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Delinquent Student Loans Hit Record, 30% Of 20-24 Year Olds Are Unemployed And Not In School

Tyler Durden's picture





 

Almost a year ago we shared a calculation according to which "Over $120 Billion In Federal Student Loans In Default", suggesting that the next credit crisis has already arrived. Since then the topic of the student loan bubble has become a household topic. Sadly, that does not mean it has gotten any better. In fact, according to the latest Education Department data it has gotten as bad as it has ever been. As Bloomberg reports, not only have overdue student loans reached an all-time high but the number of young people aged 20-24 out of school and unemployed is at a record high: not quite astronomic by European standards, but hardly a ringing endorsement of an economy set to transition labor tasks to the next generation, especially with the employment of those 55 and older at all time highs.

From Bloomberg:

Eleven percent of student loans were seriously delinquent -- at least 90 days past due -- in the third quarter of 2012, compared with 6 percent in the first quarter of 2003, according to the report by the U.S. Education Department. Almost 30 percent of 20- to 24-year-olds aren’t employed or in school, the study found.

 

The research is being released amid concern in Congress and President Barack Obama’s administration about rising college costs and $1 trillion in outstanding student loans, the largest category of consumer debt besides mortgages. Borrowers say the burden is affecting their choice of jobs and their ability to buy homes and get married.

 

“Today’s economy puts young graduates in a difficult position,” Jack Buckley, commissioner of the National Center for Education Statistics, which published the report, said in a statement. “A college diploma no longer guarantees a direct pathway to the middle class, making it harder to justify the expense of a degree.”

It's not all bad news: those saddled with tens of thousands of student debt at least have a leg up on those with no college education, supposedly:

College graduates have an edge in the job market, showing the need for higher education, Buckley said. The employment rate for young adults who are college graduates is 87 percent, compared with 64 percent for those with only a high-school diploma, the report found.

Which is great news for college grads looking for temp jobs and other openings for which they never even went to college. Oh well: new normal and all that. And if all else fails, they can just open an E*Trade account, take some trading lessons from the E*trade baby, and just BTFD.

 


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Thu, 05/23/2013 - 11:39 | Link to Comment docj
docj's picture

Who needs jobs when you have "Graduate School"?

BULLISH!!

Thu, 05/23/2013 - 11:43 | Link to Comment camaro68ss
camaro68ss's picture

just loan then MOAR money to pay off there other debts. Duh

Thu, 05/23/2013 - 12:04 | Link to Comment Grifter
Grifter's picture

Bob Benmosche was the keynote speaker or whatever it's called at my brother's graduation last Saturday.

He went from "I see all sorts of reasons to be optimistic about the economy" to "You are going to have to accept a higher retirement age, reduced benefits, and the need to be tremendously flexible in order to get a job out there" in the same sentence, more than a few times.

I had whiplash by the end of his speech due to the continual 180's he pulled in his remarks.  And afterward the speech was hailed as 'really inspiring/insightful'. 

Of course, he received thuderous applause when it was announced that he was the steward of AIG's repaying USGov $180B + another $22B or whatever it was in interest/profit (depending on who was verbally pleasuring him at that particular moment) from the AIG bailout.  I honestly thought a USA USA chant was on the verge of breaking out.

Thu, 05/23/2013 - 12:25 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Bob is one of the biggest tools out there - ALL smoke and mirrors.  At Paine Webber as EVP of Operations he was tasked with only ONE thing - developing a new broker system.  Only problem is Bob doesn't like having anyone around smarter than he is (he's clever and scheming but 'smart'?  ....eh.......).  After gutting the systems staff he brilliantly thought he could get operations people trained to write code....bwahaaaaaaaa.  After faking things with smoke and mirrors - no real progress at all, upper management began to have doubts.  Bob was made Southern Regional head and charged with 'testing' his new system (which didn't exist).

