otherwise the lenders and schools might take a hit."

at least someone here can see this for what it is.    the zero payment was the tell.   gotta keep the young'uns on the monthly payment treadmill, even they pay "nothing".   can't have them be throwin their bills in the trash, credit score be damned, can we?    this is indoctrination at its increasingly desperate.

p.s. these 2 minute of hate posts are really getting boring, especially when they're filled with such lazy analysis and obviously written to whip up a frenzy.    you guys & gals are getting as blatant as those you claim are the source of all the problems.    apologies for the criticism in your house, but sometimes shit needs to be said.

Sat, 01/05/2013 - 16:50 | 3125657 busted by the b...
busted by the bailout's picture

I finished both undergraduate and graduate school without any debt.  I worked my way through, but then I didn't go to a private school either.  I think this is still doable, but not many choose this route because it's not fun.

I've been a sucker most of my life too: never incurring debt, except for a mortage, never taking a second or a home equity loan.  I even operated a business for 20 years without any debt.

Saving used to be a virtue, now it just makes you a fool.

Sat, 01/05/2013 - 16:57 | 3125678 Getting Old Sucks
Getting Old Sucks's picture

You're no fool. 

Sat, 01/05/2013 - 17:05 | 3125696 busted by the b...
busted by the bailout's picture

Thank you, and I salute you, kind sir.

Sat, 01/05/2013 - 19:46 | 3126035's picture

Neither a borrower nor a lender be. High class stuff.

Sat, 01/05/2013 - 23:44 | 3126400 lakecity55
lakecity55's picture


I never applied for any loans. I worked 30 hours a week and got some tuition help from the old man.

Of course, I had a job when I got out and no debt. All I owned could be put in the back of my paid-for PU truck.

You guys are sayin' I could have scammed the system and got rich?

I never thought of that. A buddy in law school turned me on to Libertarians, so my guys never win, either.

I did get a nice rifle when my lawyer buddy got busted by the IRS and defrocked for a plan to escape income tax.

But, the rifle was stolen.

Once upon a time, I was told I qualified for Army Intelligence, which I figured was teaching other soldiers to increase their test scores. Screwed again. Those recrutiers will say anything. I just told my (youngest) son-in-law that story, but he thinks the Navy Recruiter has a jet fighter slot waiting for him. Let's just say I know he is not fighter jock material. (*sigh*) We all have our own learning curve....

Sat, 01/05/2013 - 16:55 | 3125669 Quinvarius
Quinvarius's picture

I just did the calculator they offered.  If you have 100k in loans, are single, and make 40k a year, you will pay back a grand total of$46,560 over 20 years.  Your payments will not even be half the principal.

Sat, 01/05/2013 - 17:22 | 3125761 Cathartes Aura
Cathartes Aura's picture

out of your calculations,

pay back a grand total of$46,560 over 20 years

that's the only real earned "money" involved, the rest is magic pixels balancing phoney books, yes?

Sat, 01/05/2013 - 19:48 | 3126038's picture

But who has to work to earn the additional magic pixels to pay off the loan?

Sat, 01/05/2013 - 20:19 | 3126100 nmewn
nmewn's picture

I'm still trying to figure out why I'm taxed instead of having a few more magic pixels take care of it.

Not actually, I know why...and I'm not amused by their attempt at control.

Sun, 01/06/2013 - 09:43 | 3126819 tip e. canoe
tip e. canoe's picture

and how much of that is compound interest?

Sun, 01/06/2013 - 13:06 | 3127112 Catullus
Catullus's picture

At 7%, that's 10% of the FV of the loan.  Which the government is sure to pay the banks the other 90%.

Sat, 01/05/2013 - 16:55 | 3125670 q99x2
q99x2's picture

That's what I'm talking about. Partyeeee!

Sat, 01/05/2013 - 17:11 | 3125675 centerline
centerline's picture

This is pure evil.  They are buying time regarding the rising defaults and at the same time increasing the potential for even more borrowing.  University costs and loans are about to go into the stratosphere.

