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Delinquencies On Student Loans Surpass Those On Credit Card Debt

Tyler Durden's picture


Those who have been following our year-long series exposing the student debt bubble are by now well aware that this latest $1 trillion+ reincarnation of subprime will have a very unhappy ending. Which is why today's release of the quarterly Fed report on household debt and credit will hold few surprises for them. There is however, one data point which is notable: as of December 31, 2012, the soaring delinquency rate on student loans (first reported here, and subsequently confirmed by the Fed itself), has surpassed that of credit card debt.

Which makes perfect sense: because as consumers are still aggressively deleveraging their revolving balances, they are simply replacing them with far cheaper, Federally-funded credit in the form of non-revolving student debt, which as all know, is used for most other purposes but paying down study-related expenses. And why not: since the government is providing a cheap credit subsidy to the big banks, why should consumers not find the cheapest cost of funding. That everyone else will have to pay for this blow up when it ineivtably does happen, as every credit bubble always ends, is a different story.

And as a tangent, these three charts should effectively explain why the "Housing recovery", i.e., the second housing bubble is in full force in California and Nevada.

The epic California debt balance per capita:

And the rebound in Nevada, already highest, delinquency rate.

Source: NY Fed


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Thu, 02/28/2013 - 12:50 | 3286165 YBNguy
YBNguy's picture

Obama will never address this, like during the SOTU he thinks more access to student loans and spending is required. We all know it's to keep NEETs off unemployment figures.

Thu, 02/28/2013 - 12:59 | 3286204 onewayticket2
onewayticket2's picture

unless he's going for a third term, i think the younger generation is going to have a hard time getting their heads around just how used they were over the last 5 years.  they thought this guy was on their side, but all he's doing is spending $200B a month of their money....and they dont even get jobs out of it.


Thu, 02/28/2013 - 13:12 | 3286256 DJ Happy Ending
DJ Happy Ending's picture

Yeah right, they will blame it on evil corporations. Obama will always be a saint in their eyes.

I'm changing my name to DJ Unhappy Ending in honor of this article.

Thu, 02/28/2013 - 13:19 | 3286322 Common_Cents22
Common_Cents22's picture

they are too dumb to realize anything.  They'll be given their talking points that its evil big business fault.

Thu, 02/28/2013 - 13:26 | 3286354 Divided States ...
Divided States of America's picture

I am sure half of those credit card debt also belongs to students....I see so many kids nowadays with all the newest gadgets, latest top brand name apparel. Fuckin kids are so spoiled nowadays....and oblivious to their apocalyptic future.

Thu, 02/28/2013 - 14:18 | 3286593 Bicycle Repairman
Bicycle Repairman's picture

This is how we keep the unemployment #s down and keep food lines from forming.

Thu, 02/28/2013 - 14:47 | 3286723 bsdetector
bsdetector's picture

Student loan debt locks in a new generation of debt slaves. When the status quo taxes the hell out of us to pay present liabilities it will also point to the student loan takers to pony-up because government debt is fungible.


Thu, 02/28/2013 - 17:53 | 3287765 de3de8
de3de8's picture

Only for a little longer.

Thu, 02/28/2013 - 17:24 | 3287623 Mrmojorisin515
Mrmojorisin515's picture

who does obama work for?  lets see some of your "common_cents"


Ha better yet

Thu, 02/28/2013 - 12:59 | 3286205 Dr. Richard Head
Dr. Richard Head's picture

We don't need MOAR education.

We don't need interest rate control.

No liquidation in bankruptcy.

Benny leave those serfs alone!

All in all it's just another fiat ya'll.

Thu, 02/28/2013 - 13:32 | 3286370 moonman
moonman's picture

Roger Waters would be proud

Thu, 02/28/2013 - 13:35 | 3286382 Divided States ...
Divided States of America's picture

If the education was any better, the kids nowadays would realize what the fuck is really going on...

Thu, 02/28/2013 - 14:09 | 3286551 RebelDevil
RebelDevil's picture

When the cafeteria is constantly playing CNN on the TVs, you know the admins love to spread propaganda, or are themselves sheeple!

Thu, 02/28/2013 - 14:26 | 3286627 Jack Burton
Jack Burton's picture

What would happen if RT was played on the cafeteria TV's for a month and the kids saw a few episodes of Max Keiser?!?!