Somehow Bob got out and ended up as CEO of Met Life - which he proceeded to destroy, though he made the execs wealthy by taking the company public.  Killed morale and made the place hell to work for.  

Bob retired to an estate in Croatia - he commuted to work for AIG on the corporate jet before people screamed.  BTW - Bob was one of the higher ups at PW who'd screw his $20,000 a year clerks out of a $2000 bonus befoire he'd give up any of HIS bonus.

Another former PW employee and I had a discussion about Bob taking over AIG.  I thought he was the worst possible choice but admit my error.  The other person argued - convincingly that ALL YOU NEEDED WAS THE ILLUSION OF "SUCCESS" - and Bob was VERY GOOD at smoke and mirrors.

 

Another example of Amerika's  Capitalist 'Nomenklatura' - people who somehow managed to get into 'the club' despite a notable lack of real accomplishments.  But that matters little - once 'vetted' and part of the club, you are on the 'approved' list.  No amount of incompetence can get you off - look at 'Chainsaw Al' Dunlap.

 

Thu, 05/23/2013 - 11:53 | Link to Comment slaughterer
slaughterer's picture

Who needs jobs when you can get a job at the Fed.

Thu, 05/23/2013 - 11:56 | Link to Comment PiltdownMan
PiltdownMan's picture

I looked out at our graduates last week at convocation and almost wept. In debt and no jobs. 

Thu, 05/23/2013 - 13:43 | Link to Comment Dingleberry
Dingleberry's picture

Check the local gentleman's club. They're probably hiring.

Thu, 05/23/2013 - 14:20 | Link to Comment InTheLandOfTheBlind
InTheLandOfTheBlind's picture

do they take ebts?

Thu, 05/23/2013 - 23:24 | Link to Comment de3de8
de3de8's picture

Nobama will forgive to add to his free shit army

Thu, 05/23/2013 - 12:43 | Link to Comment azzhatter
azzhatter's picture

Hmmm- We need more immigrants

Thu, 05/23/2013 - 13:09 | Link to Comment Never One Roach
Never One Roach's picture

<<Who needs jobs when you have "Graduate School"?>>

 

I asked the 37 year old neighbor "kid" why he wanted to transfer to the larger univeristy...he said he was running out of degrees at the local one....

Thu, 05/23/2013 - 13:14 | Link to Comment Freddie
Freddie's picture

Many of them voted for Hope & Change....twice.   They love the African Islamic...not the one who hacked an innocent soldier in London to death...the other one.

Thu, 05/23/2013 - 11:40 | Link to Comment Pareto
Pareto's picture

secondary and post secondary education = overpriced baby sitting service

Thu, 05/23/2013 - 11:42 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Wake me when the default rate on the old student loans affects new student loan issuance.

<Otherwise it's all just moar background noise.>

Thu, 05/23/2013 - 16:48 | Link to Comment jerry_theking_lawler
jerry_theking_lawler's picture

I heard a friend talking about some 'state colleges' having a mechanism built in that when alumni with delinquent student loans reach a certain %, that the college's funding gets cut....???

any truth to this.?

Thu, 05/23/2013 - 11:41 | Link to Comment fonzannoon
fonzannoon's picture

The government needs to begin a new loan program directly to these poor kids etrade accounts so they can hurry up and btfd.

Thu, 05/23/2013 - 11:41 | Link to Comment Cursive
Cursive's picture

It's the Teenies.  Instead of Tune In, Turn On, Drop Out, it's Load Up, Buy Stuff and Hang Out.

 

Load Up (on debt), Buy Stuff (with debt) and Hang Out (in your parents basement).

Thu, 05/23/2013 - 11:44 | Link to Comment ejmoosa
ejmoosa's picture

Welcome to a fundamentally Changed America.

Thu, 05/23/2013 - 11:45 | Link to Comment Dr. Engali
Dr. Engali's picture

Have student loan debt? Here wear this brown shirt with a big 'O' on the sleeve and it will be forgiven. Further instructions to follow.