The message there is desperation.  They really are between a rock and a hard place.  Credit creation at any cost.  Damn.  If did not know better, I'd say they are lighting the fuse on a blow off top.

There is even more in the message.  For one, I read this as "fuck you private sector" loud and clear.  But, funny thing is that the "public" promises sure smell like roach motel bait.  I suppose if you get it while it is good and put the earnings towards good use, then so be it.  Most people won't though.  They will drink the cool aid and actually be surprised when the party ends abruptly.

Also, look at the timetable... 10 years.  That ought to say we have far less left on the clock.

Sat, 01/05/2013 - 16:59 | 3125676 defender
defender's picture

An interesting thing to consider is that the people that started college when the job market started to collapse in 2008 are just now getting to the point that they would have to make their first payments*.  I am sure that there couldn't possibly be a link between those two point /sarc.

*For those that don't know, the first payment on student loans come due 6 months after graduating.  This means that the latest round of non-payment comes from those that graduated in the fall semester of last year.

Sat, 01/05/2013 - 17:41 | 3125810 BlueCheeseBandit
BlueCheeseBandit's picture

And you can defer payments for 3 years after that if you're unemployed.

So, yeah, this shit just got started.

Sat, 01/05/2013 - 16:57 | 3125677 hannah
hannah's picture

"90+ day delinquent loans soared from under 9% to 11% in one quarter."


the 11% number is incorrect...go back and do the math and research and take a look at the data. this is old news....

Sat, 01/05/2013 - 16:58 | 3125680 Money Squid
Money Squid's picture

So, what's wrong with drugs, motorcyles and tattoos? America has become a bunch of pussies.

Sat, 01/05/2013 - 17:03 | 3125693 bigkahuna
bigkahuna's picture

Its all good when its on other peoples bank accounts.

Sat, 01/05/2013 - 16:58 | 3125681 LiquidityandLunacy
LiquidityandLunacy's picture

Fuck it. Just discharge it all 


Sat, 01/05/2013 - 17:40 | 3125799 BlueCheeseBandit
BlueCheeseBandit's picture

All existing loans should be discharged and future loans by government stopped. Immunity from bankruptcy nullification should cease. Student loans should be treated like anything else. Go convince someone to lend you the money if you can.

Then lets see how long the education cartel lasts.

Sat, 01/05/2013 - 16:59 | 3125683 Waterfallsparkles
Waterfallsparkles's picture

Just another Bank Bail Out.  It appears that the Banks are not being repaid for the Student loans.  I would guess that the Bank cannot collect on unemployed Students or people flipping burgers at Mc Donalds.

Sat, 01/05/2013 - 17:00 | 3125686 Freddie
Freddie's picture


Sat, 01/05/2013 - 17:06 | 3125703 centerline
centerline's picture

It's more than that.  It is a shot of nitro to the credit creation machine.

Sat, 01/05/2013 - 17:00 | 3125684 Freddie
Freddie's picture

It is funny, during the Bush years I sort of felt sorry for guys in the gun business or gunsmiths.  They were in a low margin business filled with customers who had no money and wanted to get the lowest price on any gun. 

Please note: I am not a big gun guy and don't hang out at shooting ranges.  Guns are like insurance to me.  They are hopefully tyranny insurance. I just hope the insurance works.

We will never be free but it can and probably will get a lot worse.  Yeah we could get to the Pol Pot stage.  Anything is possible espcially when the media, TV and Hollywood lie 24x7 and the sheep believe their shit.

Boy did the worm turn for the gun business guys.   Now I sit on my email waiting for an email that some ammo or mags are back in stock.  At 12:41 pm I got an email that Wolf .223 was back in stock at an online retailer.  I just clicked on the link and they are sold out again.  LOL!

Man I wish I had made a deal with the local small gun range and store a few years ago.   If I had offered to do a web business with them and split it 50/50 - life would be good.

Hope & Change.   After 4 years of this sh*t - the paranoia and fear is off the charts and going higher.

Sat, 01/05/2013 - 17:00 | 3125687 bigkahuna
bigkahuna's picture

I want millions for my new student loan.

