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Student Loan Interest Rates On Verge Of Doubling
One of the main reasons the entire debt-fueled house of cards propping the western financial system, hasn't collapsed in a smouldering heap so far - a development that has stumped all those who think of the Reinhart-Rogoff sovereign debt matrix as one dimensinal with only debt/GDP as the key variable and completely ignoring the interest rate (manipulated or not) - is that the cash interest payment on the global mountain of debt has been rather tame, courtesy of all developed world central banks going all in with serial, or increasingly more, parallel monetization of debt. However, while the US Treasury has the benefit of the Federal Reserve (and its Primary Dealer tentacles) as a backstopped buyer of all the debt that's fit to print, individual Americans are not as lucky. And as America's massively overindebted student body may be about to find out, there is no surer way to burst a debt bubble than to send its rates soaring. Because unless Congress pulls off a miracle in the next 24 hours and passes legislation that delays an inevitable doubling of rates on the most popular Federal (subsidized) Stafford loans, the interest is set to double from 3.4% to 6.8%.
From Bloomberg:
The argument isn’t over whether to allow the rate on the most popular type of federal loan to rise above 3.4 percent, the level set by law until July 1. It’s about how much borrowing costs will increase.
“The likelihood of students keeping the interest rate they had for the last two years is diminishing by the hour,” said Terry Hartle, senior vice president at the American Council of Education, the largest lobbying group for colleges and universities. “The outcome will be students will pay more than 3.4 percent in the short term,” he said in a telephone interview.
Unless Congress acts, the interest rate for subsidized Stafford loans, available to undergraduates from low-income families, will increase to 6.8 percent from 3.4 percent. More than 7 million students use that direct-from-Washington loan program.
Instead of passing legislation to extend that rate or set a new flat rate, lawmakers have been negotiating ways to let the rate float by linking it to the yield on the 10-year Treasury note.
Getting an informal agreement on the concept of flexible rates was the easy part. The more challenging part of the negotiations, according to those involved, has been figuring out how much flexibility to build in, and how much profit the government should extract.
Not pro bono credit-funded handouts? The democrats are up in arms at the merest thought.
Senate Majority Leader Harry Reid contends that there should be no profit at all.
“The issue is this: Republicans want deficit reduction,” the Nevada Democrat said June 25. “We don’t think there should be deficit reduction based on the backs of these young men and women who are trying to go to college.”
Complicating the talks is the more than 50 percent increase in the yield of 10-year Treasury notes, to 2.5 percent, since May 1.
Under a House-passed plan, that would have meant a student loan rate of 4.3 percent, rising to as much as 8.5 percent.
“It’s very clear students would be worse off under that proposal than simply allowing interest rates to double” because rates “would be lower initially but rise as interest rates rise,” said Pauline Abernathy, vice president of the Institute for College Access & Success, a nonprofit research and advocacy group in Oakland, California.
We'll spare our readers the details of the gargantuan size of the student loan bubble: after all last February we were the first to christen it so (for details on why the severity and cumulative losses on student debt will end up being on par with or worse than those from the subprime crisis, read here). However, what can not be emphasized enough is that the massive debt load is providing an effective firewall for the economy to grow in a normal fashion as it encumbers young men and women with an unprecedented amount of liabilities before they have even entered the work force.
The share of 25-year-old Americans with student debt increased to 43 percent last year from 25 percent in 2003, according to the Federal Reserve Bank of New York. During that nine-year period, the average education-loan balance of people in that age group increased 91 percent, to $20,326 from $10,649, according to the New York Fed.
With so much outstanding student debt, borrowers are having trouble contributing to the U.S. economy in other ways.
It has become harder for young people, especially those between 25 and 30, to secure other types of credit, including home mortgages, according to a February report on household debt and credit by the New York Fed.
Economic Drag
Economists warn that what is owed in student loans may rival home-mortgage indebtedness as a drag on U.S. growth.
“The difficulties borrowers face when trying to manage cash flow may have a broader impact on the economy and society,” Rohit Chopra, student-loan ombudsman at the Consumer Financial Protection Bureau, told the Senate Banking Committee on June 25. “When young workers are putting large portions of their income toward student-loan-payment payments, they’re less able to stash away cash for that first down payment.”
Private borrowing for student loans grew after Congress overhauled bankruptcy laws and made such debts non-dischargable in personal bankruptcy.
That change meant that “there were very few reasons for banks not to make educational loans to anybody who wants them,” Hartle said. “Most students who get in trouble by borrowing huge amounts of money get there because they have borrowed from private lenders” without the knowledge of their college or institution, he said.
