This page has been archived and commenting is disabled.

Student Loans Hit Record $1.08 Trillion; Delinquent Student Debt Rises To All Time High

Tyler Durden's picture




 

While the bulk of the quantity data contained in the Fed's quarterly Household Debt and Credit Report is known in advance courtesy of the Fed's monthly tracking of household revolving and non-revolving debt, the quality components always provide a welcome insight into the state of the US household. It is there that we find that the most disturbing trend in recent years: the encumbering of students with record amounts of loans continues. In fact, as of December 31, the total amount of non-dischargeable (for now) student loans hit a new all time high of $1.08 trillion an increase of $53 billion in the quarter. By comparison, total credit card debt as of the same period was "only" $683 billion. At this rate, total student loans will be double the size of all credit card debt within 2-3 years.

What's worse, while the 90+ day student debt delinquency rate did post a tiny decline from 11.8% to 11.5% in Q4, on a total notional basis due to the increase in outstanding balances, as of this moment the amount of heavily delinquent student loans has just hit a fresh record high of $124.3 billion, up from $121.5 billion in the prior quarter.

So: when does the Fed finally admit i) there is a student loan problem and ii) the only way to solve said problem is to promptly monetize it?

Finally, putting new "debt" creation in perspective, in 2013 just student and car loans alone represented 108% (that's right, more than all) of total household debt created.

Source

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Tue, 02/18/2014 - 14:21 | 4448903 VD
VD's picture

debt-jubileeeeee! (for institutions holding toxic debt, NOT for indentured debt-slaves [wit or w/out degreez])...

Tue, 02/18/2014 - 14:21 | 4448908 Looney
Looney's picture

One Tweellion? Awww... I feel so smarterer today!  ;-)

Looney

Tue, 02/18/2014 - 14:44 | 4449014 666
666's picture

Being a good citizen, I'm going to put all my money in bank accounts so the gubmint can confiscate it and solve the student loan problem.

Not!

Tue, 02/18/2014 - 14:56 | 4449074 nuclearsquid
nuclearsquid's picture

Well, if they want to drive down those 90+ DPD numbers, all they have to do is figure out a way to repo degrees.

 

Tue, 02/18/2014 - 15:04 | 4449107 zaphod
zaphod's picture

To be fair to the borrowers, what they are borrowing is not real money but funny paper money that constantly loses value and will be worthless someday. So it is not an entirely absurd thing to do (btw I have always worked to have zero debt).

The issue is people accustomed to borrowing will have no idea how to live in a sound money environment if/when the FED falls 

Tue, 02/18/2014 - 15:14 | 4449150 J S Bach
J S Bach's picture

Those dead-beat student slackers.  They're not being very good little debt slaves.

Tue, 02/18/2014 - 15:26 | 4449190 jbvtme
jbvtme's picture

i am auditing classes (geology and chemistry) at the local education camp ($60K per). i am learning the what and sometimes the how of things, but never the why. i have the same feeling that i had as a kid growing up. they're not telling the truth.

Tue, 02/18/2014 - 15:42 | 4449266 j0nx
j0nx's picture

You may be tongue in cheek but that's actually not a bad idea. If you default on student loans then you should be able to claim BK and not be required by law to pay the loan back but you also forfeit the degree. All records of you attending college should be wiped and your diploma invalid and any attempt by the borrower to claim he has a degree should be fraudulent. Treat the student loan like you would a car or a house: don't pay then you lose the collateral.

Tue, 02/18/2014 - 15:50 | 4449303 Greenskeeper_Carl
Greenskeeper_Carl's picture

there are millions of people, my wife included, who would happily do that. Here is your piece of paper back, have a nice day. the problem is that when you lose your house, the bank or whoever now has your house as collateral, which they can resell and recoup at least some of their loses. With a college degree, you can't give back the time spent 'educating' you by the 'professors' at your college. the govt gave you 50k, which you then gave to a college, so unless the college was obligated to give the money back to the govt that was spent by the borrower to get said degree, it wouldnt work. Not that I care one bit about the college or the govt losing that money. too bad your idea will never come to fruition, because millions of 20 somethings would no doubt do it

Tue, 02/18/2014 - 16:08 | 4449374 Superdude
Superdude's picture

I agree that many would hand in degree for debt forgiveness. How can a 18 year old possible know what they are going to do in two weeks, let alone for a career. I'd be willing to wager that the same people that walked away from debt associated with a bung degree would then re-enroll and get training that paid. Smartest peer was a welder first. He would work holidays at triple time. Would have been debt free except he got divorced halfway through. I asked him what the sea was like towards the end. He said he had lots of hallway see. Walked by the ex, "Fuck you" she would say, "Fuck you too" was his reply. Still laugh at that one

Tue, 02/18/2014 - 20:33 | 4450543 StychoKiller
StychoKiller's picture

Hmm, so maybe the Govt. should clawback munny paid into said educational institutions (for supplying a defective product!)

Tue, 02/18/2014 - 16:03 | 4449350 Superdude
Superdude's picture

This is assuming the banks also played fair with students. I decided to grant myself a bursary after dealing with a student loan program that got swallowed up by various other institutions. I cannot speak for others, but the contempt the bank showed me was enough to walk away from a portion of my loan owned by the final bank that screwed me over in the middle of my doctorate, to the point where I would have had to withdraw if not for help from family. I'd love to see some schmuck come and say I'm no longer a doctor because money changers are getting a dose of their own kind. While I can appreciate your thoughts, the crowd that looks for simple quick solutions without looking at or acknowledging the complexity of a situation, is usually the same crowd that takes up pitchforks and thinks burning everything down is a good idea.