Thu, 02/28/2013 - 20:53 | 3288440 DaveyJones
DaveyJones's picture

I wondered how that university president wound up in Guantanamo

Thu, 02/28/2013 - 20:52 | 3288368 DaveyJones
DaveyJones's picture


Thu, 02/28/2013 - 13:02 | 3286219 Skateboarder
Skateboarder's picture

Take loans -> Go to college -> Drink 24/7 [-> Get attendance certificate] -> Realize there are no jobs, so give up on loans, collect welfare from family or state -> Drink 24/7.

Thu, 02/28/2013 - 13:06 | 3286246 DaveyJones
DaveyJones's picture

luckily, I started drinking before I went to college

Thu, 02/28/2013 - 13:07 | 3286251 yabyum
yabyum's picture

Skateboarder, You missed move into folks basement. fixed

Thu, 02/28/2013 - 13:12 | 3286287 Skateboarder
Skateboarder's picture

 How joyous it must be for a parent to never stop hearing "can Billy come out to play?"


Thu, 02/28/2013 - 13:20 | 3286325 insanelysane
insanelysane's picture

You get to hear stuff like there is no soda in the house as they jump in the car with their friends to spend a day at the beach.

Thu, 02/28/2013 - 13:20 | 3286327 FEDbuster
FEDbuster's picture

or cries of "Ma where's the meatloaf!!!!" from the game room/bedroom in the basement.

Thu, 02/28/2013 - 16:45 | 3287443 willwork4food
willwork4food's picture

Or.."When on earth are you geezers gonna die so I can take over your digs?"


Brings a tear to my eye..

Thu, 02/28/2013 - 15:31 | 3287011 Lendo
Lendo's picture

And finance cars through Ally Financial whilst working part time.  Complete jokeshow and these grads think the government is there to take care of them.

Thu, 02/28/2013 - 13:12 | 3286288 jcaz
jcaz's picture

No problem-  issue two credit cards to each ex-student in default, problem solved- the matrix lines up again.....

Wow, I should work in the Fed with ideas like that....

Thu, 02/28/2013 - 14:11 | 3286560 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

with no credit balance and something like 40% apr

Thu, 02/28/2013 - 13:59 | 3286489 NEOSERF
NEOSERF's picture

Oh he will address it...ignoring NV which will probably continue to be decimated as online gambling takes hold, all the numbers are going down.  Ignore that they are 4x higher than mid decade you can spin this as a positive pretty easily.

Thu, 02/28/2013 - 12:52 | 3286173 EscapeKey
EscapeKey's picture

I still don't get why student debt is non-dischargeable in bankruptcy. Surely the lender should never have a free pass on any debts, regardless of type.

To me, that's got debt slavery written all over it.

Thu, 02/28/2013 - 12:56 | 3286191 krispkritter
krispkritter's picture

Wonderful leverage to get serfs to discharge Med school debt to become an Obamanaut Doktor or join their version of the Brown Shirts. Join up and we'll write off your debt! (because we're the only ones that can)

Thu, 02/28/2013 - 13:03 | 3286225 McMolotov
McMolotov's picture

Exactly, aren't student loans pretty much federalized at this point? They'll come up with exemptions for people to fit whatever statist social engineering goal they have in mind. Military service in exchange for debt relief would be the first one that comes to mind.

Thu, 02/28/2013 - 14:07 | 3286538 RebelDevil
RebelDevil's picture

Not necessarily. Good credit and a co-signer will get you a student loan from any private bank if federal loans are not enough to cover expenses.

Thu, 02/28/2013 - 14:21 | 3286599 Bicycle Repairman
Bicycle Repairman's picture

So the co-signer does military service?

Thu, 02/28/2013 - 15:48 | 3287127 MachoMan
MachoMan's picture

The public service exemption already exists and is used in full effect...  for example, what do you think those useless law grads are doing?  Desperately trying to get sub market salaries from nonprofits or government agencies...  who, in turn, forgive the student loans after a few years.  Net pay?  Way more than market...  good if you can get it.

Thu, 02/28/2013 - 13:12 | 3286285 hungrydweller
hungrydweller's picture

Excellent observation!