What is worse, is that as the Fed recently discovered, "student" loans are used for anything but and "the Education Department has flagged 126,000 applicants attempting to pocket federal loans and grants without any intent of going to school." Of course the ultra low rates on most loans and the non-existent eligibility prerequisites only make student debt that much more attractive of a fundraising option for students and criminals alike. But the end result is the same: very few will end up repaying their loans in full.
What kind of loans?
The most popular government loan is the Stafford. Subsidized Stafford loans are limited to students with lower incomes, and the interest rate is 3.4 percent, set by Congress. The government pays the interest during school. The interest rate will increase to 6.8 percent on new originations if Congress doesn’t act by July 1.
Any undergraduate, regardless of income, can get an unsubsidized Stafford loan at a rate of 6.8 percent.
The federal loan limits for undergraduates are $5,500 the first year, $6,500 the second year and $7,500 in the last years. Graduate students no longer dependent on their parents also can take out Stafford loans.
Another type of direct federal loan, called PLUS, carries a rate of 7.9 percent for graduate students and parents of undergraduates.
One can see why the 3.4% number is starting to look shaky with the 10 Year recently surging from 1.8% to 2.5% and rising. It may not look too good for congress if subsidized students can borrow money at a lower rate than the US. Not unexpectedly, the GOP controlled House has come up with a base + spread type formula for rate pricing: "On May 23, the Republican-run House passed Kline’s legislation, which would tie student loan interest rates to the 10-year Treasury note plus 2.5 percent. In the Senate, Reid tried to round up votes for a two-year extension of the current 3.4 percent rate and fell short of a required 60-vote supermajority."
What's worse for those hoping to preserve the status quo is that an extension of the current system appears out of the question: "Some Senate Democrats say they will try again for an extension -- this time going for just one year instead of two, as was sought in the unsuccessful bill, S. 953. Independent Senator Angus King of Maine questioned that approach. “What will we know in a year that we don’t know now?” he said today."
For now there is one possible option:
As July 1 draws closer, with Congress planning a break next week for the July 4 holiday, a bipartisan group of senators say they have come up with a possible breakthrough -- a floating rate for Staffords, the 10-year Treasury borrowing rate plus 1.85 percent.
That proposal still has the deficit-reduction element that Reid opposes; it would pare the government’s red ink by $1 billion over 10 years, according to a statement from King, Democratic Senator Joe Manchin of West Virginia and Republican Senators Tom Coburn of Oklahoma, Richard Burr of North Carolina and Lamar Alexander of Tennessee.
Both Senator Tom Harkin, the Iowa Democrat who is chairman of the Senate Health, Education, Labor and Pensions Committee, and the panel’s top Republican, Alexander, predicted that the Senate would go home for the week-long July 4 break without acting.
Alexander, a former U.S. education secretary, said that if lawmakers can reach a consensus this week, Congress can return July 8 and approve the change retroactively.
And yet, even if this were to pass, one should perhaps ask: are continued low rates what is needed? After all the reason there is a $1 trillion student loan bubble is because of low rates. And the longer they are kept artificially low through subsidized schemes, the more painful the ultimate credit bubble pop. Only since the end-holder of the liability is the Federal Government, unlike in Europe which recently adopted a bail-in regime, in this case there will be no investors to punish.
Which only leaves the taxpayers footing the coast, as usual. But for now the stock market is soaring, debt is cheap, funding is plentiful, and all those who dare to warn about what lies beyond the horizon are squashed as alarmists and doomsayers. So be it: but it doesn't change the fact that there is only one ending to this credit-bubble story, whether in student loans, in mortgages or in US government bonds, and it is not a happy one.
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- "Let me pass up this free loan with no credit check since the interest rates are going to rise ..."
Said no one ever.
Guess I'm supposed to be happy that my classes were "affordable" since I've been paying 10% forever, with no options of lowering it.
Not a problem for everyone, just go NEG-AM.
As long as we're blowing bubbles, and no one in government gives a rat's pucker about debt, might as well go BIG!
Wherever a large group of Americans becomes more disadvantaged, the more barry-valerie-eric-janet-et al see the opportunity to use unlimited deficit spending to buy advantage for the marginalized group, thus using the politicized administrative agencies to add even more to "the base".
Legislative names probably now under consideration, that will not surprise me, could be:
'The Affordable Student Debt Jubilee Stabilization Program', and
'The Affordable Immigrant Full Benefit and Voter Registration Act'
"The Rate is irrelevant when you have no intention of repaying the Debt."
Confucious say
It's the Students' turn to "Just Walk Away" leaving taxpayers begging for moar Vaseline ... again.
Except it's the one kind of loan you can never "walk away from." Can't be discharged in bankruptcy. Hell, they can take it out of your Social Security payments if you live that long.