Thu, 05/23/2013 - 11:52 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

New instructions enclosed. Open immediately.

<Message as follows. Murder.Death.Kill>

We now return you to your regularly scheduled programming already in progress.

Thu, 05/23/2013 - 12:57 | Link to Comment Aegelis
Aegelis's picture

The answer for forgiving my loans were "no".  Looks like I still owe $85,000 from fifteen years ago.  Working my below-the-national-average income job in biochemistry.

Thu, 05/23/2013 - 11:47 | Link to Comment IridiumRebel
IridiumRebel's picture

Fucking. Bullish. 

Thu, 05/23/2013 - 11:49 | Link to Comment WarHorse
WarHorse's picture

"Guaranteed Student Loans"  ... yet another great idea brought to you by Big Govt.  GSL enables universities to raise the tuition 5x the rate of inflation.  The left wants to control/regulate everything but this they leave alone?  Another example of govt enslaving the people

 

 

Thu, 05/23/2013 - 12:08 | Link to Comment bluskyes
bluskyes's picture

Maybe they could set up federal loan offices in Vegas - one in front of every casino. I'm sure they could get lots of borrowers there.

Thu, 05/23/2013 - 11:51 | Link to Comment semperfi
semperfi's picture

If I was 20-24 knowing what I know now with a couple decades under my belt, I would refuse to be a tax donkey for transfer to people gaming the system - people on disability that aren't disabled, Fed govt criminals salaries & pensions, global bankster bailouts, etc.  And I would refuse to be a debt serf to universities, mortgage lenders, etc.

Thu, 05/23/2013 - 14:57 | Link to Comment MachoMan
MachoMan's picture

So...  what would you do exactly?

Thu, 05/23/2013 - 11:52 | Link to Comment ebworthen
ebworthen's picture

On no, this might eventually hurt the "Higher Affirmation" industry!

If the Food Stamps (EBT), Welfare, and Student Loans don't keep flowing there will be a lot of "idle hands" in the hormone laden age groups.

Thu, 05/23/2013 - 11:54 | Link to Comment IridiumRebel
IridiumRebel's picture

You boys see the tits on the Dow? Almost green you motherfuckers! Go!!!!!!!!!

Thu, 05/23/2013 - 12:00 | Link to Comment ebworthen
ebworthen's picture

Is Mandy Drury on already?

Thu, 05/23/2013 - 12:14 | Link to Comment maskone909
maskone909's picture

bro she is super hot...  prob the only reason CNBS is still on the air.  i cant tell you how much i cringe when i hear Maria "Diarhea" Baritoromohomo on.  The mear sound of her voice makes me want to pump a 12 gauge slug into my fucking TV.  seriously she sounds like she is a 1920's gangster "what are your lookin at see yeahh see?"

Thu, 05/23/2013 - 13:19 | Link to Comment Freddie
Freddie's picture

LOL!  You would think someone would have sent Maria for elecution lessons or electrocution.   She sounds like a longshoreman.   F TV and F Hollywood.  I stopped watching their shit when they elected the muslim.

Thu, 05/23/2013 - 11:57 | Link to Comment Lendo
Lendo's picture

I'm glad that I'm in my early 30s and gainfully employed.  These kids are realizing how fucked the economy is and that their professors are liars.

Thu, 05/23/2013 - 13:21 | Link to Comment Freddie
Freddie's picture

Their professors are evil liars.  The university administrators are even worse.

Thu, 05/23/2013 - 11:58 | Link to Comment insanelysane
insanelysane's picture

What happened to all of the articles from last year that were proclaiming that college education was a benefit at any and all costs?  Weren't there plans for the 50 year student loan and such?

Thu, 05/23/2013 - 11:59 | Link to Comment ebworthen
ebworthen's picture

They're still being posted on Yahoo! Finance.

Thu, 05/23/2013 - 12:03 | Link to Comment Lendo
Lendo's picture

Kind of ironic since the guy that sold Tumblr didn't graduate high school.