Thu, 02/28/2013 - 12:57 | 3286197 Don Smith
Don Smith's picture

The lenders got a law passed in (I think) the 90's after some high-profile cases where doctors defaulted immediately after graduation to the tune of over $100K in debt discharged.  

Now, student loan purveyors can lend to anyone with a pulse and know that they can hound the borrowers (yes, debt-slaves) to their dying day, even garnishing SS benefits if necessary. 

Thu, 02/28/2013 - 13:05 | 3286237 EscapeKey
EscapeKey's picture

But surely the correct response to that would be to increase interest rates on this debt, or worst case refuse to lend to risky propositions - not create a situation in which all future (educated) taxpayers were to become serfs.

Thu, 02/28/2013 - 13:08 | 3286254 tarsubil
tarsubil's picture

It is almost as if they want us to become debt serfs. Hmmmm.

Thu, 02/28/2013 - 13:09 | 3286266 McMolotov
McMolotov's picture

You're looking for sanity from a system which has been overrun by sociopaths.

Thu, 02/28/2013 - 14:32 | 3286653 DaveyJones
DaveyJones's picture

"sociopaths" ?

you're too kind

Thu, 02/28/2013 - 16:23 | 3287315 MachoMan
MachoMan's picture

actually sociopathy is INCREDIBLY rare...  these folks are just normal, every day opportunists...  guided by that same light inside all of us...  self interest.

Thu, 02/28/2013 - 13:10 | 3286268 Ghordius
Ghordius's picture

EscapeKey, rephrase the question in the cultural dimension: isn't America the place where people are free - to try and to fail?

And remember that US universities are for-profit corporations with lobbyists

Thu, 02/28/2013 - 13:11 | 3286281 Ghordius
Ghordius's picture

and note that US prisons are increasingly too for-profit corporations with lobbyists

they need growth - they get growth

Thu, 02/28/2013 - 14:21 | 3286602 EscapeKey
EscapeKey's picture

oh don't get me started on for-profit prisons. not only is it essentially slavery, but it also creates all sort of perverse opportunities for those in the right (wrong) positions. like judges.

Thu, 02/28/2013 - 13:15 | 3286302 jcaz
jcaz's picture

ya, but read the fine print- they ARE dischargable after 20 yrs....  Of course, you're non-productive at that point anyway, so might as well finally feed yourself, I believe is the thinking.....

Thu, 02/28/2013 - 14:13 | 3286567 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

i once asked a dept of ed person why they give loans out to people whose majors statistically give them no chance at repaying the loans.... i was told they would be sued otherwise.... federal dipshipts at their brightest

Thu, 02/28/2013 - 13:54 | 3286444 DaveyJones
DaveyJones's picture

Yeah I remember that.

gee...the criminal lawyer in me (and probably a bankrupt lawyer) says that if a lender can show you're just fucking the system they can bust through and get you...with extra spanking.

But a blanket rule is turning the "victim" into the criminal. Hard to believe that would happen in banking and government...  

Thu, 02/28/2013 - 17:39 | 3287687 SmittyinLA
SmittyinLA's picture

Where do you get this "pulse" shit, many of these loans are to non-existant people with identification of the borrower impossible. 

"but I have an ITIN number" doesn't help, shit a huge portion of the "educational institutions" are outright frauds, last night I saw 2 different edu commercials from 2 different entities to learn how to: 

A: Make Cupcakes 

B: Become a massage therapist 

No, this wasn't a 1 day seminar for retards, but an actual educational instution(s) soliciting for students to get student loans to buy their "degree program"


Thu, 02/28/2013 - 14:15 | 3286576 RebelDevil
RebelDevil's picture

A degree is not collateral. There is no collateral, hence why it can not be discharged.

Thu, 02/28/2013 - 15:45 | 3287109 EscapeKey
EscapeKey's picture

both secured as well as unsecured debt exists.

why is student debt supposedly (by your argument) secured?

Thu, 02/28/2013 - 12:53 | 3286176 krispkritter
krispkritter's picture

Welcome to Generation D(ebt)...FOARWARD!

Thu, 02/28/2013 - 12:53 | 3286178 HD
HD's picture

They can't get credit cards. What they can get are government backed student loans that they can NEVER get out of - even in BK. Student loans help put kids on the debt hamster wheel and keep them there.