 

Tue, 02/18/2014 - 17:04 | 4449645 RafterManFMJ
RafterManFMJ's picture

I'm truly saddened no one can figure out the solution to the cost of higher education:

1. Get a STEM degree.
2. Lard up on as much debt as you can while living cheaply; all excess goes into Gold Eagles.
3. Minor in Portuguese or Mandarin.
4. Upon graduation decamp for Brazil or China with a smile on your face and a jingle in your pocket.

If you cannot figure out how to avoid massive debt and penury caused by non- dischargeable student loans, that might be a tell that you should not be attending college.

Tue, 02/18/2014 - 17:59 | 4449900 Its_the_economy...
Its_the_economy_stupid's picture

i wonder if I should start a company that buys distressed student loans one at a time for STEEP DISCOLUNTS after years of failed collection attempts and then sell them back to the student at cost.

Tue, 02/18/2014 - 15:49 | 4449017 TruthInSunshine
TruthInSunshine's picture

And outstanding consumer debt is now at an ALL TIME RECORD of nearly 3 trillion (surpassing peak of 2007). Swipe those Crdit Cards & take those cash advances, debt serfs

At least this makes sense, though: University of Phoenix, Everest University, and - for that matter - ACTUAL COLLEGE GRADUATES FROM REAL COLLEGES used their federally guaranteed student loans to buy new cars so they could try & land $9 per hour part time jobs after graduating (plus, they're buying skankily advertised ObamaCare, if the administration is to be believed, so they used those loans for those premiums, too, maybe).

Alas, their non-benefits, $9 per hour, part time jobs failed to materialize in the ObamaConomy.

So I say unto thee, MOAR taxpayer-backed loans for ITT Tech, University of Phoenix and Everest University.
 

Education Connection

This chick was a waitress and now she's the chief engineer for CERN.

I'm working for an hourly wage,
I went to high school,
but I didn't do great,
Still i gotta make more cash,
more education is what im looking at
when i get a degree i will make a bigger salary
so now I've got to see
which college is right for me
i went on the internet and found
Education con-nec-tion
i took a some free tests
to find out my direction
im taking my classes in my PJs online getin my degree at my own time (9 1/2 years for an associates degree in criminal justice because she's a huge fan of Miami CSI)
Education connection
Matched me with the right college for free!
GET CONNECTED FOR FREE ( free )
WITH EDUCATION CONNECTION

Tue, 02/18/2014 - 14:22 | 4448912 fonzannoon
fonzannoon's picture

"So: when does the Fed finally admit i) there is a student loan problem and ii) the only way to solve said problem is to promptly monetize it?"

The next election some republicrat will use that as his/her/it's platform to give main street a bailout since wall street got theirs, and will be elected in a landslide.

fucking.count.on.it

Tue, 02/18/2014 - 14:26 | 4448946 Harbanger
Harbanger's picture

Why a republicrat?  That's a democrat play to win over the now disenchanted obamabots.   You have no idea which end is up do you?

Tue, 02/18/2014 - 14:27 | 4448950 fonzannoon
fonzannoon's picture

A republicrat because it will be one or the other, because they are one in the same. You will figure that out one day.

Tue, 02/18/2014 - 14:30 | 4448961 Harbanger
Harbanger's picture

Clueless Fonz.  Nobody is going to outgive the Democrats.

Tue, 02/18/2014 - 14:32 | 4448967 fonzannoon
fonzannoon's picture

That hamster wheel will start turning one of these days. I don't know what happened to you, but I believe in you.

Tue, 02/18/2014 - 14:33 | 4448976 NOTaREALmerican
NOTaREALmerican's picture

How many "conservatives" have ever wanted to cut the following Big-Gov scam:  Big-Ag, Big-MIC, Big-Road, Big-Water, Big-Airport, Big-Energy, Big-House, Big-Fin, Big-OldFart, Big-OldFartHealthcare, Big-AntiDrug, & Big-PoliceState.

You right that Democrats love all Big-Gov scams, but the Republicans ("conservative") have always loved Big-Gov too,  but they like manly Big-Gov.

"Liberals" like all Big-Gov, and "Progressives" like girly Big-Gov, and "conservative" like manly Big-Gov.

People vote with their genitals.

Tue, 02/18/2014 - 14:36 | 4448984 Harbanger
Harbanger's picture

Fuck you and your everyone is in on a Goverment scam shit.   You don't know any conservatives.  You only know republican scumbags like yourself.

Tue, 02/18/2014 - 14:39 | 4448992 NOTaREALmerican
NOTaREALmerican's picture

Re:  You don't know any conservatives

Are you talking about "conservatives" who routinely want Big-Gov to regulate how people use their genitals?

OR are you talking about the 5 or 6 actual Conservatives that exist someplace?

Most of the Republican "conservative" I met love Big-Gov.

Tue, 02/18/2014 - 14:43 | 4449011 Harbanger
Harbanger's picture

They're all republican scumbags, you never met a conservative.  They will be the only survivors after the social collapse.

Tue, 02/18/2014 - 14:48 | 4449033 NOTaREALmerican
NOTaREALmerican's picture

Re:  They're all republican scumbags, you never met a conservative.

If Republicans aren't conservatives then they are like Democrats.   Isn't that what you disagreed with first time?

We've only got Big-Gov loving Repubicrats.  

Tue, 02/18/2014 - 16:20 | 4449439 TruthHunter
TruthHunter's picture

Definition of Republican: Someone who votes tax cuts for the super rich in the vain

hope he will some day be one of them.

