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What Student Loans Are Really Used For: The Depressing Case Studies

Tyler Durden's picture


Some of our readers may have missed our post from September 2012 in which we showed that far from being used for their generally accepted purpose, student loans - now well over $1 trillion and more than the total credit card debt outstanding - in numerous instances are instead abused to fund virtually everything else besides paying for tuition. Recall: "Robert Thomas Price Jr. borrowed about $105,000 for his tuition at Harrisburg Area Community College from 2005 and 2007, federal authorities say. It doesn’t cost anywhere near that much to study at HACC, though. So Price, 45, of Newport, is facing federal student loan fraud and mail fraud charges. A U.S. Middle District Court indictment alleges that Price spent much of the loan money on crack cocaine, cars, motorcycles, jewelry, tattoos and video games."

At the time many derided this case study as an isolated example of fund abuse by an isolated individual. Nearly two years later, a study by the WSJ confirms what most have known: far from an isolated incident, "student" loans have become a primary source of funding for an every greater portion of the US population, and that when looking at total credit creation in the US economy, non-revolving student debt has as much if not more relevance than mere revolving credit, when it comes to determining how pays for what.

The WSJ takes on a more conservative tone when it says that "some Americans caught in the weak job market are lining up for federal student aid, not for education that boosts their employment prospects but for the chance to take out low-cost loans, sometimes with little intention of getting a degree."

Unfortunately, its examples demonstrate a pervasive culture of monetary abuse, which has become as rampant, if at a much lesser scale, as what the TBTF banks have been acused of doing in order to perpetuate the illusion that they are solvent - indirectly taking from taxpayers to fund an unsustainable lifestyle. Taxpayers, who will end up with massive losses on their involuntary "investment" in either case.

Take Ray Selent, a 30-year-old former retail clerk in Fort Lauderdale, Fla. He was unemployed in 2012 when he enrolled as a part-time student at Broward County's community college. That allowed him to borrow thousands of dollars to pay rent to his mother, cover his cellphone bill and catch the occasional movie.




Tommie Matherne, a 32-year-old married father of five in Billings, Mont., has been going to school since 2010, when he realized the $10 an hour he was making as a mall security guard wasn't covering his family's expenses. He uses roughly $2,000 in student loans each year to stock his fridge and catch up on bills. His wife is a stay-at-home mother who also gets loans to take online courses.


"We've been taking whatever we can for student loans every year, taking whatever we have left over and using it to stock up the freezer just so we have a couple extra months where we don't have to worry about food," says Mr. Matherne, who owes $51,600 in federal loans.


Some students end up going deeper into debt. Early last year, when Denna Merritt lost her long-term unemployment benefits, the 49-year-old Indianapolis woman enrolled part-time at the Art Institute of Pittsburgh's online program, aiming for a degree in graphic design. She took out $15,000 in federal loans, $2,800 of which went to catch up on unpaid bills, including utilities, health-insurance premiums and cable.


"Obviously, it's better not to use it that way if you can help it, because you're just going to owe that much more later," says Ms. Merritt, a former bookkeeper.

The logic for why "students" (or not) chose the easy way out? "The only way I feel I can survive financially is by going back to school and putting myself in more student debt," says Mr. Selent, who has since added $8,000 in student debt from living expenses. Returning to school also gave Mr. Selent a reprieve on the $400 a month he owed from previous student debt because the federal government doesn't require payments while borrowers are in school.

In other words, running away from insolvency by adding on more debt. And not just any debt, but Federal debt, which has no liens on any assets, aside from converting the obligor into a non-dischargeable, indentured debt slave indefinitely, with wage garnishment rights afforded to the government. Of course, the borrowers know all about this, but that too is a bridge to be crossed in due course. For now, someone has to pay for the rent and the food, even if that someone is once again the US taxpayer.

Expect stories like these to continue. Here's why:

College officials and federal watchdogs can't say exactly how much of the U.S.'s swelling $1.1 trillion in student-loan debt has gone to living expenses. But data and government reports indicate the phenomenon is real. The Education Department's inspector general warned last month that the rise of online education has led more students to borrow excessively for personal expenses. Its report said that among online programs at eight universities and colleges, non-education expenses such as rent, transportation and "miscellaneous" items made up more than half the costs covered by student aid.


The report also found the schools disbursed an average of $5,285 in loans each to more than 42,000 students who didn't log any credits at the time. The report pointed to possible factors such as fraud in addition to cases of people enrolling without serious intentions of getting a degree.