Thu, 02/28/2013 - 13:20 | 3286324 DOT
DOT's picture

When you graduate your Visa,MC,andAmex get cancelled. Bwahhahahahah! Now just try to find a job.

Thu, 02/28/2013 - 14:22 | 3286612 Bicycle Repairman
Bicycle Repairman's picture

It's not just kids.  It is also middle-agers looking to re-train.

Thu, 02/28/2013 - 12:53 | 3286180 Optimus Nexus
Optimus Nexus's picture

The collapse is coming from all angles, we've got nowhere to run and they know it. And I say we because us cockroaches, the little guys, will suffer. Not the godless, blood-sucking trolls at the top.

Thu, 02/28/2013 - 13:08 | 3286252 McMolotov
McMolotov's picture

People always say cockroaches will be the ones who survive the apocalypse, so think like a cockroach. Keep a low profile and stay out of the light as much as possible and you'll do alright.

The ones who survive will be the ones least connected to and reliant upon the system, the ones who draw little attention to themselves and who can adapt to a shitty environment.

Thu, 02/28/2013 - 12:55 | 3286182 foodstampbarry
foodstampbarry's picture

Oblameo will address it in the next bailout. Student bailout coming soon, along with legislation to end Presidential term limits.

Thu, 02/28/2013 - 12:54 | 3286185 pragmatic hobo
pragmatic hobo's picture

... making of a slave generation ...

Thu, 02/28/2013 - 13:13 | 3286290 McMolotov
McMolotov's picture

A permanent underclass dependent upon the government is every statist's wet dream.

Thu, 02/28/2013 - 13:44 | 3286407 Kirk2NCC1701
Kirk2NCC1701's picture

Yeah, we had that for many, many centuries.  It was called Feudalism, where a ruling elite -- called Aristocrats -- claimed they had the "divine" right to rule over the masses.  Swap out some labels and you get the same thing resurfacing today.  Except we now call the elite by titles such as Investors, Shareholders, etc., who calim they have a natural right.

In the past, when the elite robbed the poor, it was direct, material and visible.  Today it's indirect, financial and mostly invisible to most people.  It is not the mentality, intent or goal that have changed.  It is the methods that have:  from primitive to sophisticated.

Thu, 02/28/2013 - 12:57 | 3286198 Haus-Targaryen
Haus-Targaryen's picture

2016 POTUS election will have Student Loan debt forgiveness above $50k as a way to "stimulate" the economy.  I am a Libertarian, but every man has his price.  Mine happens to be approximatly $250,000.

Thu, 02/28/2013 - 13:11 | 3286276 Skateboarder
Skateboarder's picture

250K? Damn son, you fancy huh. I'd do it for a McWhopperSupremePlastic!

Thu, 02/28/2013 - 13:25 | 3286348 Haus-Targaryen
Haus-Targaryen's picture

Yeah, I'm going on year 9 of private higher education ***BUTTTT*****


Its not some BS Art History degree


Bachelors and Masters in Accounting



and the German langauge

Thu, 02/28/2013 - 14:15 | 3286577 InTheLandOfTheBlind
InTheLandOfTheBlind's picture

is this your way of whispering to yourself that it will all be ok?

Thu, 02/28/2013 - 20:58 | 3288459 FEDbuster
FEDbuster's picture

Maybe you can help the Germans find their gold and count it for them?

Thu, 02/28/2013 - 13:18 | 3286316 RSBriggs
RSBriggs's picture

Obama is already implementing student loan forgiveness - people have incredibly short memories.  Of COURSE they've stopped paying on the loans....

Thu, 02/28/2013 - 13:29 | 3286353 Haus-Targaryen
Haus-Targaryen's picture

After 20 years.  The schemes I've already seen to make that 20  yr amount as large as possible have been quite entertaining.

Thu, 02/28/2013 - 13:46 | 3286416 RSBriggs
RSBriggs's picture

Unless you go to work for the government, in which case that drops to 5 years.

Thu, 02/28/2013 - 14:29 | 3286564 Aegelis
Aegelis's picture

Where's my $60,000 of forgiveness that's been sitting around for over a decade? Ah, right, it's only for those students who have a loan after 2007, live in an area recently destroyed by a hurricane and whose last name begins with the letter X, just like his mortgage program.  Coincidently, my government loan was sold off to a private institution.  I wonder why.  Lunch break is over, back to work.