Thu, 05/23/2013 - 11:58 | Link to Comment Seasmoke
Seasmoke's picture

Talk about being low man on the pyramid scam.

Thu, 05/23/2013 - 12:04 | Link to Comment Inthemix96
Inthemix96's picture

This is yet another one of those conundrums where the chief printer can step in and solve an un-solveable debt problem with yet more debt.

Forward comrades, into the bright, debt crushing world of the modern finance industry solution.

Debt solves debt?  Fucking grade 'A' lunatics.

Thu, 05/23/2013 - 12:08 | Link to Comment maskone909
maskone909's picture

i cant tell you how wonderful the feeling;  6 months post graduation, applying to every job in the industry(even as far as Alaska), the only replies are rejection letters, and receiving that first student loan payment with no ability to repay.

 

lived at my brothers house for two years back then.  eating top ramen and beans most of the time. my bro is really a great guy to be around too.  he once accused me of stealing his silverware (severe aspurgers and paranoia)

 

yeah there is a whole generation of folks in this situation.  living with gernerations of other family members with no hope. 

Thu, 05/23/2013 - 12:29 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Your bro sounds like miine - bet he's collecting full disability from the gov. Mentally ill, refused treatment all his life, was enabled by parents who paid most of his bills.  I figure he was given directly or indirectly a half million over the course of his life - had a condo bought for him when parents died even.  No worries for him.

Thu, 05/23/2013 - 15:05 | Link to Comment MachoMan
MachoMan's picture

Sounds like you made a terrible financial decision.  I suggest trading the time you spend on here whining for learning what you need to know to make money in a different field... 

Thu, 05/23/2013 - 12:18 | Link to Comment clagr
clagr's picture

How is that "HOPE & CHANGE" working for you now?

Thu, 05/23/2013 - 12:24 | Link to Comment lindaamick
lindaamick's picture

The greatness of a country is now predicated on an educated population.

The youth of a country determine its future.

The US is squandering its seed corn by preying on its youth.

Education should be free to all.  Students should have a joy for learning and becoming educated. 

Job training is something altogether different than education. 

Colleges now confuse job training as education. 

Education is virtually dead in the US.

Thu, 05/23/2013 - 12:38 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

I like it when my waiter can quote Yeats and calculate the 2nd derivative on the fly ...

Thu, 05/23/2013 - 12:57 | Link to Comment moneybots
moneybots's picture

"Of course, he received thuderous applause when it was announced that he was the steward of AIG's repaying USGov $180B + another $22B or whatever it was in interest/profit"

 

It only took 6 trillion of tax payer debt for AIG to be able to do that.  The taxes are still due.

Thu, 05/23/2013 - 12:58 | Link to Comment Fuku Ben
Fuku Ben's picture

I know several people in that boat right now

All are going to likely use the US financial system method of addressing problems

Defer existing debt obligations and incur massive amounts of new debt and hope their shit comes out smelling rosy on back side

Thu, 05/23/2013 - 13:10 | Link to Comment JuliaS
JuliaS's picture

When you drop out in the 10th grade, you really might as well have dropped out in the 2nd grade. Why? Because you’re qualified for the exact same jobs. Matter of fact, the person that dropped out in the 2nd grade is more qualified because they have 8 years of work experience.

- Chris Rock

Thu, 05/23/2013 - 13:50 | Link to Comment denverdolomte
denverdolomte's picture

Great quote, and I just had this discussion with not only a job recruiter but some friends recently. Interestingly once you hit 7 years experience doing something with a resume to back it, your college degree means nothing in 95% of fields (except law, medical, and other science fields). I found with the high end jobs I was looking for, they want talent and personality as opposed to a single piece of paper that ENTITLES you to a job. 