Capella Education Co., which runs online schools, examined student costs and debt at institutions?public and private?in Minnesota and concluded that between a quarter and three-quarters of loans taken out by students were for non-education expenses. At one of Capella's master's programs, the typical graduate left with about $30,200 in student debt even though tuition, fees and book costs totaled roughly $18,800. Borrowers are prohibited under federal law, except in rare instances, from discharging student debt through bankruptcy.


The share of student borrowers taking out the maximum amount of loans—$12,500 a year for undergraduates—has risen since the recession. In the 2011-12 academic year, federal Education Department data show, 68% of all undergraduate borrowers hit the annual loan ceiling, up from 60% in 2008.

When one averages out the numbers, how many students are said to abuse their loans and use the proceeds to fund "other" uses? "About a quarter."

Research suggests a fair chunk of that is going to non-education expenses. In 2011-12, about a quarter of student borrowers took out loans that exceeded their tuition, after grants, by $2,500, according to research by Mark Kantrowitz, a higher-education analyst and publisher of the education site

And the one take home paragraph that summarizes this latest capital misallocation clusterfuck which has Fed bailout written all over it:

Mr. Selent, of Fort Lauderdale, knows he is getting himself deeper in a hole but prefers that to the alternative of making minimum wage. In his 20s, he earned a bachelor's degree in communications from a local for-profit school but couldn't find a job in the field after graduating and began falling behind on his student-loan bills. He is now taking courses for a degree in theater so he can become an actor.

What else is there to add? Maybe just the chart of student debt.


And this chart, showing where all the newly created money is really going:


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Tue, 03/04/2014 - 13:25 | 4507484 Kreditanstalt
Kreditanstalt's picture

Wonder if some of these frauds are also buying dash-4-trash S&P stocks with the money too...

Tue, 03/04/2014 - 13:27 | 4507500 pepperspray
pepperspray's picture

Instagram that shit

Tue, 03/04/2014 - 13:30 | 4507509 gafgroocK
gafgroocK's picture




Maintaining Tenure is priceless

Tue, 03/04/2014 - 13:31 | 4507520 Pladizow
Pladizow's picture

"You cant fix stupid." - Ron White

Tue, 03/04/2014 - 13:35 | 4507543 Sofa King
Sofa King's picture

No kidding. Do these ass-hats realize that you can't discharge that debt with bankruptcy? Stupid as it gets.

Tue, 03/04/2014 - 13:37 | 4507562 Chuck Norris
Chuck Norris's picture

Did they interview Fonestar? He's gotta be a 34 year old boy living in his mothers basement. Used $5000 in student loans to "invest" in bitcoin.

Tue, 03/04/2014 - 13:44 | 4507611 BaBaBouy
BaBaBouy's picture

""A U.S. Middle District Court indictment alleges that Price spent much of the loan money on crack cocaine, cars, motorcycles, jewelry, tattoos and video games.""

He's A Patriot, Supporting The USA Economy And Bruffet's Empire...

Tue, 03/04/2014 - 13:49 | 4507633 camaro68ss
camaro68ss's picture

use your student loans and buy something useful like gold and silver

dont even worry about paying them back, obama will most likely "use his pen" and forgive all student loans

Tue, 03/04/2014 - 14:06 | 4507753 imapopulistnow
imapopulistnow's picture

Not a critique, just an observation.  The unskilled are getting by using combinations of part-time minimum wage jobs (<30 hours), illegal and unreported income (such as drug dealing), foodstamps, earned income tax credits, tax and UC benefit fraud, student loans for living expenses, medicaid, obama phones and various housing & home energy support programs for single Moms.  

Tue, 03/04/2014 - 14:08 | 4507770 Manthong
Manthong's picture

.gov does not care as long as you are in debt.

..and lots of kids drink their way through college for a degree in primitive art graded on a no lose curve instead of working their way through for a practical skill. long as there is debt to create

Tue, 03/04/2014 - 14:17 | 4507833 wallstreetapost...
wallstreetaposteriori's picture

I'm gonna make a T-shirt that says "my student loans paid for hookers and cocaine" Thumbs muthafucking up.

Tue, 03/04/2014 - 14:24 | 4507886 wallstreetapost...
wallstreetaposteriori's picture

and the back of it will say.. " and your tax dollars support my foodstamps".  Right fonestar?

Tue, 03/04/2014 - 14:43 | 4508020 negative rates
negative rates's picture

Another good crisis gone to waste.

Tue, 03/04/2014 - 14:48 | 4508046 halfawake
halfawake's picture

guys don't worry about it i'm sure they will pay it back they seem like good people.

Tue, 03/04/2014 - 14:51 | 4508065 gmrpeabody
gmrpeabody's picture

Public education at it's best...