Thu, 02/28/2013 - 13:00 | 3286210 LongSoupLine
LongSoupLine's picture

Wait until the fucking subprime auto one kicks in like fucking chuck Norris on fucking bath salts.

Fuck you Obama, you fucking welfare ip. Fuck off you crooked Chicago bank ass wiping fuck.

Thu, 02/28/2013 - 13:09 | 3286262 BORT
BORT's picture

Could you perhaps be a bit clearer on how you really feel?

Thu, 02/28/2013 - 13:11 | 3286282 McMolotov
McMolotov's picture

" fucking Chuck Norris on fucking bath salts."

Goddamn poetic.

Thu, 02/28/2013 - 13:23 | 3286345 ParkAveFlasher
ParkAveFlasher's picture


Thu, 02/28/2013 - 14:02 | 3286311 FEDbuster
FEDbuster's picture

"like fucking chuck Norris on fucking bath salts"

Somehow I can't seem to shake the image of a naked Chuck Norris throwing round house kicks at random people with chunks of human flesh hanging from his mouth.  Nice imagery LSL.  

Thu, 02/28/2013 - 14:47 | 3286726 eatapeach
eatapeach's picture

When he's in the office, best not say "I need a three-hole-punch".

Thu, 02/28/2013 - 13:08 | 3286235 DaveyJones
DaveyJones's picture

don't worry, that money was used to buy equally useless products

Thu, 02/28/2013 - 13:05 | 3286238 laomei
laomei's picture

Here's how much debt I have: $0

Cars paid in full.  2 Homes paid in full.  And a rather nice wad sitting in non-US banks.  Not to mention my stacks to ensure it stays the way it should.  Good luck poor people!

Thu, 02/28/2013 - 13:10 | 3286275 El Hosel
El Hosel's picture

 BULLISH......As soon as all those upside down students give up and quit looking for a job the unemployment "numbers" will improve. Party on you crazy kids.

Thu, 02/28/2013 - 13:09 | 3286260 ebworthen
ebworthen's picture

"If banks, insurers, and corporations don't have to pay their bills - why should I?"

Thu, 02/28/2013 - 13:09 | 3286263 glenlloyd
glenlloyd's picture

IIRC there was something new in consumer protection that seriously slowed down foreclosures? So a rise in NV is happening even as the new rules take effect....stunning.

Thu, 02/28/2013 - 13:25 | 3286349 Bam_Man
Bam_Man's picture

The casinos eventually wind up with everyone's money.

Thu, 02/28/2013 - 13:09 | 3286264 yogibear
yogibear's picture

Bernanke and the Fed will simply devalue the US dollar by 70% again. That's what their planing.

oh well if people on fixed income go starving.

It's all about ever increasing debt.


Thu, 02/28/2013 - 13:15 | 3286294 swmnguy
swmnguy's picture

Student loans have been gradually made non-dischargeable through bankruptcy since 1976, but the real hammer hit in Joe Biden's Bankruptcy Bill of 2005.  Subsequent Supreme Court rulings allowed the Feds to withhold Social Security and other entitlement payments to debtors and their co-signers.

In 2005, when the Bankruptcy Bill was making its way to a vote, I noticed a big media full-court-press to tar individuals as greedy, lazy and irresponsible; buying up all manner of goodies and then dodging the bill through BK.  I knew a few people who had done personal BK's, but every single one of them had had a medical crisis; some coupled with divorce or loss of job, but medical being the primary driver.  So I knew the media scapegoating was a smokescreen.  That was also the time I realized that the home mortgage finance situation had become completely irrational, and was going to collapse.  And the health care finance bubble.  And the cost of college had become unaffordable for most people, even if they didn't know it yet.  It was becoming obvious that the middle class was tapped out, and a financial collapse was unavoidable.