Tue, 02/18/2014 - 14:44 | 4449015 pods
pods's picture

Conservative is the term used to describe someone running for office on the Republican ticket.

Which, when elected, promptly forget everything they promised.

pods

Tue, 02/18/2014 - 14:46 | 4449026 Dr. Engali
Dr. Engali's picture

"Which, when elected, promptly forget everything they promised".

 

I define that as: any political asshole seeking power.

Tue, 02/18/2014 - 14:51 | 4449041 onewayticket2
onewayticket2's picture

Harb is generally correct.  what you THINK is a 'conservative' is some guy like joe scarborough....who says he's a "conservative" about 10X a day and proves he's not about 100X a day.

self sufficiency, minimal govt, personal responsibility not transfer payments. 

Tue, 02/18/2014 - 14:55 | 4449062 fonzannoon
fonzannoon's picture

Ha funny. Thank you both so much for telling me what I think.

Tue, 02/18/2014 - 14:59 | 4449089 Harbanger
Harbanger's picture

You sure Jon Stewart ain't telling you what to think?

Tue, 02/18/2014 - 15:08 | 4449122 fonzannoon
Tue, 02/18/2014 - 15:23 | 4449120 Dr. Engali
Dr. Engali's picture

I used to believe that bullshit too, until I watched how the "conservatives" lined up lockstep behind Bush as we bombed the shit out of a country that was of absolutely no threat to us. I also see the conservative hypocrisy when they turn to government to regulate every aspect of what a human does with their body. Why do I care if two guys want to get married, or if somebody wants to smoke a bowl. What the fuck good has the war on drugs brought us besides more crime and a bloated prison system, and what the hell is .gov doing in the marriage business to begin with? Conservatives are just as statists as the liberals are. They just don't like to admit it.

Tue, 02/18/2014 - 15:36 | 4449245 onewayticket2
onewayticket2's picture

Bush isnt a conservative. he's republican.

Tue, 02/18/2014 - 15:43 | 4449267 Dr. Engali
Dr. Engali's picture

No fucking shit, but you didn't see any conservatives questioning him. They were the loudest war drum beating suckers of them all.

Tue, 02/18/2014 - 15:43 | 4449278 pods
pods's picture

See my definitions above. Can describe about every "conservative" that got to high office or a leadership position in the house or senate.

Outliers act as safety valves, see Ron and Rand Paul, etc.

Whole system is run to keep you thinking you can change the course you are on.  

If you didn't have tha belief, you would have to vote with the ammo box.

pods

Tue, 02/18/2014 - 14:51 | 4449043 Never One Roach
Never One Roach's picture

The Yutes are merely imitating Wall Street Bankers, CEOs, politicans, etc. porking the system, so they figure, "Why not me also?"

Wed, 02/19/2014 - 00:03 | 4451379 Yes_Questions
Yes_Questions's picture

 

 

Thank you Doctor.

 

+clarity

Tue, 02/18/2014 - 14:43 | 4449006 fonzannoon
fonzannoon's picture

I'm not going to insult you back. You are confused and are just lashing out. I can't help you. Here try this.

http://www.zerohedge.com/contributed/2014-02-17/transcendence

Tue, 02/18/2014 - 15:59 | 4449334 Greenskeeper_Carl
Greenskeeper_Carl's picture

i really can't believe we are having this conversation here. You would think that people who want to come here and read these articles for a couple years would have given up on the fiction that there is a dimes worth of difference between the two parties. They both love their welfare. To see people here defending republicans as being above that sort of thing is hilarious.

Tue, 02/18/2014 - 14:44 | 4449012 Dr. Engali
Dr. Engali's picture

It's funny how the "limited government conservatives" always want to turn to government when they want to regulate people's lives.

Tue, 02/18/2014 - 14:53 | 4449051 onewayticket2
onewayticket2's picture

then vote libertarian....and tell your friends to as well.....geez.

Tue, 02/18/2014 - 15:20 | 4449173 Harbanger
Harbanger's picture

Since I have more than enough money in the US and phys in Hong Kong to save my ass for 3 generations.  I'm voting and donating money to the most progressive Democrats I can find from here on in just to bring it to a head.

Tue, 02/18/2014 - 15:30 | 4449220 fonzannoon
fonzannoon's picture

well at least it explains why you were such a big hit with the lesbians at that bar.

 I'm going to keep going with the funny until you lighten up. 

Tue, 02/18/2014 - 15:33 | 4449235 Dr. Engali
Dr. Engali's picture

 "I'm going to keep going with the funny until you lighten up."

 

Let me know when you start :)

Tue, 02/18/2014 - 15:39 | 4449259 Harbanger
Harbanger's picture

Most chicks happen to be very superficial and are dazzled by good looks, lesbo or not.  Your country and society is headed down the toilet.  What's to lighten up about?  Note I said your country because I'm not even American, yet I understand your constituion and feel for all the good people here that will be hurt by the progressive downturn.

Tue, 02/18/2014 - 15:44 | 4449276 fonzannoon
fonzannoon's picture

the progressive downturn that you are heavily funding.....

 

Tue, 02/18/2014 - 15:51 | 4449309 Harbanger
Harbanger's picture

Yep, from here on in.  I'm not fighting for you bitchez anymore,  may as well be on the winning side.

Tue, 02/18/2014 - 16:02 | 4449346 fonzannoon
fonzannoon's picture

You are not an american, you are heavily funding the progressive agenda because you want to be on the winning side. 

this is quite a puzzle we are putting together here.

Tue, 02/18/2014 - 15:01 | 4449098 Harbanger
Harbanger's picture

Are you talking about gay marriage and abortion?  Is that really your biggest fucking concern?