Tue, 03/04/2014 - 16:21 | 4508656 noless
noless's picture

Every time i read an article like this i wonder why i bother even attempting to work to begin with, i could just pick a decent city on the beach and "earn my degree online." Fuck, might as well go to Mexico, would they even check if my ip was originating from inside the country?

Wed, 03/05/2014 - 09:53 | 4511249 Villageidiot777
Villageidiot777's picture

1st world problem.


I wish education would cost anything, so I could take student loan to buy gold and silver. Instead, they paid me for studying.

Tue, 03/04/2014 - 14:28 | 4507917 CheapBastard
CheapBastard's picture

Hey, yo!  List'n up.

No one gives a sheet about yo’ grades. Wat’s impotent is wat car u dribe and wat iPone yo us’n.  Also gottsa no the latest jack on Beeper and Kim k.

Tue, 03/04/2014 - 14:53 | 4508080 gmrpeabody
gmrpeabody's picture

Don't do that anymore, Cheap. You either got it or you don't..., you don't.

Tue, 03/04/2014 - 14:32 | 4507950 Redneck Hippy
Redneck Hippy's picture

So?  I spent my student loan on a Ford Pinto.  Cocaine seems like a bargain, relatively speaking.

Tue, 03/04/2014 - 13:46 | 4507594 BaBaBouy
BaBaBouy's picture


Tue, 03/04/2014 - 13:48 | 4507634 balolalo
balolalo's picture

Thank god you can get a clean slate if your file for bankruptcy.... oh wait that's only for wall street.  

From Wikipedia:  "Debt bondage (also known as debt slavery or bonded labor) is a person's pledge of their labor or services as security for the repayment for a debt or other obligation. The services required to repay the debt may be undefined, and the services' duration may be undefined. Debt bondage can be passed on from generation to generation."

Serfdom 2.0

Tue, 03/04/2014 - 14:03 | 4507711 BaBaBouy
BaBaBouy's picture

Jamy Will Own You For Life And Your Next 50 Reincarnations...

Tue, 03/04/2014 - 15:52 | 4508510 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

Spot on. This has to be by design. I couldn't imagine a meaningful loan pgm where there wasn't either direct pmt to the school or reimbursement based on a receipted expense. With no minimum GPA (heck, they don't even check if you're actually enrolled) it is a pit of fraud. Of course, the simpletons who do this, whether thru short-sighted hedonism, or as a mechanism to fund an income gap, will of course find themselves with a more or less permanent monkey on their backs. Now my question is, way down the line, will these student loan debts become the means with which to deny SS or disability benefits? 

Tue, 03/04/2014 - 22:55 | 4510292 StychoKiller
StychoKiller's picture

IF there's any justice, these folks should end up doing hard labor on a chain-gang!

Tue, 03/04/2014 - 13:56 | 4507687 Colonel Klink
Colonel Klink's picture

I said this whole thing about 3 months ago that people were using student loans to survive since they couldn't find any meaningful employment.  No one seemed to think it was credible.  Conspiracy theory once again becomes conspiracy fact.

Tue, 03/04/2014 - 14:27 | 4507900 wallstreetapost...
wallstreetaposteriori's picture

Shit... it was obvious years ago when the student loan debt skyrocketed and employment plummeted.  The worst part is that even with all this "education" we still are the fucking stupidest country in the world.  

Tue, 03/04/2014 - 14:32 | 4507943 CheapBastard
CheapBastard's picture

<< we still are the fucking stupidest country in the world....>> ... and also one of the obestest.

Tue, 03/04/2014 - 15:03 | 4508148 PartofOne
PartofOne's picture

LMAO!!!  Did you mean to say "and also one of the obestest" or "and also one of the most obese"?

Either way, your point "<< we still are the fucking stupidest country in the world....>>" was made; by using the pronoun "we" you included yourself!



Tue, 03/04/2014 - 18:22 | 4509337 NidStyles
NidStyles's picture

That's part of the joke junior, thanks for catching up.

Tue, 03/04/2014 - 14:45 | 4508031 Colonel Klink
Colonel Klink's picture

Agreed, I saw it years ago too but merely commented in a thread about the ever increasing use of student loan debt.

Tue, 03/04/2014 - 14:46 | 4508039 CH1
CH1's picture

even with all this "education" we still are the fucking stupidest country in the world. 

No, it's BECAUSE of that education! That's what  it's for!

Tue, 03/04/2014 - 13:50 | 4507649 thadoctrizin
thadoctrizin's picture

Bingo.  The .gov will tap your soc. security payments until your debt is paid = less SocSec payouts = SocSec crisis solved.