Sat, 01/05/2013 - 17:08 | 3125708 CelticCanuck
CelticCanuck's picture

For those of us here over the age of ......say..... 40, I want propose that we just step back and try to comprehend that a year at one of our illustrious liberal arts institutions will set us back $60k.
THAT alone says everything that needs to be said about the direction in which our country is heading.
Absolutely FUCKED

Sat, 01/05/2013 - 17:36 | 3125790 BlueCheeseBandit
BlueCheeseBandit's picture

W/o the special status afforded to student loans, private banks would evaluate loan candidates based on likelihood of repayment. I think tuition would be a lot lower if it had anything to do with the value of a degree. This student loan scam is just a way for the government to fund money to the education cartel through the hapless students.

Sun, 01/06/2013 - 10:07 | 3126844 tip e. canoe
tip e. canoe's picture

yup, and don't forget the education cartel in turn funding the construction, contractor & RE developer goons.    not to mention the textbook cartel.

the circle jerk continues...

Sat, 01/05/2013 - 17:09 | 3125716 Dr. No
Dr. No's picture

Which also means that since there is no free lunch, all that will happen is that even more Federal Debt will be tacked on to replace discharged student debt loans



Sat, 01/05/2013 - 17:12 | 3125730 jal
jal's picture


A smart student, if there is one, would max out on student loans, grants, and any other source of cash flow.


Live cheap.

Use the seely bank.


Start your own black market venture.

Hide the cash flow/profit.

Repay zero back on your loans.

Eventually, Become the new millionaire capable of being free.

Sat, 01/05/2013 - 17:30 | 3125778 BlueCheeseBandit
BlueCheeseBandit's picture

This is more lax, but not fundamentally different from the already in place Income Contingent are payment plan, which charges 20% of disposable income and is forgiven after 25 years.

The temporal cutoff irks me, I got my first loan 6 months too early.

This arbitrary bifurcation is going to piss ppl off. After all, ppl going into college at this point have enough information to know the risks. Ppl who started in the mid-2010s still had reason to believe in the system.

But then the purpose of the new plan isn't to help the average Joe, it's to keep ppl enrolling in college for the benefit of the education cartel.

Sat, 01/05/2013 - 17:31 | 3125779 Rustysilver
Rustysilver's picture

Why can everybody follow Mitt's recommendation: borrow from your parents. It's so easy.

Sat, 01/05/2013 - 18:55 | 3125936 TruthBeforeAll
TruthBeforeAll's picture

Um, they are. But the government has to get it's cut first.

Sun, 01/06/2013 - 10:24 | 3126872 Dr. No
Dr. No's picture

I guess thats better than what is happening now, they are borrowing from their kids!

Sat, 01/05/2013 - 17:33 | 3125784 Smuckers
Smuckers's picture

When I graduated, I was accountable to pay back my loans. 
It was a moral responsibility to do so, and yes, I even blew some of the loans on whatever was iShit at the time.

You want the degree, then pay for it. 
Fuck you, get to work...and take those fucking earphones out of your head while you do it.


Sat, 01/05/2013 - 18:08 | 3125862 BlueCheeseBandit
BlueCheeseBandit's picture

Did you graduate in the 1930s?

Sat, 01/05/2013 - 17:33 | 3125786 jbvtme
jbvtme's picture

the role of colleges and professors is to indoctrinate students in the ways of marxism and darwinism.  the fact that they all suck the public tit during the process is merely the cost of doing business for a civilized society.

Sat, 01/05/2013 - 19:27 | 3126002 Peter Pan
Peter Pan's picture

As Mark Twain once famously said, "I never let schooling get in the way of my education."

Sat, 01/05/2013 - 17:36 | 3125791 StoleYourMoney
StoleYourMoney's picture

NY ICEI shows we are currently in recession.