Tue, 02/18/2014 - 14:42 | 4449003 Dr. Engali
Dr. Engali's picture

For some odd reason I thought you to be much brighter than this.... until now. You really have no idea what's going on do you? I have a question. How many elections are the repukes willing to lose just to get rid of that pesky tea party?

Tue, 02/18/2014 - 14:52 | 4449049 Harbanger
Harbanger's picture

The republicans will never win again .  America will inevitably collapse into a socialist shithole because their is "no differnce".  Are you prepared for fight or flight?  holding gold inside a totalitarian capital controlled US is about as smart as holding gold in Argentina or Venezuela.

Tue, 02/18/2014 - 15:02 | 4449100 NOTaREALmerican
NOTaREALmerican's picture

Re:  Are you prepared for fight or flight?

Some people think a country is like a fraternity; which deserves undieing loyalty (or dieing loyality in most cases).

Other people - the smart-n-savvy ones - realize a country is just another way to screw the dumbasses.

And still other people realize there are people smarter-n-savvyier than themselves.

Everybody is going to die.   The really really smart ones move to the country that has the best stardard of living. 

Tue, 02/18/2014 - 14:57 | 4449078 Agstacker
Agstacker's picture

Or a Demican.

Tue, 02/18/2014 - 15:06 | 4449116 HardAssets
HardAssets's picture

Personally, I just refer to them all as demorepublicraps

Tue, 02/18/2014 - 14:43 | 4449008 _ConanTheLibert...
_ConanTheLibertarian_'s picture

How the fuck did you end up here? Took a wrong turn?

Now that you're here, educate yourself and be ashamed.

Tue, 02/18/2014 - 15:12 | 4449127 HardAssets
HardAssets's picture

"I spent three days a week for 10 years educating myself in the public library, and it's better than college. People should educate themselves - you can get a complete education for no money. At the end of 10 years, I had read every book in the library and I'd written a thousand stories." - - Ray Bradbury

Tue, 02/18/2014 - 14:22 | 4448920 Rick Blaine
Rick Blaine's picture

I can't wait for someone (e.g.,Obama) to (again) suggest that we (further) raise the limit on federally-backed student loans...

...because that will CLEARLY fix the problem.

 

 

Tue, 02/18/2014 - 15:27 | 4449207 doctor10
doctor10's picture

between mandatory ObamaCare and their student loans which legally are non-dischargable-these kids are between a rock and a hard place.

Tue, 02/18/2014 - 14:21 | 4448905 ebworthen
ebworthen's picture

I can't count on my fingers and toes the # of people I know who pay rent + utilities and buy food with student loan money.

Tue, 02/18/2014 - 14:27 | 4448926 Grande Tetons
Grande Tetons's picture

Kinda sad, EB...when you think about it, all the students really need is their own printing presses and they would be A OK. 

Tue, 02/18/2014 - 14:44 | 4449005 graneros
graneros's picture

I know only one but he is definetly living on stiudent loans and plans to do so for the rest of his life.  He is 50 has 2 years of college, takes 2 courses per semester (summer included) and figures he can milk it all the way through a phd sometime in his 60's.  He owns his home and deosn't require much to live.  The way he figures it either the gov will forgive all student debt (probably), or he'll die before he even has to worry about it.   By law the gov can't kick him out and take his home and the worst case scenario is he'll find a job upon graduation which with a PHD should pay at least 60 or 70 K a year and he'll pay them back.  He could pay half that paycheck to the gov and still be bringing in more money than he does now. Sounds to me like he has it gamed.

Tue, 02/18/2014 - 15:12 | 4449141 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Your friend has one problem. They don't hire 60-year-old newly minted PhDs. He is good up to that point. 

Tue, 02/18/2014 - 15:51 | 4449304 graneros
graneros's picture

No it is not a problem. Being hired is his "worst case scenario." He, like you and me, is pretty sure he won't get hired in his 60's in which case he'll then live on SS instead of student loans.  What I didn't mention is that not only is he getting these student loans for school but the actual classes he takes are all being paid for by grants and other aid. He simply pockets the loans and makes sure he maintains at least a 3.0 average.  It truly is amazing.

Tue, 02/18/2014 - 14:45 | 4449022 tradebot
tradebot's picture

"I can't count on my fingers and toes the # of people I know who pay rent + utilities and buy food with student loan money."

Have two more right here in my office...like everything else the dems touch...FUBARB

Tue, 02/18/2014 - 14:21 | 4448906 Dr. Richard Head
Dr. Richard Head's picture

We don't need no debtfiscation.  We don't need no printer control...

Hey Yellen.....leave those kids alone!!!!

Tue, 02/18/2014 - 14:31 | 4448965 Son of Loki
Son of Loki's picture

Why pay when you can simply enjoy life, buy another iPad and wait for the coming, "Education Restoration and Reconstruction Act," aka, Student Loan Bailout Bill.

Tue, 02/18/2014 - 16:54 | 4449605 RafterManFMJ
RafterManFMJ's picture

Fellow Citizen!

You cannot pay your student loans! Fear not, join The Federal Urban Benevolent American Responders!

You will teach in the inner city, clean streets, man checkpoints, and toil on glorious new Autobahn!

After 20 years you will be debt free, and receive a small stipend!

Forward, into the Future!

Tue, 02/18/2014 - 14:21 | 4448907 tickhound
tickhound's picture

Cuz the more debt we have, the more "money" we have... The more money we have, the more debt we have. It's a wonderful relationship with many correlating graphs.

Why mess that up?