Tue, 03/04/2014 - 15:20 | 4508293 johnQpublic
johnQpublic's picture

but, MyRA.....

Tue, 03/04/2014 - 14:19 | 4507849 Honey Badger
Honey Badger's picture

Pay off student loan debt with credit card debt, home equity loans, etc, and THEN declare BK.  Fuck the bankers.

Tue, 03/04/2014 - 15:50 | 4508491 corporatewhore
corporatewhore's picture

LMAO!  Perfect solution!!!!  I love it.  I'm going back to school!

Tue, 03/04/2014 - 16:22 | 4508661 SophoricOne
SophoricOne's picture

This is precisely what I've told my kids.  Don't take the loans, but if you have to, get an education in a subject someone will pay you for, i.e. engineering.  And then, transfer your student loan balances to unsecured debt.

Tue, 03/04/2014 - 16:23 | 4508663 SophoricOne
SophoricOne's picture

This is precisely what I've told my kids.  Don't take the loans, but if you have to, get an education in a subject someone will pay you for, i.e. engineering.  And then, transfer your student loan balances to unsecured debt.

Tue, 03/04/2014 - 16:14 | 4508629 Blammo
Blammo's picture

"He is now taking courses for a degree in theater so he can become an actor."

So he can impersonate somebody with a functional brain?

Tue, 03/04/2014 - 13:33 | 4507531 SafelyGraze
SafelyGraze's picture

where those tuition dollars go

athletic centers

university hospital renovation

tuition serves as collateral for larger loans to institutions


Tue, 03/04/2014 - 13:39 | 4507573 LawsofPhysics
LawsofPhysics's picture

Please, fucking everybody in the club figured out the leverage angle years ago.


Tue, 03/04/2014 - 14:13 | 4507806 NotApplicable
NotApplicable's picture

These "premier student-housing builders" are gettin fat wallets too.

Tue, 03/04/2014 - 14:39 | 4507995 CheapBastard
CheapBastard's picture

Sucking the Teets dry....until people realize 99% of the "college courses" will be Tele Courses you watch from your living room in your pj's with little or no need for "student housing."


Tue, 03/04/2014 - 13:33 | 4507534 Renewable Life
Renewable Life's picture

Look on the bright side, we will have a generation of liberal arts majors and some with masters and PhD's too! Think how peaceful we will be as a Nation, how understanding as a group of human beings, we will be!  Social Justice, democracy, and equality will reign throughout the land, maybe we will elect a Black President or a Women! maybe we will legalize weed, wouldn't that be great!!!

America will be paradise when that happens!

ohhhhhhhh wait, what!!!! It already happened?????? What war??? What poverty??? What unemployment???  The statistics are lies, its NOT true, It cant be true, I live in a great neighorhood, I have a nice car, I teach at the University Liberal Arts and my wife is a government employee, everything is great, everything will be great tommorow!!

Tue, 03/04/2014 - 14:57 | 4508110 FEDbuster
FEDbuster's picture

Soon members of the Free Shit Army will have their student loan debts absolved by Executive Order.  Work anywhere in .gov or qualify for SSI, welfare, etc... and your loans will be forgiven.  Just vote for the Santa Claus Party, wash your gmo food down with floridated water and stay glued to the slime oozin' out of your 60in. Chinese flat screen.

Tue, 03/04/2014 - 15:53 | 4508522 corporatewhore
corporatewhore's picture

what's your point?? that the Repubs are any better?  Pleeeeaaasse.    Or the tea partiers?

they're in on the take with corporate welfare far greater than any safety net / student loan etc. can ever be.


Who's the bigger hypocrite?  Liberal dems or Conservate Pubs?



Tue, 03/04/2014 - 20:56 | 4509230 FEDbuster
FEDbuster's picture

They are ALL on the take with bankster bribes, but the Libtards tend to use their power to buy votes.  Buying votes seems to be working pretty well for them, I don't see the "balance of power" getting any better for the republicans anytime soon.  The Santa Claus party has bought the popular votes it needs to stay in power (although Obamacare is kicking them in the ass right now).  Just saw the DICKtator may delay his signature accomplishment for yet another year.

Tue, 03/04/2014 - 13:54 | 4507665 SilverRhino
SilverRhino's picture

You know ... and this sounds terrible to even think it.  

You could borrow $100K in student loans and use that to make a decent next egg to emigrate / disappear with a new complete identity.   

Tue, 03/04/2014 - 14:24 | 4507881 Metric
Metric's picture

Interesting thought.  This idea needs to be developed further -- it's too deliciously subversive not to.

So you take out $100k to take $5k worth of classes, buy bitcoin and a new ID, and then disappear into Ecuador, buy a nice casa for $30k in a mountain village, and sell Facebook short with the rest from your computer.