Thu, 05/23/2013 - 13:57 | Link to Comment denverdolomte
denverdolomte's picture

Another favorite quote from a great interview with Neil deGrasse Tyson, speaking about education and the junctions of opportunities "Our academic system rewards people who know a lot of stuff and, generally, we call those people ‘smart.’ But at the end of the day, who do you want: The person who can figure stuff out that they’ve never seen before, or the person who can rabble off a bunch of facts?"

“We spend the first year of a child's life teaching it to walk and talk and the rest of its life to shut up and sit down. There's something wrong there."

 

Thu, 05/23/2013 - 15:09 | Link to Comment MachoMan
MachoMan's picture

I'll take a po-dunk lawyer with 7 years experience over a run of the mill harvard law grad fresh out of school.  Experience is king in virtually all fields.

Thu, 05/23/2013 - 13:19 | Link to Comment SmittyinLA
SmittyinLA's picture

Many of these students are living in deeply discounted low income apartments financed by municipal bonds leveraged on fraudulent sub-prime home loans, the city of LA has been quietly spending hundreds of millions of dollars on low income housing much propped up with students on loans & grants, when that bubble bursts its going to take real estate  and municipal bonds with it. 

Thu, 05/23/2013 - 13:20 | Link to Comment PiltdownMan
PiltdownMan's picture

They will vote Democrat. Guaranteed.

Thu, 05/23/2013 - 13:40 | Link to Comment Dingleberry
Dingleberry's picture

Exactly. They have thought themselvs stupid. But they will eventually learn. The hard way. But that's what it takes.

I have ZERO sympathy for any of them. They believed in hope n' change n' shit.

They can suck it.

Thu, 05/23/2013 - 13:51 | Link to Comment ToNYC
ToNYC's picture

Wake up Boomers to who's not paying your SSA. Got away with cheap education for a time, got crony at the Jump, but not so clean any shots at the Buzzer. Individuals given incentives over corporate banks make jobs at the end, which wiser men did in the beginning on their own.

Thu, 05/23/2013 - 14:10 | Link to Comment dolph9
dolph9's picture

The loans are not meant to be paid back, they are just churn for the system to allow bankers to collect interest.  To "pay back" loans is to destroy the financial system as we know it.  Total debt must always rise.

All loans are ultimately recycled into Treasury bonds, and all Treasury bonds are ultimately monetized.

Which means the economic system under which we live is one in which bankers make out with loot and enjoy a little bit of the good life before default or hyperinflation, which wipes out the world's reserve currency and crashes the entire global system.

Jewish American bankers are smart cookies, aren't they.

Thu, 05/23/2013 - 14:06 | Link to Comment Dre4dwolf
Dre4dwolf's picture

They should all just stop paying, theres no reason to pay it everything is going down anyway, paying down debt right now is like throwing money into a garbage disposal, completely pointless. . .  better to save your money, stop paying, and wait for the great reset of 2014~2015.

Thu, 05/23/2013 - 15:11 | Link to Comment MachoMan
MachoMan's picture

They aren't paying...  because they can't pay...  that's the whole point...  and, if they could pay, they'll leverage themselves to the gills with other debt to ensure they can't repay student loans...  those things are toast.

Thu, 05/23/2013 - 14:06 | Link to Comment youngman
youngman's picture

The congress will call this a crisis...and invent a HAARP Program to eliminate these loans...at a cost of course...to the rest of us....have to make the voters happy...and everyone falls for education as a great thing for EVERYONE.....its not....

Thu, 05/23/2013 - 14:08 | Link to Comment yogibear
yogibear's picture

Know a couple of them. Their struggling to pay student loans with part time jobs. Others have their parents co-sign. So their parents get whacked.

Everyone needs to quit working and live off the government.

Join Barry's free-stuff crowd. Free cell phones, food, rent, spending, etc.

 

Thu, 05/23/2013 - 20:23 | Link to Comment 22winmag
22winmag's picture

*Student Loan Suicides*

Do NOT follow this link or you will be banned from the site!