Tue, 02/18/2014 - 14:22 | 4448914 Divided States ...
Divided States of America's picture

Why worry about these debt/loans when most students will eventually be put into service and become the casualties of the upcoming WWIII. Much like the older generation, the death of the younger generation and the oldest generation just cleans the slate in terms of future government liabilities.

Tue, 02/18/2014 - 14:22 | 4448918 libertus
libertus's picture

 

The only way out is to completely redesign the system. Oplerno.com is the answer. 

Tue, 02/18/2014 - 14:29 | 4448954 tickhound
tickhound's picture

If "affordability" is your ONLY solution, you've already failed.

There are plenty of solutions being presented that DONT involve maintaining "awareness" as something proprietary.

Tue, 02/18/2014 - 14:23 | 4448925 Cannon Fodder
Cannon Fodder's picture

Student loan debt is evil and is modern day slavery...

Tue, 02/18/2014 - 14:37 | 4448982 Grande Tetons
Grande Tetons's picture

They made it so easy that the slaves walked aboard the ships with smiles on their faces. 

Tue, 02/18/2014 - 14:45 | 4449019 Dr. Destructo
Dr. Destructo's picture

Or say: "You need a Bachelor's degree to get a job that required only an associates degree in the past".

 

Tue, 02/18/2014 - 14:25 | 4448942 tallen
tallen's picture

Seems like everyone nowadays has a First Class honours degree in being a slave to a bank.

Tue, 02/18/2014 - 14:33 | 4448957 Quinvarius
Quinvarius's picture

But no.  The Fed will not take a month of QE and buy this crap and tell people it is all paid off..  Free money is only for banker parasites.  The money hose is never big enough for another mouth to get a sip.  It is for pigs and failures only.

And before you assume, I had a full ride.

Tue, 02/18/2014 - 14:29 | 4448959 Duc888
Duc888's picture

 

 

 

Nothing to worry about.  Fedgov will print more, hire these young adults as Brownshirts and come out smelling like a Rose when they knock unemplyment numbers down.

 

See how easy that is?

Tue, 02/18/2014 - 14:31 | 4448962 LordAarioc
LordAarioc's picture

Didn't Libya have Universal Free Education before we Liberated it and started a bank that charged Interest 3 days after we killed him?. 0% interest Usurey Laws. They also had Universal Healthcare subsidized Gasoline 15 cents a gallon. What a country! Gone the way of the Dinosaur when the TPTB took him down.

Tue, 02/18/2014 - 14:38 | 4448983 Quinvarius
Quinvarius's picture

They will realize what happened when we force them into Obamacare because no healthy American's will buy it to cover the cost of 50 crack heads' medical problems each.

Tue, 02/18/2014 - 14:44 | 4448972 tarsubil
tarsubil's picture

This is ponziomics!

They figured out how to fix the rising percentage of deliquent loans. Just increase the denominator. Makes perfect sense to dramatically increase student loans when delinquencies have increased by 50% in the last couple years. 

Tue, 02/18/2014 - 14:33 | 4448973 q99x2
q99x2's picture

Up my FAFSA. Yellen motha fukka. Spring semester starts in a few hours.

Haven't had to take any loans. Mostly students with habits have to take loans.

The banksters are out of their freaking minds if they expect to be paid back.

Tue, 02/18/2014 - 14:51 | 4449028 Dr. Destructo
Dr. Destructo's picture

Shut down the presses and put it all on the tab of the banks we bailed out.

If there is a deficit whore out the likes of Jamie Dimon to cover it.

Tue, 02/18/2014 - 14:37 | 4448985 Pee Wee
Pee Wee's picture

Whats with the author's incompetent questions?

Everyone knows "the Fed" doesn't see a thing.  Eyes closed, heads down, screaming lalala just like Fascism (debt-banking).

"Shut up and take out a loan, free-market believer!"

The future of anyone under 30 has been mortgaged, as in gone.  Pick a racket - investments, education, insurance, real estate - it's all 100% synthetic bullshit from a printing press.

Now, eyes closed, suckers, record bonuses don't apply to truth tellers.

Tue, 02/18/2014 - 14:44 | 4449016 NOTaREALmerican
NOTaREALmerican's picture

Re:  record bonuses don't apply to truth tellers

Or,  said the corporate way:   People who aren't team players.

The secret of success is duplicity.   The secret of happiness is self-delusion.

You can separate the children from the adults by how they deal with duplicity.

Tue, 02/18/2014 - 14:36 | 4448987 forrestdweller
forrestdweller's picture

at 80 billion a month, the problem will be gone in no time.

Tue, 02/18/2014 - 14:39 | 4448994 RabbitChow
RabbitChow's picture

Yah, I'm thinking this is just another year or so of QE.  It's QE, Student version.  A trillion here, a trillion there...

Tue, 02/18/2014 - 14:43 | 4449009 DavrosoftheDaleks
DavrosoftheDaleks's picture

My neighbor's daughter was accepted to NYU to study speach pathology.  She was so excited and he, a baker who owns his own small bakery, was crushed, as she could go to West Chester University for something like 20k less a year and still go to a good program.  How insane is it that a bank/government will be in debt over $220k with her with no collateral, yet if I went to a bank and just said, give me $55k a year for the next four years so I can  trade, there would be no chance as I would have to post collateral to start the loan.   Education loans are such a f'ing scam.  She'll probably get a job right out of college, but still, it's nuts the scam colleges and student loan operations have on society.

Tue, 02/18/2014 - 14:45 | 4449023 NOTaREALmerican
NOTaREALmerican's picture

Re:  her with no collateral

Her life (soul) is the collateral.  You can't discharge them.