Damn, someone needs to write a book on this.  I guess the $5k should be spent on Spanish classes.

Tue, 03/04/2014 - 14:24 | 4507883 Rainman
Rainman's picture

+ 1,200,000 pesos

Tue, 03/04/2014 - 15:33 | 4508379 SteveNYC
SteveNYC's picture

Another Bernanke legacy! No?

Fed prints cash, buys treasurys --> .gov loans said cash to student, holds paper --> student defaults on paper --> Fed prints cash, buys student loan paper --> Fed owns both treasury and student loan debt




Tue, 03/04/2014 - 13:27 | 4507492 VD
VD's picture

act your way out of debt! (guaranteed upon graduation..)

Tue, 03/04/2014 - 13:40 | 4507576 FuzzyDunlop21
FuzzyDunlop21's picture

“In the new American ghetto, the nightmare engine is bubble economics, a kind of high-tech casino scam that kills neighborhoods just like dope does, only the product is credit, not crack or heroin. It concentrates the money of the population in just a few hands with brutal efficiency, just like narco-business, and just as in narco-business the product itself, debt, steadily demoralizes the customer to the point where he’s unable to prevent himself from being continually dominated.” 
-Matt Taibbi

Tue, 03/04/2014 - 13:26 | 4507494 firstdivision
firstdivision's picture

This bubble burst will be epic, especially with the newly to be opened private debtors prisions.

Tue, 03/04/2014 - 13:36 | 4507551 CrashisOptimistic
CrashisOptimistic's picture

No, it won't.

Nothing monetary is ever going to blow up again.  Money has no meaning.  It's created as needed whimsically.

Forget the "market".  It doesn't exist.

What takes it all down is oil.  It can't be printed.

Tue, 03/04/2014 - 13:56 | 4507682 forwardho
forwardho's picture

Agree, Physical will always trump theoretical in the end.

You can "pretend" to borrow money from yourself.

You cannot Pretend to use energy you do not have.

Tue, 03/04/2014 - 13:59 | 4507701 donsluck
donsluck's picture

Currency has no meaning any more. Money is value, so we aren't talking about that. Even oil won't take it down. Nothing will. There is no beginning or ending, just a process.

Tue, 03/04/2014 - 14:20 | 4507858 NOTaREALmerican
NOTaREALmerican's picture

Re:  Money has no meaning.  It's created as needed whimsically.


Tue, 03/04/2014 - 16:14 | 4508628 malek
malek's picture

But solar cells can be printed nowadays.

Tue, 03/04/2014 - 13:26 | 4507497 mayhem_korner
mayhem_korner's picture



Student loans are transfer payments to college professors (who otherwise couldn't get a real job).

Tue, 03/04/2014 - 13:37 | 4507556 KickIce
KickIce's picture

No lie, my kid has A/B+ in chemistry and calculus but just bombed an art appreciation test because the latest exam didn't follow her course notes.

Tue, 03/04/2014 - 13:41 | 4507585 Voicefather
Voicefather's picture

Correction, it is transfer payments to college administrators. A fraction of tuition costs actually go toward paying teachers and professors, especially at community college staffed heavily with part-timers making significantly less per hour than the full-time staff. 

I teach a single night class in science at community college. Thirty students paying on average $600 for the class comes out to $18,000 made by my class. I get $2000 of that and haven't seen a raise in 5.5 years. They have purchased a total of $20 worth of equipment I have been requesting for the labs since I got here. I brought in a lot of my own lab equipment and it got stolen from the locked labs. I do this because I love it and science education is critically lacking in this country.


Tue, 03/04/2014 - 13:58 | 4507695 Groundhog Day
Groundhog Day's picture

Janitors have a nice contract and "Other Service Contracts"

The Mafia and Banksters are in .EDU

Tue, 03/04/2014 - 14:02 | 4507722 donsluck
donsluck's picture

If you haven't had a raise in that long you should quit. I assume like most community colleges the teachers are not unionized. If you don't refuse to be abused, you will be abused.

Tue, 03/04/2014 - 14:27 | 4507898 Voicefather
Voicefather's picture

Some people volunteer at soup kitchens to feed the homeless. I accept low pay to educate ignorant kids in science. The real people with the ability to end this are the students themselves, refusing to overpay for largely worthless educations. There is a line around the block of people looking for college teaching jobs. Every part-time teacher could quit today and be replaced tomorrow. And it is not that I think the part-timers are really underpaid, it is that most everyone else in the system is overpaid.