Sat, 01/05/2013 - 17:38 | 3125795 debtor of last ...
debtor of last resort's picture

Advantage for government 'workers' is like telling the nsa your neighbour still has an assault rifle or silver burried in the yard. A rather dangerous aspect in this bailout, this worries me the most. Loyalty..... Kind of weird to see the 'land of the free' turning into some fascist commie state. It's going fast, just like over here in the Netherlands, a forced joint venture in a larger bureaucratic environment. To control the masses at the end of the debt super cycle?

To be honest, it freaks me out, control in almost every aspect of my life. Keep up your guns and your spirit Amerikano's!

Sat, 01/05/2013 - 17:40 | 3125802 sansnobel
sansnobel's picture

Sounds like its time to take out as many lines of "credit" as I can.  Give all of my personal posessions to my father and mother that I PAID FOR so they may not be pillaged, rack up as much debt as I can then sit back and tell Mr. Banker to go get made whole by the federal government.  I will no longer work on anyone's "payroll" anymore.  They will not steal another dime from me.  Yes I will be poor, but I'm sure they will have a SNAP card for me and a student loan package in no time flat.  I'm just going to gleefully join in the moral hazzard.  It pays to steal nowadays.  In a fucked up world of moral relativisim there can be no more sin.  Just suckers that go to work like slaves to pay for the large living ways of others who sit on their fucking ass 24/7.  Thank you very much slaves!!!!!

Sat, 01/05/2013 - 17:41 | 3125813 QQQBall
QQQBall's picture

Pay people not to grow food.

Pay people not to work. Then pay for their medical fees and feed (SNAP) them.  

Forgive mortgage debt.

Forgive student loan debt.

Backstop the automotive, real estate, insurance and banking industries - & fund the Military-Industrial Complex.

Drive stduents to and from school.

Provide breakfast and lunch at school

Provide after-school and pre-school  

Did I miss anything?

 Where is my bailout?

Sat, 01/05/2013 - 18:07 | 3125859 negative rates
negative rates's picture

Was that car 54, or perhaps channel 54 you were  missing?

Sun, 01/06/2013 - 10:40 | 3126878 francis_sawyer
francis_sawyer's picture

@QQQ ~ joobux have magical properties...

Sun, 01/06/2013 - 14:55 | 3127328 logically possible
logically possible's picture


I see job creation for another 30 years in your list.

Sat, 01/05/2013 - 18:02 | 3125851 icanhasbailout
icanhasbailout's picture

Let's be honest here - students are largely brainwashed into taking out these loans, they are heavily conditioned in prison schools and by media, and then taken advantage of in a huge way from the moment their signatures can legally ink a contract. This is the market in paid-for government seeking the greatest possible fool and finding it.


The alleged "I'm taking out student loans so I can buy consumer indulgences" is an extreme rarity, if not a total myth. Most of these kids are doing only what they are coerced into doing, having no understanding whatsoever of what is going on.

Sat, 01/05/2013 - 19:17 | 3125979 Peterus
Peterus's picture

Entire culture tries to hide from responsibility. Leaders never die in war. Largest corporations and banks are the first in line for help when they make bad decisions. Entire generations are plundering their own children and grandchildren by public spending on credit.

Out of all bailouts this one is the least "evil". If anybody should get an extra chance on someone else's expense it's the kids.

Sat, 01/05/2013 - 20:02 | 3126067 Bazza McKenzie
Bazza McKenzie's picture

Agree with your main point.  However, the main plundering going on is of the savings of the middle class, through interest rate suppression, inflation and looting by the financial sector, and current expenditure of social security contributions.  That will all leave severely restricted retirement benefits for current retirees and those near retirement, ie those who have tried to lead responsible lives and not "hide from responsibility" are being asset stripped for the benefit of those who have been irresponsible.

The "debt" will continue to be financed indefinitely by the Fed, so it will not be borne by taxpayers in the distant future, though the high rates of inflation will steal from all those who produce real goods and services and most of the population will suffer the inevitable consequence of an ongoing contraction in the production and availability of real goods and services.

Sun, 01/06/2013 - 10:10 | 3126850 tip e. canoe
tip e. canoe's picture

except in this case, the "kids" are just being given a second chance to become more deeply mired in debt.