Right then I started to realize that TPTB knew all of these finance machinations were going to collapse, and they would use all the power they had bought to allow them to stuff their pockets as deeply and for as long as they could manage it, until the wheels fell off.  I figured we'd hear about crisis after crisis, and the common factor would be a pitch that we all have to turn over every pile of wealth in the country to the finance industry in one way or another; be it fees, government bailouts, formerly "free" services now being a la carte, restrictive rules tightening up; you name it; at every turn, we were going to be skinned rather than fleeced.  It would be incremental, each time positioned to us as a specific response to a specific crisis, and if we didn't assume the position it would be the end of the world...until the next crisis.  The cycles of crisis would tighten and tighten and get more and more frequent.  The underlying cause, which must never be mentioned, would be that an economy can't support a finance sector that skims off any more than the 5% that had traditionally been its share of the economy, but which has now risen to nearly 40% give or take.  Rather than restore finance to its rightful and healthy role in the economy, the furniture would be burned to boil up the seed corn.

I haven't seen a single thing in the subsequent 8 years to change my mind.

Thu, 02/28/2013 - 13:47 | 3286420 Alpha Monkey
Alpha Monkey's picture

Subsequent Supreme Court rulings allowed the Feds to withhold Social Security and other entitlement payments to debtors and their co-signers.

Is this all debts, or just Student Loans?

Thu, 02/28/2013 - 14:08 | 3286545 sluggo
sluggo's picture

It only applied to Student Loans, mainly because they are totally unsecured and tend to be around as much as a typical new car loan (if not much more).  Back then banks were more involved in the loan and collection process as this was well before Obama took over the student loan industry.  The banks weren't willing to do these large, unsecured loans and wanted recourse of some type.  Anything for the bankers!

Thu, 02/28/2013 - 15:27 | 3286997 swmnguy
swmnguy's picture

What "Sluggo" said.  I was just talking about Student Loans.  The rest of the Bankruptcy bill imposed more stringent limitations on BK debtors, like mandatory credit counseling, more burden of proof of inability to pay, etc.  Most of that didn't make much difference to the vast majority of BK consumers.  They just had to wait longer and spend some quality time with somebody else telling them, "Yep, you're bankrupt."

I haven't noticed that the Bill has impeded strategic bankruptcies by wealthy and/or savvy and lawyered-up people and corporations looking to dodge out of contractual obligations, though.  Just made utterly insolvent people eat some more dirt.

Thu, 02/28/2013 - 14:39 | 3286675 DaveyJones
DaveyJones's picture

great post

and look how far we've fallen since.

Back then the banks succesfully pushed themselves as the victims

This time around, in 2008, the facts were so clear, they couldn't even sell that. No one questioned they were the criminal cause

and what happened 

The law has completely gone under 

Thu, 02/28/2013 - 13:15 | 3286306 RSBriggs
RSBriggs's picture

Of COURSE they've stopped paying student loans.   Don't you remember?  Obama promised FORGIVENESS for student loan debt....

Thu, 02/28/2013 - 13:22 | 3286333 Common_Cents22
Common_Cents22's picture

obama slaves.  join up with obama's army for 10-20 yrs and your debt will be forgiven!  a chicken in every slaves pot.

Thu, 02/28/2013 - 13:23 | 3286340 Tsar Pointless
Tsar Pointless's picture

*Only applies to future loans.

As of 2014, if graduates make timely payments each month, loans will be forgiven in 20 years! This is a huge deal for those who expand out their loans to the maximum. According to The New York Times article "Student Loan Overhaul Approved by Congress" (March 25, 2010), writers David M. Herszenhorn and Tamar Lewin report, "those who take out new loans after July 1, 2014 . . . [who] keep up their payments will have their loans forgiven after 20 years, reduced from the current 25."

Read more at Suite101: Obama Student Loan Debt Forgiveness | Suite101
Follow us: @suite101 on Twitter | Suite101 on Facebook

Thu, 02/28/2013 - 14:11 | 3286559 sluggo
sluggo's picture

I don't have a source, but I remember hearing about even earlier (10 yr?) forgiveness if you work in "public service" (read government or non-profit).  Should be forgiven based on how many jobs your start-up business has created!

Thu, 02/28/2013 - 13:16 | 3286307 SandiaMan
SandiaMan's picture

Texans like those new wheels! Slaves

Thu, 02/28/2013 - 13:21 | 3286332 22winmag
22winmag's picture

Student loan suicides... on the rise.


Kiddies (many well into their 20s) should not be permitted to sign their lives away with the stroke of a pen.