You wanna know what this is REALLY about? It's another piece of the government take-over of the economy and consolidation of governmental power. "Debt Slave" doesn't even begin to describe how screwed you are if you owe that money to the government and can't repay. You wanna know yet another way they intend to make the government the central figure in your life? This is it. You owe them FOREVER. They can do ANYTHING they want to you. Make you work for them to forgive the debt, for starters. Mostly, they just want you to keep voting to keep the status-quo in power. If you're a college grad with a hefty student loan balance they own you like they own welfare recipients. They can cut you a break or grind you into dust. Just depends on who you vote for.
Now with that said, who you gonna vote for now, debt slave? That's right. Click off that "D" in the voting booth. FOREVER, you fucking Muppet. (Not directed at you personally, just putting the point out there.)
Two words: MILITARY SERVICE.
But seriously, young people must be doing fine. They're all packing smartphones. My unemployed nephew just got a bundle that cost nearly $500. So please, stop telling me how "hard up" young people are, and what a stretch it is to make their loan payments, because the money has to come from somewhere, and it ain't from wishing upon a star.
I have close friends who are just about to start med school at 25. They'll be done when they're 32 and it will cost them 250k - 300k for the whole thing. They haven't any plans or ideas about how to pay back any of that, and neither does any doctor-to-be.
If they'e that naive, then it's hard to sympathize. There's a piece in the media lately about how many young people graduate in their late 20s and 30s without any work experience whatsoever, the implication being that there is no opportunity "out there," or some wishy-washy "victim" BS like that. THERE IS ALWAYS WORK. In my area, employers can't get enough locals for manual labour (picking fruit, flowers, etc.) so are forced to hire temporary foreign workers and even put them up in special staff accommodation. Our young narcissists won't lower themselves. We can't even get neighbor kids to cut senior citizens lawns for a few bucks. I say to hell with them, and the same goes to any parents who let their kids sit around on their butts all summer long. Those people had better not blame anyone but themselves for their lot in life. When did our country become so utterly lacking in principle, initiative, imagination, motivation and humility? PRIDE GOETH BEFORE A FALL.
They should be about 20%, since 13% are already in default and sure to rise.
The first, and very potent, weapon that Americans have to use against these scumbags--pols, crats and banksters--is to just quit paying. As these scumbags continue to destroy the economy most Americans will ultimately not be able to keep paying anyways, so might as well quit now and buy PMs and BMs (ballistic metals).
Student loans are a great debt type to quit paying on. It can take years for serious efforts to be taken and then one can have them "deferred" and play other games.
By the time all the options are exhausted the US will no longer exist and/or hyperinflation will have destroyed the debt.
The Four Rs
Rejection--No pay, no obey.
Revolution--They're preparing for it, you should be as well. See NDAA 2012/2013/2014, etc.
Retribution--We will know who and what these sociopaths are guilty of, and is there really any place for the likes of them in a restored Constitutional and civil society?!
Restoration--Restore the Constitutional republic.
There's a flaw in the logic. PEOPLE ASK FOR THE DEBT. THEY SIGN FOR IT. THEY WANT THE STUFF THAT IT BUYS. THEY WANT MORE AND MORE, FASTER AND FASTER.
Banksters are enablers, like drug pushers.
A loan with no risk of default is not really a loan. They know the risk of default is there, or they wouldn't have lobbied so hard to make it the only form of nondischargable debt other than that acquired in commission of a felony.
Both parties have to have risk, both parties have to suffer the consequences of that risk should it materialize. That means massive debtor default leading to massive creditor default. Sorry, that's just how, and much more importantly, why, capitalism has any chance of working.
I know what I'd do if I were of college age: take out the biggest loan, turn half into precious metals, get the degree, then get the hell out of the USSA, work overseas, marry a foreigner and get a second passport.
There won't be anything left of Social Security by the time you'd collect it, so you don't need that anyway.
While I respect you and your comment, unfortunately you are applying sheeple logic.
The banksters stole depositors' deposits and then created counterfeit currency in the form of loans to the debtors based on that theft. They then used stolen loot (taxes) from their boot heal-department, government, to prop themselves up financially while they retain the claims on the debtors collateral or labor.
Put another way, it's not "default" if the "debt" were stolen in the first, second or third place from you. I.e. you only "owe" it to yourself.
You're absolutely right, down to the last detail. My post was meant to be provocative by focusing on the element of CHOICE.
HAHA don't pay. I'll garnish you're wages (up to 15%) if you don't pay on your student loan. 'Offset' your taxes and SS, disability, whatever federal money you've got coming to you. If that dosen't pay it down we'll take your house, car, bank account... Yeah, don't pay the Feds and see what happens...