Sat, 01/05/2013 - 19:54 | 3126047 Bazza McKenzie
Bazza McKenzie's picture

Hey, they're old enough to vote on how to run the country.  They presumably have finished high school at a decent standard if they're getting into college.  But you're telling us they're not competent to run their own lives.

I'm inclined to believe that last point but it does suggest serious problems with the prior two.

Sun, 01/06/2013 - 04:21 | 3126691 Radical Marijuana
Radical Marijuana's picture

"presumably have finished high school at a decent standard"

However, never informed about how "money" is made from nothing, because the biggest gangsters, are the privatizing banksters, that have applied the principles of organize crime to take control over the government, in order to legalize counterfeiting, and force everyone else to accept that.

"Finishing high school" merely means you were already brainwashed by the "education" system that the banksters set up, in order to make sure that young people would be brainwashed to believe bullshit, and never actually understand the society that they were born into!

See the previous article on Zero Hedge:

The Banking Elite are Not Only Stealing Our Wealth,

But They Are Also Stealing Our Minds

Our children are front end loaded into a mental meat grinder! They are being processed into masses of muppets, that will vote for puppet politicians, to keep the banksters and their buddies in power.


Sat, 01/05/2013 - 18:06 | 3125856 lakecity55
lakecity55's picture

cloward-piven, comrades!

forward, soviet!

Sun, 01/06/2013 - 00:33 | 3126518 conspicio
Sat, 01/05/2013 - 18:14 | 3125872 Waterfallsparkles
Waterfallsparkles's picture

I had students that wanted to rent from me.  When I asked them where they worked they said that they would pay with the Money from their Student Loans.  Unfortunatly, the Student Loans give them enough Money for their Housing and Food expenses during their time in Collage.  Heaven forbid they live with their Parents while attending Collage.

So, many of these people with Student Loans spent the Money on Housing, Food, I Phones, etc. and now do not want to work or pay for those Loans.  They act like it was Welfare of something.

Now, all American Taxpayers will pay for their Housing, Food and College Tuition for 4 years without getting the benefit.

But, as I said the Banks are the ones on the hook right now and they want to pass the Liability on to the Tax Payers as usual.

Sat, 01/05/2013 - 19:40 | 3126016 JR
JR's picture

Exactly. This an eye opener, Waterfallsparkles, on exactly why this banker planned economy is collapsing. When the producers get their bill in 2014 for Obamacare, which according to Aetna’s CEO could double premiums on the same basic policy as today, it’s game over.

Obamacare, coupled with Studentcare, is a country sinker. It isn’t that the producers won’t pay, they can’t pay. This banker-controlled Congress can’t keep this up; this assault on the private producer is going to cut jobs, cause bankruptcies, destroy the futures of both old and young.

The Congress has passed a suicide pact -- at the same time they keep increasing the money paid out, they keep bringing on more deadbeats.

With a stroke of the pen, they've committed the country to suicide.

Sat, 01/05/2013 - 19:59 | 3126058 laboratorymike
laboratorymike's picture

It isn’t that the producers won’t pay, they can’t pay.

We have a winner! If there is one thing I learned in college, it was the Mr. X doctrine which stated the one sure solution of ending communism, and by extension all totalitarian societies: resources and resource producers are finite, state appetites are infinite, and eventually the resources run out. The system only lives to the extent that new sources of wealth can be looted, and we're fast approaching that point of not having much more wealth to loot.

Sat, 01/05/2013 - 21:02 | 3126194 JR
JR's picture

You know what, if there’s anything to add to what you have just said, I have no idea what it is.

+100! laboratorymike.

Sat, 01/05/2013 - 18:20 | 3125886 lizzy36
lizzy36's picture

This is just one example of what has happened at Universities in the last 12 years.

From the University of Chicago:

Tuition 2000 - 2001 = $24,807

Tuition 2012- 2013 =  $43,851

From 2000 - 2010 median wages declined by 7% in the USA (adjusted for inflation)

Changes for Full Professor Salary from 2000 - 2012 = +$79,300 from $118,500 in 2000 to $197,800 in 2012 (to say nothing of medical and pension benefits). 