Thu, 02/28/2013 - 13:44 | 3286412 Alpha Monkey
Alpha Monkey's picture

Are you advocating against the military?  I mean, I agree if that's the case.  But if not... think about it.

Thu, 02/28/2013 - 14:44 | 3286696 DaveyJones
DaveyJones's picture

Who do these crazy kids think they are, Indian farmers?

that's why they're going to solve both problems by letting them kill themselves in the army while working off the loans

Thu, 02/28/2013 - 13:22 | 3286338 Kirk2NCC1701
Kirk2NCC1701's picture

As the REAL economy worsens, I'd expect more young people to go to school for an 'elite' education.  In the hopes of landing a job they can't get now.  As the gap between hope and reality widens, the debts will rise.  Debts that cannot be cancelled by bankruptcy.

And since a big part of education is for people to think, where exactly is the critical thinking going on here?  These brainwashed fucks don't even know a damn thing about the monetary system!  And we're supposed to feel sorry for their ignorance and hopium addiction? 

Thu, 02/28/2013 - 13:29 | 3286361 Bam_Man
Bam_Man's picture

And some people still can't figure out the reason for the incessant "dumbing down" of the masses over the past 50 years. Heheheheheh.

Thu, 02/28/2013 - 13:54 | 3286454 Kirk2NCC1701
Kirk2NCC1701's picture

Yes indeed!  I told my kids if they want to get a degree in some foo-foo liberal arts program, that I'd disinherit them.  They can do that after they're financially independent and can afford to have a "good time" or pursue their "flights of fancy" -- like the elite & aristocrats of old did.

For now, I told them, stick to degrees or trades that are portable and self-employable.  And if you want to improve on that, be sure to strive for being The Best, as the world will ALWAYS need people with real skills and who are one of the best.  Be a leader (of sheep), not one of them.  And you can't be a leader if you follow trends, rather than cause them.

Thu, 02/28/2013 - 13:24 | 3286339 Zer0head
Zer0head's picture


Thu, 02/28/2013 - 13:23 | 3286344 Its_the_economy...
Its_the_economy_stupid's picture


(Full Time Serf, or substitute your own)

Thu, 02/28/2013 - 13:30 | 3286363 SmittyinLA
SmittyinLA's picture

Don't kid yourself, there isn't 2 pools of debtors, its all the same broad, the psych-major with 2 bastards working on a 3rd donor dude to pay her bills. 

Thu, 02/28/2013 - 13:37 | 3286389 haskelslocal
haskelslocal's picture

"To be in debt before you ever make money is to never be in debt in the first place".

- Random Fed Desk Banker

Thu, 02/28/2013 - 13:37 | 3286391 gbresnahan
gbresnahan's picture

The government loves stupid people.  Stupid people are forever dependent on the government.  Stupid people get ridiculous loans to buy things they can't afford.  Stupid people often drink the kool-aid.  Stupid people vote for people who give them more handouts.

Thu, 02/28/2013 - 13:40 | 3286401 Downtoolong
Downtoolong's picture

That's it. I may be retired, but, I'm going back to school so I can get a cheap student loan and buy gold with the loot.

Let's see, what shall I study? Do they still use nude models in sculpture class?


Thu, 02/28/2013 - 13:44 | 3286411 yogibear
yogibear's picture

Yes, take out all you can.

Bet against the debt!!! We will see massive inflation with all the Fed's printing.

We are already seeing it.


Thu, 02/28/2013 - 13:42 | 3286405 casaananda
casaananda's picture

Yah, not liking where gold and silver are today and recently. Hurts. BUT, no debt, house paid for and several hundred oz of AU. Meanwhile, gold stocks are waaay down. But comparitively, I should not complain except that all the world is a mess bcause of the FED.

Thu, 02/28/2013 - 13:45 | 3286413 Auntie Lo
Auntie Lo's picture

I know of 2 ways to get out from under student loans:

1 Work in some jobs (military, medical in underserved areas, probably teaching) and get X per year knocked off the total.

2 Consolidate your loans, pay 10% of your income for 20 years, then the rest is forgiven.

My kids have "educated" me. I haven't convinced them of a more ethical method (ie work your butts off and pay the damn things).