Tue, 02/18/2014 - 14:51 | 4449044 MagicMoney
MagicMoney's picture

I know a young woman who I warned about the student loan debt. She actually wanted to go to a University of Austin. People don't realize how expensive something is until the bills start coming. She went to the military to get educated instead of going to University of Austin. The wars are winding down in Iraq, and Afghanistan, so it may have been the best situation in her case. Student loans lead people to make bad decisions, worse yet, those student loans are not dischargeable.

Tue, 02/18/2014 - 15:24 | 4449188 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

MM, as an alum of UT Austin it is quite a good deal compared to the Ivies and other commie infested colleges. When getting a degree it pays to be smart. Get a STEM degree or professional degree from a good state U. Liberal arts and humanities from anywhere is just a waste of time.

Tue, 02/18/2014 - 15:34 | 4449228 MagicMoney
MagicMoney's picture

Well obviously you have a bias in favor of UT of Austin. I never said UT Austin was a bad school. I simply informed her of the prospects of student loans. She wanted to study sociology. I don't know how much UT Austin costs in tuition, but she wanted to be degreed in sociology. I told her she may be paying a lot of money for education for a job that she may never have, or a job she does want, but does not pay a lot of money that offsets the expenses of that student loan. That's what I told her. I didn't tell her to go the miiltary either, she made that choice herself without any direct input for her to join the miitary. I told her what student loans is about, she made the best possible decision. The government, and academia always like to push student loans on poor kids who have no idea what they are getting into. Of course they are only interested in making more money. I simply informed her as a consumer.

Tue, 02/18/2014 - 14:47 | 4449027 pashley1411
pashley1411's picture

I think it more interesting, in a macro sense, the % of consumer debt to government entities, to the % of consumer debt to private.

It would be nice to see a chart over time that, as the economy continues down the socialist/collectivest path, credit creation is an interesting proxy indicator.  

While the collectivists scream about the effect of private greed on the economy (MSNBC on in the gym yesterday; shoot me in the face, please), a ready rejoiner may be % and amount of debt to public entities.   And the chart leaves out the big cajones; the IRS and all of its mini-me's.

Tue, 02/18/2014 - 14:53 | 4449052 NOTaREALmerican
NOTaREALmerican's picture

Re:  as the economy continues down the socialist/collectivest path

Does the top 10% care?  They own the corporations and the government.    The winners are the top 10% regardless.

Tue, 02/18/2014 - 14:49 | 4449034 Bangin7GramRocks
Bangin7GramRocks's picture

If you go to the right college, the loans are worth every penny. Swinging dicks at Miami and Arizona State will happily write the check for 20 years as they remember fondly the 4 years of all you can eat buffet meals, endless parties and all the pussy your cock could handle.

Tue, 02/18/2014 - 14:52 | 4449036 Kirk2NCC1701
Kirk2NCC1701's picture

So many promises. So many promising lives to enslave.  Er, I mean 'employ'.

Bankster Rules:

   Debt = Promise of Labor (past, present of future), collateralized by real assets. 

Bankster Game:

   If they can't keep their promises, collect the collateral. 

Bankster Strategy:

   Encourage them and the culture to make more promises than they can deliver.   Let time and other games do its thing, then collect on the Debt.  Note that Student Loans can NOT be washed away with Bankruptcy.  Debt remains.  QED. 

[Mr. Rogers voice] "Boys and girls, can you say Neo-Feudalism?  Sure, I knew you could."

Tue, 02/18/2014 - 14:53 | 4449054 Jack Burton
Jack Burton's picture

It is not just the debts young people enter the job market and real adulthood holding, it is also the jobs market they enter. Unless they find government employement, as some will do, they enter a job market with falling real wages. Jobs creation has come back a little, but figures show that all that growth is in low income jobs. Simply put, a 24 year old with 30K in student loans and just got a job at a retail outlet or got an production job at a car plant, or even broke into teaching high school, no matter. In 2014 his income will be 20K at the retail outlet if full time, 30K to start in the car plant and maybe 35K at the high school he teaches for.

After said person pays his federal, state, local taxes, liscense fees, car insurance, health insurance, dental bills, clothes for work etc. Will he or she be buying a house soon, starting a family soon, moving out of the parents house soon.

Best case scenario is he finds a girl to marry who works, then they can make it to lower middle class with two jobs. Those two jobs combined will pay about what 1 job payed 30 years ago. But the man and woman combined might be looking at 60-80K in student loans jointly, and of course the woman will come with 15K on credit cards.

I hear stories, lots of them, of engaged couple fighting over how big of a debt burden their lover may have. I know of a case where the guy is free and clear, the 26 year old woman is up to her lips in debt. Student loans, car loan, credit card and unpaid medical bills. Perhaps north of 100K, so he marriers her, he gets all her love and all her debts. Man, that would make me think twice, how about you???

I've said this before, but, "People and corporations have lost sight of what they need most to succeed in a business, customers with disposable income". The race to the bottom with wages, that many think is great, kills the consumer that business advertizes to and trys to ensnare as a free spending customer." Low wages = poor consumer = no customers. How does that work for corporate profits, or one's small business???