That is to say, what terrible advice you're giving out here.
Not paying is a form of resistance.
If you are scared, don't take the field, but when they come for you anyways, remember you chose to cower and allow the system to continue to feed off of you and yours.
Maybe they should have worked on this issue instead of illegals. I guess the idiot democratic college kids aren't as important as gardeners.
Who cares?
They ain't gonna be paid back, anyway, guaranteed, or not, dischargable or not...
It don't matter anymore.
Simply another way to enslave the peasantry, just like the Company Towns of Olde.
Thank God I'm in good mental health. I can understand why people are snapping these days... and the best is yet to come, Booyah!
Who cares?
The overlords. Debt is keeping an entire generation from opposing them.
Don't forget EBT cards.
Nobody ever forgets about EBT cards. Least of all those who have them. Not just the poor. Plenty of corporations sucking at the government teat that are effectively "Corp. EBT card recipients."
It's all about the government and your relationship to it right now. A relationship only to become more immeshed in the future.
Debt slavery 101. Most young adults don't find out about bankster economics until their out of college and the debt collectors garish wages are debt collectors are knocking on their door.
Go long boiled ropes, guns and ammo.
Seems like parents should be teaching their kids a thing or two before college eh? Like, 'Hey son, don't be a fucking slave! Pay your own way or pay with your soul... '
This is THE most important lesson parents can teach.
This is THE most important lesson parents can teach.
While that is certainly important, there are a few other lessons that are real important.
1. Don't get pregnant, or get a girl pregnant until you can afford to. Unwanted pregnancies help create the next generation of people who will not live up to their potential.
2. Don't get caught doing something stupid that will never ever leave you alone for the rest of one's life. The best advice, don't drink and drive, don't rob people, don't sell drugs, you get the message. Don't get a criminal record.
3. Invest in yourself. Go one step further than anyone else. Turn off the TV and spend some time learning a foreign language.
Success comes from learning from failure, and from patience.
Who cares?
Don't blame the tenured liberal Professors who already got paid and the Universities who made a fortune giving out useless liberal arts degrees. While at the same time making money with their college sports teams. Blame the guy who lent you the money to pay them. That makes liberal sense.
LOSING money with their sports teams that are used only to stroke administrative egos, and sucker in new students
see http://usatoday30.usatoday.com/sports/graphics/DataTables/2012/0515-NCAA...
Did you notice after revenue (income), and expenses (costs, ie salaries), The chart has a column for subsidies? How exactly do you "lose" money when you are being subsidized every year by the Govt to meet your cost needs? It's just another welfare state racket by the elite that's draining the tax payer.
Hey, that deck chair would look better over there next to the ice chunk.
It is time they pay their fair share
Hey, you pay for whatchu get..
And they certainly didn't get an education, FFS
One of my friends, who is a chemical engineer, lost his job last year. Made good $ so his unemployment $ was alright while he was looking. Lots of head fakes but, nada. Did some laborer and sandwich shop shit and decided to go back to school for pee aitch dee. He HATES teaching. But, sweet deal at a small university where he can further his research and get paid instead of paying out IF he teaches 101. Called me 2 nights ago in a rage and insisted on coming to show me the shit papers he was having to grade. So bad I could write a whole book. Kicker is, he's under orders to not give anything less than 90%. Doesn't matter, they all pass. Comfortably.
See my rant below. Simply paying tuition to get your piece of paper which is magically supposed to make you smart in the eyes of an employer.
First, I read your comments (above and below) and, I'm not arguing with you - I never finished, but actually paid for the college I had and have done just fine without the parchment to hang on my wall. Second, it's not "simply paying tuition to get your piece of paper". They aren't paying. They're getting brainwashed and getting loans for an "education" they are NOT getting.
I did fine too, just sticks in my craw that someone gets an opportunity because of a degree in American Lit. when the job was in finance.
Agree with you completely on the remaining points.
S'all good, Colonel. Can't pay for a piece of paper that says you're actually willing to WORK for a living. "If it was supposed to be fun, they wouldn't call it "work".
Do what you like for a living and you will never work a day in your life.
"They're getting brainwashed and getting loans for an "education" they are NOT getting."
Spot on.
Sounds like you're describing a business program. Good Lord were so many of the business students at my alma mater fucking stupid. Those useless alcoholic clowns go on to get MBAs and then "run" companies/agencies where nobody can tell what a smart employee looks like because the "leadership" is too busy making up complete and utter bullshit and patting themselves on the back for faking it through another quarter.