Tue, 03/04/2014 - 17:34 | 4509095 qbravo
qbravo's picture

not college loans, but still relevant

Tue, 03/04/2014 - 13:31 | 4507501 autofixer
autofixer's picture

Before I knew what student loans were (we paid for college, back in the day, late 70s), I wondered in the mid '90s how all of the college students I talked to were going to Cancun on Spring Break.  In my day during Spring Break, my buddies and I had to scrape together our change to buy a 6 pack of beer.   Now I know.  

Tue, 03/04/2014 - 13:37 | 4507557 RafterManFMJ
RafterManFMJ's picture

Here's my eye-opener; I spent my one summer as a rock picker in a quarry for a master stone mason. And I helped on jobs. My 3 buds spent the summer traveling, including extended beach stays. No work.

Come time for my grants and what not - found out that I had earned enough that I no longer qualified for a good bit of my aid.

...and the rheostat on my American Comprehension went up another full turn.

Tue, 03/04/2014 - 13:48 | 4507636 Bangin7GramRocks
Bangin7GramRocks's picture

Stop being a dick. You know damn right well that college tuition has increased to the point where its not feasable to pay with a summer job. Kids today are fucked! Consider yourself lucky to be born when you were.

Tue, 03/04/2014 - 13:49 | 4507644 Voicefather
Voicefather's picture

Yeah, this article is spot on. During the recession my class numbers spiked (as did the max number I was forced to teach). Many students admitted they were just there on student loans to help pay rent and bide their time til things improved. Several were clearly spending the money on partying, but the majority, fortunately were taking it somewhat seriously and actually trying to pass. Although, a disturbing number of them, when polled, were working on degrees in education, something like 1 in 3. Maybe 1 in 7 was working on something like computer science, nursing or technical stuff.

Tue, 03/04/2014 - 13:28 | 4507503 ebworthen
ebworthen's picture

And is this really any different than the FED juicing Wall Street with taxpayer money?

No, just on a MUCH smaller scale.

Tue, 03/04/2014 - 13:40 | 4507572 CrashisOptimistic
CrashisOptimistic's picture

The Fed doesn't juice with taxpayer money.

It juices with whimsically created money and there is no connection to the taxpayer.  Just like these kids aren't "borrowing".  They aren't going to pay that back.  They are not stupid.  They are brilliant and amoral.

They take the money and just won't pay it back.  If their not paying it back threatens the system, the Fed will just print money.  The system will not be allowed to fail via things monetary.

And no, this doesn't mean gold is salvation.  Gold has no meaning to civilization.  Things related to money just have no meaning. 

There is no salvation. 

What will take it all down is oil.  It can't be printed.

Tue, 03/04/2014 - 13:48 | 4507637 ebworthen
ebworthen's picture

Yes, and why should I pay taxes when they create money from nothing?

And why shouldn't these folks milk the system?

I know it's "wrong" but so were the bailouts.

Oil yes, and water and food.

Tue, 03/04/2014 - 13:52 | 4507658 CrashisOptimistic
CrashisOptimistic's picture

As I say below, you breathe air to live.  Are you immoral for not creating air to repay it?

Money has become no different.  It didn't exist in the garden of eden.  It a creation of man's convenience.  It has no innate meaning.  How in hell can it be an arbiter of morality if it has no meaning?

An entity creates a substance from nothingness, lends it out and demands repayment with interest at significant pain and effort to the borrower.  How can this be moral?

This is the horror of QE.  It has removed any camouflage around money as being worthy of moral behavior.  The breather of air who does not create air to return to the atmosphere is immoral in no one's mind whatsoever.

Tue, 03/04/2014 - 14:27 | 4507901 therover
therover's picture

"It a creation of man's convenience" Kinda like the garden of eden.

Tue, 03/04/2014 - 14:05 | 4507704 oddjob
oddjob's picture

Taxes don't even come close to covering government expenditures, Taxes exist to con people into thinking paper money is actually worth something.

Tue, 03/04/2014 - 14:28 | 4507908 Shizzmoney
Shizzmoney's picture


And why shouldn't these folks milk the system?


The problem isn't the people milking the system; the problem *is* the system.

I am so glad I am not in college debt.  It's not like the degree I lack is killing me in the income department; with wages stagnant for all walks of life, the only thing a college degree seems to ensure today is a life of indebted servitude.  

A college degree was sold to my generation as a way "up the ladder" to a good job.  Now, if you have a BA, you're lucky to be a barista or waiter.  

The problem isn't the students or the degrees themselves; in the end, corporate America just isn't "buying the product".  

Hell, look at most of these asshole start-up guys in SV; most are dropouts or under achievers while in university.  The only "gain" they got from it are a) random technical expertise and b) networking.  It's not like they actually gained intelligence or business sense.  They just happen to be closer to "the tap" than the average person.