Associate and Assistant Professors also saw their pay go up by 50% over the same time period.

Sat, 01/05/2013 - 20:59 | 3126187 JR
JR's picture

The universities are out of control. They have to have the tuition to pay the professors, even though the professors aren’t there to teach; it’s some graduate student who does the teaching.

This really piqued my interest, Lizzie. Taking it a step higher to the presidents of the public universities, I see Ohio State University President Gordon Gee came within a few thousand dollars of earning $2 million in total compensation in fiscal year 2011.  His total package a year earlier was just $1.3 million. A nice raise!

Texas A&M Chancellor Michael McKinney earned nearly as much, $1.97 million to Gee’s $1.99 million, per this latest analysis by the Chronicle of Higher Education

Said the Washington Post in May: “The annual Chronicle survey shows a rapid rise in top executive compensation in the public universities...   Governing boards are probably mindful of such milestones, just as they are mindful of being the first (or second, or third) institution to charge, say, $40,000 in private tuition.”

WP post writer Daniel de Vise added this caveat: “I should hasten to add that the top private university presidents earn significantly more than their public counterparts.

The survey of 190 public institutions and university systems found median total compensation rose 3 percent to $421,395.

As to how benefits add to the public employee's compensation package, the University of Michigan reports President Mary Sue Coleman’s base pay is $585,783 while her total compensation package is $910,700 per year.

Thanks, Lizzie. 2013 is going to be a level 9 on the economic Richter scale, no doubt with major quake damage and lots of casualties.

Sat, 01/05/2013 - 21:25 | 3126230 geekgrrl
geekgrrl's picture

The administrators are the ones raping the system. Tenured professors are also beneficiaries, but associate and adjunct profs are getting poverty-level wages and this is the trend of the future. And for all those folks who think tenured professors are by-definition liberals, I have a pile of evidence that says otherwise. Most of the engineering profs at my uni were getting massive DOD contracts and my, oh, my, did they suck on that government teat.

Sat, 01/05/2013 - 18:48 | 3125927 Peter Pan
Peter Pan's picture

Student debt is in a bubble as are education costs. Too many graduates for non-existent positions or jobs for specific degrees is also in a bubble. As the witches in Shakespeare's Macbeth said (if I remember correctly) "bubble bubble toil and trouble."


Sat, 01/05/2013 - 21:24 | 3126226 sablya
sablya's picture

Double, double toil and trouble.....Macbeth is so 17th century!  There is no more toil and trouble.  The modern Shakespeare reader has bubble, bubble, daily double, no concern, no trouble.

Sat, 01/05/2013 - 19:10 | 3125963 g3h
g3h's picture

Buy for-profit educational company stocks!

Sat, 01/05/2013 - 19:11 | 3125964 JR
JR's picture

This is not poor planning; nor ineptitude. The student loan bailout is the latest banker-created takeover of yet another segment of the free enterprise system. The international bankers are simply using the principles of usury to steal the money by creating “student loan insurance” to artificially hike the price of higher education and stick the taxpayer with the bill. This is yet another malinvestment feature of central bank planning that destroys the private market synchronization of supply and demand. 

Malinvestment is an inevitable byproduct of credit bubbles.

As Radical Marijuana pointed out in September on ZH: “The fundamental ‘malinvestment’ insanity flows from the fact that young people are enslaved by ‘loans’ which created the money they was lent out of nothing, but their promise to repay. Students are being steamrollered by the basic bankster scam!”

When will Americans all recognize that this is intentional grand larceny, i.e., the creation of financial bubbles bringing on debtors and pushing them so far under water that the politicians are obliged to clip the taxpayers for the bailout…and the bailout is more taxpayer-financed government debt to enhance the wealth of the bankers, redistributing the wealth of the nation to the non-producing “TBTFs.”

Mark Twain suggested there was no actual criminal class in America except for Congress. Had he lived, he might have recognized the more obvious criminal class, the international bankers.