How do you, the lender, make more money? You lend more. But then you take on additional risk. So instead, you get a government guarantee and convince the government to make the debt nondischargable, then set up a cartel system involving yourself, the schools, and the employers.
You win because you can give anyone a loan with essentially 0 risk of the debtor ever discharging the debt.
The schools win because they can now jack up charges to basically whatever they want.
The employers win because the graduates they hire are massively indebted and thus have severely decreased labor bargaining power.
The schools lower standards so they can actually plausibly justify their enrollment of so many formerly unqualified students, and so that students don't fail out which would mean cessation of further loan origination, and to make sure the labor market remains saturated, skewed in favor of employers.
The employers require degrees so that persons have essentially no choice but to participate in the scam; without the cartel system in place, they would be essentially eliminating their pool of hiring candidates - which would quickly backfire and give labor increased labor bargaining power as companies attempt to correct the imbalance.
Why do employers accept lower-quality (despite being more-credentialed) hirees? They aren't actually lower quality than they would otherwise be. If the cartel system was not in place, the employers would have no choice but to hire from the very same cohorts, sans degrees. The degrees, since they have been commoditized, no longer imply virtually any difference between degree-holders and non-holders, except years of additional brainwashing/indoctrination and the willingness to submit to same. The prices of degrees do not fall, despite commoditization, only thanks to the price-fixing actions of the cartel, which is itself responsible for said commoditization.
It is a scam no less brilliant than debt-based fiat currency, and far more unethical, because, among other reasons, it specifically targets the young, and those with the greatest financial need for the "products" being offered - both the degree and the debt. Of course, this financial need is in no small part a consequence of the cartel's existence. They control supply, demand, and financing.
Just as the Fed destroyed the value of the dollar by 97% over the last 100 years, the rest of the government has destroyed the value of a college education by about as much.
Just now saw you. . . couldn't agree more. It's disgracefull. The kids (and a lot of their ((stupid)) parents) are being scammed on education like, pay-day-loan style. I live in a college town and I guess I'm "gregarious", so I talk to a lot of people (and I make my own $$)). The shit is really getting thick.
uh, why can't he find a ChE job? unemployment in this sector is less than 2%...i know, i am looking for one or two now and can't find any...plus, the one's i make offers to usually turn me down for higher$$ jobs....
supply and demand.
I dunno, Jerry. I'm in "fly-over" territory and, he's into shit he would need to move (big-ly) to be close to and has some limiting family issues in that regard. Not that there's not things going on but, it would still mean a move significant enough to effect his family and his wife makes pretty good $$ that would need to be replaced. Are you Phil's brother? Seriously, used to work with Phil Lawler. In K.C. - You can private me on that if so.
I can see reducing the interest rates on traditionally recognized fields like the hard sciences, engineering, the "trades", etc.., but for the crap like guys in women's studies, 15th century lesbian poetry and PhD's in Beatles Music Theory, let them stew.
Stupid is supposed to hurt.
Now you've gone and pissed me off, demeaning 15th century lesbian poetry.
I was gonna author a poem that junped into my head, but seriously, I cannot stoop qiute that low... yet.
Edit: WhoTF red arrowed that? What the fuck's wrong with 15th century lesbian poetry? Like somebody finds it offensive?
I was going to quote something involving Nantucket, but I couldn't think of the right word that rhymes with "clam."
And the red arrow, 'twas not me, for my favorite of all works, is lesbian poetry.
Jam, slam, ram, bam. Can't think of anything to rhyme with Nantucket, aw fuck it.
Thanks, I kept thinking "Stan" or "man", and I knew those wouldn't work.
You left out the best of all .... HAM!
There once was a girl from Nantucket,
Whose clit was so big she could suck it.
She despised boys named Sam,
As she ate bearded clam,
"If I had me a dick I'd fuck it."
As we used to say in the Navy, "Put a hole in a bucket and fuck it!"
Stoop too low knuckles and you'll get sand in your vajayjay. ;)
Apparently someone feels you shouldn't bang on 15th century lesbian poetry. If you wanna join'em, lick'em.
Lick a lesbian, oh yeah.
Sounds to me like you only have a BA in 15th century lesbian poetry. You should loan-up and go back to school and get a PHD.
Am disappointed Economics is not on that list!
Come on Divine, wake up. There are two sides to every trade, where did the money for the loan originate. Oh, I just printed it up as an electronic ledger entry out of, wait for it, fucking thin air, and I basically gave it away on the streets to every kid in America who is now my debt slave, and after that, we have a car loan, and then as things progress, we have a mortage, and then a business loan, and at the end, you are a slave the whole way. Somehow, printing up currency to make debt slaves is considered good business, and the debt slave made bad choices. Yeah, that makes a lot of sense to me.