I'm going to take great pleasure when this all burns to the ground.  And really, so should you.

Tue, 03/04/2014 - 14:23 | 4507870 NOTaREALmerican
NOTaREALmerican's picture

Re: Just like these kids aren't "borrowing".  They aren't going to pay that back.

Yes.   And a loan that isn't going to be repaid isn't really a loan.

Tue, 03/04/2014 - 14:47 | 4508045 economessed
economessed's picture

I agree -- no intention to repay.  I've heard that sentiment with my own ears:  young adults saying their parents and grandparents got social security, we got nothing but the bill.  If the government is stupid enough to hand them the money, they have to grab it, because they'll never get another chance in their lifetimes.

Tue, 03/04/2014 - 13:29 | 4507504 mayhem_korner
mayhem_korner's picture



Well at least SNAP card usage isn't corrupted.


Tue, 03/04/2014 - 13:29 | 4507506 corporatewhore
corporatewhore's picture

I applaud their ingenuity in coping with this shitty economy.

Remember, no one gets out of here alive so what difference does debt make

Tue, 03/04/2014 - 13:35 | 4507546 Renewable Life
Renewable Life's picture

It doesn' long as your NOT borrowing money from me, AGAINST my will!

Tue, 03/04/2014 - 14:43 | 4508022 RafterManFMJ
RafterManFMJ's picture

You all keep saying that word, money; I don't think it means what you think it means.

Tue, 03/04/2014 - 13:38 | 4507563 Gamma735
Gamma735's picture

Our governement's and society's lack or morality is no excuse for ruining your own moral chartacter.  You will need that character once our corrupt government collapses.

Tue, 03/04/2014 - 14:02 | 4507723 corporatewhore
corporatewhore's picture




Tue, 03/04/2014 - 14:12 | 4507794 Greenskeeper_Carl
Greenskeeper_Carl's picture

i hear you on the church part, Ive tried telling that to my wife and her family before, but they don't want ot believe it. Cognitive dissonance at its finest. "they do so much good, very little of the church's money gets spent on that type of thing, most of it goes towards helping poor people" bull-fucking-shit. 'helping the poor' didnt bankrupt the diocese of stockton, or several others. I refuse to give them a dime, and obviously dont attend their sheep meetings on sundays. My wifes parents had to pay for the classes their stupid priest made us take to get married in their dumbass church( done only to make her parents and grandparents happy). I flatly refused to give them a dime for any reason whatsoever. Nor will any of my children ever be alone with a member of the catholic clergy. Fuck that, and fuck them

Tue, 03/04/2014 - 14:51 | 4508062 corporatewhore
corporatewhore's picture

my sympathies on signing off in order to get married in the church.  i remember my grandmother had to wear a pink dress and be married in the priest's rectory because she was marrying a (god forbid) Protestant. 

You are 100% correct in witholding donations and protecting your kids.

but, let's stay on topic.

It's all corrupt.  And they all know it which is really the sad part.  Our politicians, our leaders, our religious... bought and paid for.  From shifting $54 million in burial funds ala Milwaukee Archdiocese to earmarking every simple bill so that it's filled with crap like building a replica Noah's ark to the tune of $73 million (iirc)


Tue, 03/04/2014 - 14:27 | 4507903 shovelhead
shovelhead's picture

Dominus Vobiscum

Tue, 03/04/2014 - 14:45 | 4508030 negative rates
negative rates's picture

Calm down, don't get exhausted, i'll do some driving.

Tue, 03/04/2014 - 14:05 | 4507747 Greenskeeper_Carl
Greenskeeper_Carl's picture

agreed. i think its a shame what we are doing to these kids, 18-19 years, most of the anyway, have no understanding of debt. i was a fucking idiot when i was that age, and were it not for my parents, i would have wound up with a shitload of debt. But these fuckers in their 30s and 40s have no excuse. Howeer, the govt virtualy gaurantees these kinds of things will happen with this program. subsidize something, you are sure to get more of it


Tue, 03/04/2014 - 14:06 | 4507756 donsluck
donsluck's picture

+1 you need your character every day. Without it you have a character disorder, a mental illness.

Tue, 03/04/2014 - 13:29 | 4507507 silentboom
silentboom's picture

"He is now taking courses for a degree in theater so he can become an actor."

Well at least he now came to his senses and is trying to get a real skill. :o\

Tue, 03/04/2014 - 13:32 | 4507530 autofixer
autofixer's picture

He will be qualified to run for Resident of the White House.