Sun, 01/06/2013 - 04:23 | 3126687 Radical Marijuana
Radical Marijuana's picture

Thanks for the quote, JR! If I knew I was going to be quoted, maybe I would have proofread my grammar better, and corrected "was" to "were" because "loans" is plural?

I regard the student loan issue as being very SYMBOLIC of all the banksters' control. As Griffen said, the river of fiat money made out of nothing is so wide, it looks like an ocean. A $trillion in student loans is relatively trivial, inside the context of the bigger fiat money story. However, enslaving young people by "loaning" them "money" made out of nothing is EVIL! That kind of corruption is effectively our so-called civilization cannibalizing its young. For decades I have been repeating the truism that the younger you are, then the more you are being lied to, cheated, and robbed by the political system you were born into.

Sat, 01/05/2013 - 19:11 | 3125965 Peterus
Peterus's picture

Forgot step 7: Vote.

Sat, 01/05/2013 - 19:16 | 3125976 geekgrrl
geekgrrl's picture

Yet another mis-allocation of resources. I know a twenty-something that had a music major, and managed to rack up over $100k in debt. WTF kind of job (besides rock star) is going to have any chance of paying that off? It's just ludicrous. The government should not be backing student loans, period. It removes all the risk to lenders and just like the cost of housing, the cost of "education" is massively inflated in price simply from the flood of easy credit that flows into the system.

As Reggie showed in his article on the student loan debt, most students aren't even able to do the basic math to calculate the payoff and relative advantage/disadvantage of a college education; they're just following a mythical script about the benefits of having a college education while paying little to no attention to the costs. But I don't blame them because the whole culture perpetuates this myth. ZH is one of the few places where the benefits of getting a college education is challenged by honestly portraying the real costs.

All that being said, the real beneficiaries here are again the TBTF banks. I appreciate the feelings of folks here who are disgusted by people taking advantage of "freebies," but I don't really see it that way. From what I can tell, the modus operandi of the banks is to get as many people as possible into perpetual debt. Once they have you hooked, they're in control, and going forward I think they will be leveraging the power of the State to extract their pound of flesh, and freedoms of all sorts will be affected. I've been debt-free since 2007, and I'm never going back. There's no carrot they can dangle that would induce me to take on debt; I've already seen the shadow of the stick first-hand and want no part of it.

Sat, 01/05/2013 - 20:41 | 3126146 Miffed Microbio...
Miffed Microbiologist's picture

Well said geekgrrl! It's great to see some younger people not hoodwinked by the scam. I get very weary listening to the 50+ group complaining about the teenage to 30 group. Yes, they do seem lost with only shiny baubles to comfort but their world is bleak and will continue to be so for years, decades to come. Kind of reminds me of a story someone told me about a little girl in Japan after Hiroshima. When they pull away all the wreakage, there she was just singing and petting her doll. At 51 I'm thankful I still have a well paying job that still, so far, put food on the table. I was fortunate to be able to pay off my student loans (16,000 in 1987 paid off in 1993). But like many others I have faced there is no way I can retire. The numbers don't work. Even if we simply to the extreme Bens inflation will eat us alive. Funny thing is there is a great need for microbiologists. However to get my position one has to pay 25,000 for an internship on top of a four year degree. In my day they paid us a 300/ month stipend! So I'm going to die on the job and no one can afford to train to replace me! Just brilliant!

I was hoping to say some words of encouragement and Ive just got myself depressed! Mr miffed says that's a sign of too much ZH and I need a bit of USA Today for some happy happy joy joy. Ok, I'll give it a try


Sat, 01/05/2013 - 21:12 | 3126206 geekgrrl
geekgrrl's picture

I'm 48 and also took out 16k in loans a few years after you, which I was able to repay in about 5 years. I actually looked at the cost/benefit numbers before starting college, and it was clear at the time that the benefits would far outweigh the costs. Not true today for most specialties. I also was able to get a postgrad degree paid for by a corporation, and I paid for another postgrad degree myself (cheap state school).