I want to run the printer for a while. Making debt slaves seem to be a good market to enter, but I need a printer. Why the private central banking complex is given a monolopy on making debt slaves is really not fair to the little guy like me. I want me own set of slaves so I can live the high life, yup, the real Miller high life, full on Imelda Marcos, Leona Helmsley. I think the slave owners do it for the woman, so they are constantly surrounded by whores and slaves, that is the high life for me.
If interest rates double, student loan suicides will triple.
That's one way to discharge a fucking loan.
Correction: Only way.
I thought students didn't give a fuck about anything?
awesome! lets quadruple the rate....and get these fuckers out of their misery.
Awesome payback to college grads for the discrimination I had my entire career because I lacked a simple piece of paper. Fuck'em!
you're a big mental candy ass, you know that? like getting a college degree is hard or something, hell any damn fool can do it but evidently you're not just any damn fool... no, you're special
I watched my father go from no degree with a job as a gas station attendant to a man with a master's degree... one of the few people I know who's capable of bootstrapping every aspect of municipal infrastructure from turning over the first shovel to financial administration... he used to take lumps from guys with degrees also, in the end they all ended up reporting to him
so no, can't say as I can remotely sympathize with you... not because you lack paper, but because you lack *grit*
Uh you don't know me one iota. I never cared to go because I don't need a piece of paper or hoops to jump through to be certified smart. My entire 25 year career I did "degreed" positions purely on my intelligence and abilities. Did better than the majority of people pay wise. It got old hearing the old line about not having "the piece of paper".
Lack of grit wasn't my problem, it was my unwillingness to deal with stupid fucking bullshit.
With that being said, go FUCK YOURSELF for judging me without any knowledge about me.
M'kay pumpkin!
Did the same. I advised all my kids to avoid college. None of them listened. But two of them are engineers so it is not all bad.
BTW my field? Engineering including aerospace engineering.
I'm not rocket scientist but college isn't for everyone, agreed. In our current economy I think it's advisable to pick up a skilled trade. Something which can't be off shored.
Thanks for the reply.
fuckwit-I think what he is trying to say is that way too much emphasis is placed on a piece of paper and not enough on actual ability. I've seen guys in the construction industry with masters degrees that let experienced carpenter foreman run big jobs in Chicago because they don't know shit.
Precisely Otto, I've seen college grads get positions where they couldn't think their way out of a paper bag, only regurgitate answers.
Agreed. It's a "certification" only. Haven't met many people who became smarter in college. The smart ones would have made it just a big without a degree. The dumb ones would still be dumb, but since they have the sheepskin, they can get a government job.
Got a friend of mine who never went to college. Asked me many years back if I could help him write his resume. Maybe send him mine just to get some "ideas". Son of a bitch started handing out my resume with his name at the top- NO OTHER CHANGES. Bastard got a better job than I had at the time! Took him YEARS to admit to doing it. I gave him a pass, since it was really a no harm/no foul kind of situation. And you kinda have to admire his ingenuity.
In a world where everything has to be stamped, certified and verified for minimum required qualifications, I have a great deal of respect for people who find success without the traditional "required" trappings. 1 generation ago NOBODY in my family had a college education. Not sure the next one will, either. The bang-for-the-buck was questionable 20 years ago. Now it's just about upside-down stupid. Many people paying now are stupid kids (who don't understand the loan they got needs to be repaid with interest) or parents too scared to send their precious mush-brained kid out into the world without a degree.
FWIW, I retired at 42. That may change considering the current economic enviroment but I've enjoyed the past 4 years on my own time and my own dime. Time will tell and I'll make adjustments as conditions warrant.
Only grit Turtle lover has, is in his vagina.
Thanks for the down vote, envy is a bitch. You're a coward for not replying why.
it has nothing to do with grit. computer science at stanford is laughable at best. what the fuck are you suppose to do with that degree? my 13 year old knows more than most 2nd/3rd year cs students.
i once had the privilege to have worked with a group of people who had nothing but high school educations. They were some of the most talented and intelligent people I have ever met. scary crazy technical types. i have never met more brilliant people since. i was smart enough to realize i was a dumbass in comparison and did my best to sit quitely and struggle to learn what i could from them.
most are now in some very sensitive and critical roles doing stuff like this or that where a piece of paper means shit cause there are no schools that can teach you any of it.....
your father raised a fool......
PTS,
That was pretty cold, brother.
No worries Divine Wind, I have more grit than he knows. This is fight club, I can take it.