Tue, 02/18/2014 - 15:19 | 4449160 MagicMoney
MagicMoney's picture

Real disposable income comes from cheaper prices. Unfortunatey the government seems to think that higher prices are key to economic growth. Government involved in education means higher education costs. The more you subsidize one thing, the more you get. There is no cost control on top of that. In a free market, consumers control costs, they look to cheaper prices, or cost substitution. A lot of high costs of education, health care are result of poor government policy that neglects cost containment in the US. There is a balance in a economy. Too much debt is constrained by people wanting to save thier money. The controls of excess credit. Same goes for prices. Problem is government give incentives for consumers to consume without reference to prices. There is a reason why we have prices in the first place, so we can make economical decisions. Government is largely anti-economical when it comes to policy. When you have government and business together, it's no wonder you get such bad imbalances, high prices of some goods, versus others. The argument for these type of programs is always the same, without student loans, how will low income kids go to college? Well how does anybody afford anything in the first place, they look for cheaper prices, and servicers, and producers have incentive to provide low cost goods, and services, they look for alternative ways to finance their way to afford such things.

Tue, 02/18/2014 - 14:58 | 4449084 youngman
youngman's picture

A lot of that Student Loan money went to pay off Credit Card debt I bet.....

Tue, 02/18/2014 - 16:13 | 4449406 denverdolomte
denverdolomte's picture

"...debt I bet..."

 

Better watch out Soros didn't trademark that. lol

Tue, 02/18/2014 - 15:06 | 4449112 pragmatic hobo
pragmatic hobo's picture

slaves, all of 'em ...

Tue, 02/18/2014 - 15:09 | 4449123 Colonel Klink
Colonel Klink's picture

Row faster slaves!

Tue, 02/18/2014 - 19:48 | 4450294 Dr. Destructo
Dr. Destructo's picture

We keep you alive to serve the economy -spend well, and live.

Tue, 02/18/2014 - 15:12 | 4449140 CitizenPete
CitizenPete's picture

Take wat u ken git bois, kaus its going fast. Happy National Wine Day.

Tue, 02/18/2014 - 15:12 | 4449144 orangedrinkandchips
orangedrinkandchips's picture

They were burning draft cards in the late 60s....

 

I can see them burning loan statements in the late teens.....

Tue, 02/18/2014 - 15:25 | 4449191 SubjectivObject
SubjectivObject's picture

It's yet another variant of a land grab by the banksters that be (TBTB).

Based on talking to parents with kids on collarage loan meth, they cosigned for the loans.

So, what happens when cash strapped everybody can no longer cover their hope-for-the-future's loan debt?

Every body gets evicted.

Tue, 02/18/2014 - 15:25 | 4449192 BringingTheRukus
BringingTheRukus's picture

Soon, kiosks will trump tenure.

Tue, 02/18/2014 - 15:30 | 4449219 IridiumRebel
IridiumRebel's picture

Go get your fuckin' pen, Mr. Prez! 

Tue, 02/18/2014 - 15:35 | 4449242 FieldingMellish
FieldingMellish's picture

Do as your government does... get a loan to pay your debts.

Tue, 02/18/2014 - 15:39 | 4449255 TrumpXVI
TrumpXVI's picture

$1.08 Trillion...........it's the weather.......right?

 

Do I win anything?

Tue, 02/18/2014 - 15:40 | 4449263 Bryan
Bryan's picture

Don't worry, students, ol' Uncle Sam has your back.  Get as much as you can for free and party on.  Someone else will pay for it, no problemo.

Tue, 02/18/2014 - 15:52 | 4449302 22winmag
22winmag's picture

Where is the chart for rising student loan suicides?

 

https://www.google.com/#q=%22student+loan+suicides%22

Tue, 02/18/2014 - 16:09 | 4449377 MarcusAurelius
MarcusAurelius's picture

I would be the last one to say to anyone that education is not important because it is. It is what you pay for it and what your return is that is the most important consideration. 

What this says is that there is very little return for most on their expensive educations. It tells me that there is something grossly wrong with the current model. 

Tue, 02/18/2014 - 16:11 | 4449391 hugovanderbubble
hugovanderbubble's picture

Another Blackswan coming = Student loans

Tue, 02/18/2014 - 19:31 | 4450230 QE49er
QE49er's picture

In Amerika here, we like to point loaded guns at our heads

Tue, 02/18/2014 - 19:54 | 4450332 I need Another Beer
I need Another Beer's picture

I graduated in 2012, paid in full my SD in full 4 mos later. Many of my classmates that failed stayed in school because they said they could live better on SL than they could working for a living. I don't fault them since they have no idea the world they reside in. I do.

Got water, got food, got a pigplex and thousands of exciting projectiles.

Oh, I have no mercy for blue bellies

Wed, 02/19/2014 - 05:35 | 4451729 dreadnaught
dreadnaught's picture

i feel sorry for my sister, after working for 25 years in the county of Marin, she decided at 50 to quit, to leave a loveless mairrage (kids already gone) and start training as an RN. At the time it seemed a good idea. By the time she graduated, there was nothing-she gets crappy filing or Nursing Assistant jobs (changing diapers at $25 an hour) these wages wil pay for nothing in the Bay Area, and she doesnt always get to work full time. Turns out, when CA took away all retirement benefits, NOBODY RETIRED, and now sucessive loads of new graduates wait at the locked gate. She owes $100,000 on her Student Loan.......and i see all these training schools advertising "great opportunities" and "swell futures ahead" Thank God she and her ex were.  able to sell thier house during the crisis AT asking price, in 2 weeks to the first and only couple to come along.....after that it was total collapse-but she got outta that one-with my constant ragging her. At least she has quit bying the latest Android, Kindle and Window toys.....which her kids are glued too

Sun, 03/02/2014 - 11:18 | 4496960 Fepericzer
Fepericzer's picture

Student loan delinquency is actually lower than delinquency on most other types of consumer debt, except for prime mortgages. Why does a seemingly-innocuous metric such as Percent of Balance 90+ Days Delinquent mask this reality? The answer is the vast majority of education loan (student, parent and consolidation) debt is in the federal student loan programs: Direct, Guaranteed (FFEL), and Perkins. In consumer lending, delinquent debts are charged off, typically after less than six months of delinquency. In federal lending, delinquent debts become defaulted after a year and are NEVER charged off. Uncle Sam has so many collection tools available that there is no reason to charge off.