Thu, 02/28/2013 - 13:50 | 3286430 RSBriggs
RSBriggs's picture

If you go to work for the government, X is 20%.

Thu, 02/28/2013 - 14:16 | 3286587 sluggo
sluggo's picture

Down vote isn't against your comment; it's against that program!  Let's encourage people to work for the government.  That'll fix things.  Read a recent article (sorry, no source) that stated 70% of current college students want to work in non-profit ("helping people") or for the govenrment ("good benefits and job security").  We're screwed!

Thu, 02/28/2013 - 14:17 | 3286480 RebelDevil
RebelDevil's picture

"which as all know, is used for most other purposes but paying down study-related expenses."

Bullshit. Tuitions and Financial Aid are in a vicious cycle of inflation. By the time tuition is paid by loans and grants, there usually isn't much left to pay for R&B and books if you aren't upper middle-class.
This is the situation for real universities like UPitt, UPenn, Purdue, Penn State, Ohio State, Saracuse, ect.

For the fake colleges like U of Arizona (and possibly CC's), yeah, people waste their tuition money if they can get the money directly, instead of indirectly from the university.

As long the university gets the funds first, there is no problem in regards to dodging tuition payment.

Thu, 02/28/2013 - 13:58 | 3286483 Meat Hammer
Meat Hammer's picture

Subsidies = higher tuition = subsidies = higher tuition = subsidies. 

Thu, 02/28/2013 - 14:09 | 3286553 bonzo112358
bonzo112358's picture

Those of us who paid off our debts will be settled with the burden of those who don't.  It took me 12 years to pay off all my student loan and credit card debts after I graduated from college.  Just knowing that the tax payer will eventually fit the bill for those who decide to just stop paying is, to say the least, nauseating.

Thu, 02/28/2013 - 14:33 | 3286659 Jim B
Jim B's picture

I met a lady the other day that had to be pushing 70 years old, she is going to school!!!!


Good luck collecting that debt! 

Thu, 02/28/2013 - 14:36 | 3286671 El
El's picture

It isn't exactly a reincarnation of subprime. It isn't like they can repossess that $40,000 education (for lack of a better word), you know.

Thu, 02/28/2013 - 14:40 | 3286694 mind_imminst
mind_imminst's picture

This will not have an unhappy ending for the students who took out too much debt. It will be unhappy for tax-payers. Student loans will be another government bailout program. It is fait acompli.

Thu, 02/28/2013 - 14:46 | 3286722 venturen
venturen's picture

Let me guess Wall Street buys the debt....and they are bailout by main street...ONCE AGAIN! 

Thu, 02/28/2013 - 14:52 | 3286752 stevevan
stevevan's picture

If you were a betting man, would you short SLM?

Thu, 02/28/2013 - 14:56 | 3286777 syntaxterror
syntaxterror's picture

What's next after student loans? Where does the Free Shit Army stop next to get their funding?

Thu, 02/28/2013 - 15:21 | 3286964 dolph9
dolph9's picture

Yeah, but somebody has to keep funding the black athletes, overpaid coaches, administrators, and developers.  After all what is most important is winning an NCAA basketball or football tournament for "publicity."  Fuck educating.

That somebody is you!  The American middle class debt slave sucker.

Thu, 02/28/2013 - 16:22 | 3287306 ParkAveFlasher
ParkAveFlasher's picture

Now bend over and receive coaching, while the shower is nice and hot.

Fri, 03/01/2013 - 05:37 | 3289367 AmeliaV
AmeliaV's picture

People lose their jobs and rely on payday loans from time to time so stopping student loan payments is in the first position in the strategic default matrix....In addition, I think that the dark secret in the student loan mess is that student loan debt rose because it was the only debt available in the recession. People took out student loans to live on because home equity was tapped as well as credit cards. The truth is enrollments are down in all categories of higher education.

Sat, 03/02/2013 - 13:40 | 3293585 Fepericzer
Fepericzer's picture

FRBNY has pumped up the numerator with non-delinquent loans and has artificially removed performing loans from the denominator.  The results are the artificially-high delinquency rates FRBNY presents.  FRBNY seems more OWS than College Board.  Wonder what their agenda is . . . wanting to nudge Americans into the service jobs that represent the real need for America's capitalists?

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