He'd be better named Turtle post saver since I'm sure he takes turtle post regularly.
http://www.youtube.com/watch?v=CMNry4PE93Y
According to twitter, the rate hike is a given:
"Senate adjourns for July 4 recess without preventing doubling of student loan rates. Will go up July 1. Hse approved separate bill."
Patching endless holes.
Sounds like a Duty now for the Future
Are these loans packaged in a way that we can short the bonds? That would be an awesome way for parents to hedge their kids defaulting and them getting stuck with the payments.
Ask Blythe. Then again, since Sallie is TBTF, you end up holding the bag, regardless.
None that I'm aware of, Fonz. Sallie is a GSE and those bonds are.......
I don't know. I can go as far as saying "I don't think so." You should really place a call to Goldman Sachs on that. They'll whip you up a derivative that will let you "play" that angle, I'm sure. In the real world of real Sallie bonds..... I would NOT treat it like any other bond short just because of them being a GSE. Normal financial rules of risk and return only apply to a certain point. Beyond that there be dragons.
In a free market, I would like your idea. But, ya know....
I owe 110 large and I make 75k a year. I pay interest only and when this happens I'll take two classes a semester at my local community college for 1800/year. Til. I . die.
I suggest Econ 101
I suggest The History of Lithuanian Aromatherapy an dits influence on Modern Freudian Psychoanalysis.
just a suggestion.....maybe you should go to Mexico, renounce your citizenship, denounce your debts, wait a month and then come back into the country illegally. within a few months you will be a citizen again and the .gov will even give you healthcare and a job....
use the system bro.
Is serfdom becoming more obvious nowadays?
Dang, that Masters in Lesbian basket weaving may not be worth the 200K ride after all.
But if you can get a lesbian to ride your face...
when you see the bill you'll need Obamacare
And that's when you commit suicide and then the elite's master plan would be achieved.
No you move to New York, where you can be declared legally dead after being missing for 3 years, purchase a big life ins policy for your "estate" when you go galt and go missing your parents administer your estate, collect the ins payment and pay off loan when your eventually found to still be breathing, and the insco demands their $$ back you file chapter 7.
Crap a person could get disbarred for that, the above was purely fictional and for entertainment purposes only do not attempt
What! It's going to cost twice as much to get a useless degree?
Interesting, because defaulting on a humungous loan at a young age could be a "trim-tab" kind of event. In other words, one could begin veering away from life as a mainstream debt-slave, and toward various alternative lifestyles. This matters far more when millions do it.
...which makes things worse off for the individual due to the non-forgiveness that somehow exists in those loans.
DOD needs 30B to arm mercenary rebels in Syria.
Fuck education.
Sarc/off
Work for a defense contractor overseas and make loads of money. War and financials is the way of the future for the US.
Sacrifice while in school, or after. This should provide incentive to work longer, save more, and get that monkey off of your back. Drive a junker, eat cheap food, drink cheap whiskey. Americans have always done it. Don't be so entitled.
You are threatning our American Way of Life...TERRORIST!!!!!
Proudly labled as such.
They hate us for our ENTITLEMENTS!
On second thought, just stock up on whiskey.
So you're advocating suffering for no other sake than its own?
Playing the "but but entilement mentality" card doesnt make it any more valid.
Screw the screwable.
Doubling is good, right?
Don't worry, I'm sure Congress will come to the rescue with a new loan program that lets students borrow the money to pay the higher interest rates.
They are going to let the % rate double.
Know why? Because Mom and Pop middle-class still have money to be bled out of them.
Mom, can you get a third job to help me carry the new interest? Thanks, I'll be in my room of 26 years going back to class in my Jammie's. you're a dear.
Umm, Tyler, you do know that Reinhart-Rogoff was completely discredited, right? Again, basic stuff you are getting wrong.
This truly gladdens my heart! There have to be SOME consequences for Obama voters.
Not to mention some wily students could theoretically forget about going to school altogether and just arb their school loan back to the government for a profit.
Of course, that implies students know what the interest rate is on the 10-year Treasury Note and where to look it up using their new smart phone, which I doubt many of them do.
My student loan was 8% interest for the duration.
At least the Fraudulent loans that will never be paid back will be worth more on the books at the higher interest rate--and then re-hypothecated to move as much money into the banksters pockets before the collapse.
I have no student loan debt but may use it one day as a partner (my portion of a down payment) in the purchase of a house -- once the second wave in the housing market collapse hits.
My degree is in history and i'm dyslexic! Some transvestite japanese kamikaze bloke called pearl & a friend flew over the harbour into the twin towers on 9/11! or was that the iraqi war? always in a mess with the dates as my college allowed open book exams.
PAID OFF. Must be so because I am a stupid "goldbug", have been for a long time, and have no mortgage.