How does this mess up the delinquency comparison? For typical consumer loan products (automobile loans, mortgages, credit cards, and personal loans), the definition of delinquency used by Federal Reserve Bank of New York (FRB) includes, at most, accounts 91-180 days delinquent. For federal student loans, it includes accounts 91 days to 20 YEARS delinquent. An apples-to-apples comparison would include only delinquencies 91-180 days delinquent. If that adjustment seems too generous, then 91-360 days delinquent would include the delinquencies and exclude the defaults. In federal student loans, delinquency and default are very different and also differ from how these concepts are used on other types of debts.

Note that the complete version of the FRB's Quarterly Report on Household Debt and Credit now discloses on the first page (“Household Debt and Credit Developments in 2013 Q4”) that student loan delinquency actually includes balances “delinquent or in default.”

Even if the FRB fixes its charts, the value of calculating delinquency by borrower (or by "account") only tells part of the story. Because borrowers with small debts default at much higher rates than borrowers with large debts, the delinquency & default rates by borrower are much higher than the corresponding rates by dollars. Why are borrowers with small debts overrepresented amount the delinquent and defaulted populations? Students who complete a certificate or degree rarely default. Students who "persist" (advance in their postsecondary education from one term or year to the next) rarely default. Default is highly correlated with non-completion. Higher debts, all other things equal, represent success at persisting in and completing a postsecondary education program.

(1) Price of college and (2) education loan debt have both been serious issues for a long time. Why have the last few months seen a united theme from (1) the financial services sector, (2) their regulators, and (3) the financial press -- the trumpeting of an unsubstantiated fear that education debt will, at least in the long term, reduce the ability of Americans to obtain mortgages, car loans and credit cards?

Two major reasons. One is economic. Some in the financial services sector are honestly concerned that their future pool of future customers will decline. The financial regulatory agencies reflect the views of their friends in the financial services sector and on Wall Street. In fact, it is not just their friends, it is themselves. These agencies have among the highest prevalence of revolving door syndrome. Some of them even trumpet the benefits of the revolving door: "Only insiders can understand the most current, most sophisticated financial techniques and instruments." "You need a wolf to catch a wolf." Even the well-known Madoff whistleblower Harry Markopolos has used these rationales to justify staffing agencies such as SEC with industry insiders. Of course these arguments are not at all relevant to federal student loans, which has been a completely-regulated industry for six decades and where the most in-demand candidates for executive positions have been those with influence in Washington, DC. The bottom line is that no one in any business wants to lose future customers, and economic interest has always been an incentive to shade the facts.

The second is driven by both economic and historical/cultural factors. From 1966 to 2010 federally-guaranteed lenders had a very profitable market sector. Starting 7/1/2010, all new federal student loans were Direct Loans. Statutory authority for new guaranteed lending (FFELP lending) ended 6/30/2010. You can bet that, if lenders still had 75 to 80 percent of the federal market, as they did as late as 2008-2009, there would be no buzzing about education debt burden impacting home purchases, car purchases, and even marriage. This is the type of "fear, uncertainty and doubt" campaign against Direct Loan that the lenders succeeded strongly at during the late 1990s. Direct Loan, originally a conservative idea in the late 1980s, was enacted as a small pilot program during the last year of President George H.W. Bush's administration.

As part of the major omnibus budget reconciliation enacted in August 1993, Direct Loan moved from small pilot to a full-blown competitor to FFELP, with full phase-in scheduled by 1999. President Clinton thought he was pushing public service and direct lending as a common-sense, third-way program, but Clinton was such a polarizing figure that Direct Loan was permanently tagged as "a Democrat program." What's worse, the Clinton people grossly underestimated the rear-guard offensive capability of the FFELP lenders and their allies: guaranty agencies as well as key figures in state government, Congress, and the college sector, including the HBCUs.

While nagging dissatisfaction with FFELP let to a quick uptick in Direct Loan participation by colleges during the first couple of years of operation. Lobbying the lenders, guarantors and other lobby groups, combined with the GOP take-over of both houses of Congress, led to a repeal of the concept of 100% phase in of direct lending. While Direct Loan was not de-authorized, it was saddled with all manner of handicaps in competing against FFELP.

Thus the analysts, lawyers, economists and executives at the FRB, FTC, CFPB, and on Wall Street can never begin to effectively analyze education debt issues until they begin to understand the 1995-2010 "cold war" between FFELP and Direct Loan. Anti-DL lobby groups like NCHELP/NCER, CBA, EFC, ASF and others have not disappeared. Nor have the millionaires created by FFELP over the past few decades. They have the resources to spend their time trying to blame many/most of today's student loan debt issues on the 2010 transition to 100% direct lending. While that is of course not the only theme in the recent articles about student debt, there is a repetitive meme from advocates for lenders, secondary markets and guaranty agencies that the CFPB should not focus all its consumer protection efforts on private loans, because federal loans have 85% of the market (these "critics" are forgetting that CFPB's jurisdiction probably only covers the private loans). More tellingly, we never read in the financial press of a repentant FFELP executive blaming todays student debt issues on the legacy of FFELP. It is always, either by word or by implication, a slap at Direct Loan.

The bottom line is that the "education loan delinquency is high" and "student loan debt will impact home and car purchases" stories are concocted by Wall Street, making those who accept them uncritically their partners with the financial services industry in deception.

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