I'm also grateful to have a decent paying job, and more than a few times it has struck me how lucky I am relative to others and that to a large degree, this luck was not of my making. It only came about because the turnover in Asia among engineers is so fast that very few people have any kind of institutional knowledge of what has been done in the past. 

As for retirement, it is my belief that it is essentially impossible to predict circumstances in 2030, and that the probablility that the US Dollar is still in existence is close to zero. I think my chances of being killed in a BNC sort of an event to be much more likely, so why plan for a non-existent future? Sorry to be even more pessimistic, but I think it would be hard to over-estimate how bad things are going to become.

Sat, 01/05/2013 - 22:01 | 3126282 Miffed Microbio...
Miffed Microbiologist's picture

Wow, I thought I was pessimistic! :-) well maybe it's more facing reality vs pessimism. For years both mr miffed and I have fought the outsourcing of our jobs. My husband graduated in computer science in the early 1980s. In the 90s it was clear his job would be going overseas so he climbed fast into high level development, architecture. He and a few others are the development brains of the company and will only lose their jobs if the company colapses. He's early job has been completely replaced by Indians and Chinese. Funny thing, they all have PhDs and he has a BS. Most routine lab work in my field has been replaced by Filipinos. Many were drs in their original country. When micro and molecular become more automated I will have to move into administration and management which I have no interest. Unfortunately I won't have a choice. My mother- in- law retired at 60, traveled the world for 20 years and is living very comfortablly. She still tells us we should save our shekels in a jar and then can live as she. Before it use to piss us off but now we just laugh. In her day, you worked at one job and retire with a great pension. Today we are constantly sniffing the wind for any sign we may lose out job for not being competitive . Maybe global thermonuclear war would be an easy out... as long as I catch the bomb.... Wouldnt want a slow lingering death. Ok back to happy happy joy joy.


Sat, 01/05/2013 - 22:26 | 3126315 geekgrrl
geekgrrl's picture

I'll never forget my mother telling me that "As long as I'm dead before things fall apart, that's all I care about." (paraphased)

It seems very clear to me that things are coming to a head, and that it will only be a few years before this all falls apart. Those multi-million dollar public pensions will turn to dust, and that will be that.

Sun, 01/06/2013 - 00:59 | 3126557 Miffed Microbio...
Miffed Microbiologist's picture

Well, I've open a bottle of Syrah from a friend who we help harvest their grapes every year. This was an especially great year for them, they won a silver metal on this wine amid thousands of other entries. Funny thing was after we harvested that year, a few hours later the whole thing nearly burned down in the 2nd largest fire in San Diego's history. So out of misery and almost losing their lives they have this wonderful wine. So I lift a glass to you geekgrrl and all my other friends here that in this hour of hopelessness, dispair and darkness there may be some hope and happiness after all is said and done. Wishing you the best and hope so see you well on the other side after the shitstorm has finally passed.


Sun, 01/06/2013 - 01:08 | 3126563 geekgrrl
geekgrrl's picture

Thanks Miffed.

My best wishes to you and all your kin for the coming year.

Sat, 01/05/2013 - 19:28 | 3125999 IridiumRebel
IridiumRebel's picture

This is fucking great! University of Hooked on Phonics here I come! I be da majoring da in da South Canadian Art Historys da. Where my gubmint checks?

Sat, 01/05/2013 - 19:30 | 3126010 Tombstone
Tombstone's picture

No end to socialist bailouts, Komrades.  They will have a lock on the voting block for many decades as long as Benny supports all this silly central planning.  Another 5 year plan anyone?

Sat, 01/05/2013 - 19:34 | 3126014 BurningFuld
BurningFuld's picture

Of course we have to blame the students for tuition going up. I mean they are the ones setting the tuition rates aren't they. 

OR  Could it be the fact that the private (Businesses) schools are run for profit and are going to milk the system for every fucking dime they can get.  Hard to say.

Sat, 01/05/2013 - 19:39 | 3126022 I am Jobe
I am Jobe's picture

Expesive hookers and pimps one must say, Idiot inbred fucks still pursuing a dream which is to falter

Dumb Amerikans


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