It's not debt slavery. It's a tax rider. Govt revenue by any other name is called taxes.
The proposal is for a floating tax rate for those with student loans.
And there is so "profit" for the government on these things since there is no P&L. They conjur a loan from nothing, the account is credited, and then you're sending them a payment stream. Anything about 4% is net cash flow in for the government, not the yield on the 10 year.
AND the nasty little secret about this is that you're never going to discharge them even if you think you're paying them off. Think the Gov't is going to manage that properly. No fucking way. Keep paying until we say you don't have to anymore.
Seems like every wanker and slag in the USA heads to college after high school. For a fraction it is for study and a real career. For most it is a drug and booze driven orgy. When they come down from the 4-5 year party, they are stuck by a reality beyond their worst nightmares.
Maybe 25% of kids who go to college need to go and benefit for their careers, the rest are wasting time and money. But America has few jobs in the industrial or technical fields, so college degree or no college degree, the bottom 75% graduate into a terrible jobs market.
Student debt is a cancer on the youth. The job market is a cancer on the youth, Simply put, the military is one of their only good options. Thus suits the elites and the war mongers in congress. American troops as back up support for Al-Qaeda's cannibal forces means work for some of our youth. Hopefully cannibalism will not spread as a fad from the US allies to our own troops.
America is clearly a nation sick in it's soul. Think about it, student debt and Al-Qaeda allies. Strange things happening in this nation!
Decay is in the air.
Welcome to the real world college grads.
Elizabeth Warren says that if government subsidizes student loans at <1% interest and lowers lending standards all the problems will be solved!
Anyone who does not understand that student debt is all about debt serfdom has not been paying attention.
OT
A Billion hits makes this site main stream, I saw my first ad for title loans.
Banks get bailed out, we get sold out!
if you can afford it debt free do it. I chased more tail, drank more beer and smoked more herb then any man should be allowed. Exited with a BS and have done better than OK. Youth is fleeting and if you can afford a 4 year vacation from reality.... why not? To aquire debt for those youthful indulgences would be idiotic It's value in my mind is entirely non-educational, that part could have been done in 2 years easy. With that BS I joined the Peace Corps and wnet to Eastern Europe to learn about Post-Communism first hand (mid-90's). Why the Fuck not.... you are only young once. But I had the means and I am not ashamed of that at all. In state school, 5 guys living in an old house... but no debt.
How old were you when you were first told, and how many times since were you reminded :
"Don't sign a blank cheque"
"Always read the contract first"
"Don't trust the other party"
"Don't leave any blanks for them to 'fill in later'"
?
Now, how many people bought something big and expensive (like, maybe, a house, or a "nejookashun") with a variable interest rate?
How many people questioned the obvious conflict here, and were told by parents or other intimate authority figures, "Don't worry about that. It'll never happen." or similar?
One solution to this problem would be to base the Stafford interest rate on the tuition cost of the college. If a college charges less than $10,000 a year total tuition, 0% interest. $15,000 a year, 2% interest. Over $15,000 a year, you are on your own. The problem isn't interest rate control, it is that tuition prices have gone through the roof in the past 20 years, outpacing the rate of inflation. Top executives at New York University take home salaries of over $500,000 a year or more, paid for by tuition fees and the salaries approved by a corrupt compensation committee. Stafford loans should not go toward subsidizing administrators who loot non-profit universities. Thieves go where the money is, to Wall Street and to the big non-profits, especially hospitals and universities.
Has Reid ever heard of provisions? Does he think 100% of student loans will be repaid? By trying to peg a zero-profit rate for the government, we the people will end up subsidizing shortfalls due to defaults which will almost certainly occur, possibly in massive scope. Screw you Reid and your Democrats for once again trying to foot the bill of an irresponsible few on all of us.
Funny isn't it, a simple few lessons while at school about finance could help these young adults for their whole life, then again ignorance is bliss (For the government) it seems.
First, for most kids college debt is no big deal and they will be able to pay it off easily. My wife and I graduated in the early 80's with monthly payments of over 300/mo. each on less than $30k/yr and managed to pay that off. For todays kids starting at around $70k/yr that and payments of $700/mo at todays rates thats aroung $65k in debt.
Any kid with less than $65k in debt - no problemo.
For the self destructive kids that refused to open their eyes to what they are getting into with excessive debt - they will learn something about responsibility and consequences.
Finally, Obama offers kids lots of ways to escape nearly all their debt by taking on some of those valuable public service jobs that also add directly to GDP - dollar for dollar. So you could say the stupid overindebted kids are patriotic.
When idiots are allowed to borrow excess money, they bid up prices and sensible people are pushed out of the market.