Tue, 03/04/2014 - 13:37 | 4507558 corporatewhore
corporatewhore's picture

Perhaps he should interview with the Principal or Cigna or some wirehouse.

At one time I had an ex butcher at Merrill Lynch advising me.  Excellent actor.  The lines were incredibly delivered

Tue, 03/04/2014 - 13:30 | 4507508 KickIce
KickIce's picture

I think the FEMA camp for student loan defaults will be much larger than the ZH camp.

Tue, 03/04/2014 - 13:30 | 4507510 youngman
youngman's picture

We all know this was going on....its sad..but I also bet they all think they deserve it..and also feel they will never have to pay it back..nor will they...they are the new class of give me more.....the new generation of sponges...that will be this way all thru their life....

Tue, 03/04/2014 - 13:56 | 4507684 MeBizarro
MeBizarro's picture

Federal spending per capita FY12 on the elderly - over $25k

Federal spending per capita FY on children - under $4k


Tue, 03/04/2014 - 14:51 | 4508071 RafterManFMJ
RafterManFMJ's picture

If the Mexican illegals and the imported Somalis don't have to pay taxes, for healthcare, and get sweet sweet freebies - why shouldn't you?

Lard up the plate with freebies and get ready to fiddle while it burns.

Really, the best current IQ test is, "Do you have a job?" If yes ... Well, you're not the sharpest knife in the drawer.

Rember this Demonic Shitshow rumbles on only because we continue to serve...

Thus, I bless anyone who loads up the EBT - my next job should I lose mine will be Welfare Bum.

Tue, 03/04/2014 - 13:30 | 4507511 Smegley Wanxalot
Smegley Wanxalot's picture

When I was in college, students used their loans to go skiing, buy pot and booze, and to party.  They were also taking 6 years to get 4 year degrees, and laughed at me while I worked weekends and during school breaks, didn't take money from the folks, got my 4 year degree in 3 years by packing credits, and kept my total student loan balance to $7k (which I paid off in 5 months after graduation).

There were idiots then, and there are idiots now. 

Tue, 03/04/2014 - 13:41 | 4507588 LawsofPhysics
LawsofPhysics's picture

Likewise, and yes they are still idiots, unfortunately, many are in government now.

See the real problem yet?

Tue, 03/04/2014 - 13:45 | 4507612 CrashisOptimistic
CrashisOptimistic's picture

And you were one of them.

The single most horrible thing that has happened via QE is the destruction of money as a yardstick of morality.

It's imaginary substance.  How can behavior with respect to it measure morality?  It's printed from thin air whimsically.  It's like saying you inhale oxygen and are obligated to go create oxygen in order to repay it.

It's meaningless.  It isn't an arbiter of morality.

That is the horror of QE.

Tue, 03/04/2014 - 14:28 | 4507914 NOTaREALmerican
NOTaREALmerican's picture

Re:  That is the horror of QE.

Well,  I agreed with you up to there.    I think the morals were gone long before QE.

The US society hasn't had any morals for (well) ever. 

I just bought tires for my car.   Picked up one of the Sports Illustrated mags in the wait room.  The article in the back was about sports cheating.    How rules no longer matter.   If you can get away with it, people will create bullshit about why it's ok.   Only the dumbasses have morals.   The US has more dumbasses than most places on the planet.   The dumbasses are "wising up".

(Agreed with your above posts on money & oil tho...)


Tue, 03/04/2014 - 13:30 | 4507513 Smiley
Smiley's picture

Its so sad, they are preying on the 'invincible' mentality that they majority of kids just starting out in college exhibit.  They have no concept of future planning and are only thinking about their immediate situation; easy marks.  The IRS will get them all sooner or later, with much interest, fees, and surcharges tacked on.  Sooner or later the people who grab for the "free money" will have to go on payroll and the IRS will be there waiting.

Tue, 03/04/2014 - 14:45 | 4507981 Dr. Destructo
Dr. Destructo's picture

It's got very little to do with the 'invincibility complex' (though I admit it does have a small contribution to the problem) and more to do with the years of programming that said "In order to get a decent job (or obtain vast amounts of wealth) you need a college education.

Ever seen one of these posters around the classroom? I personally have never seen a classroom that didn't have one of these posters. We're born as consumers, and the loan sharks/.edu/.gov institutions, even our own parents state to kids that they need a degree to be somebody. Some of our parents knew better and passed that knowledge down, but too many of them didn't and regurgitated the lie to their children; which they then proceeded to take out loans without having the proper education to understand the language therein.

Krugman and other predatory economics (he really ought to stop calling himself an economist) see us as money farms and as a result our savings are being attacked, our purchasing power is being reduced, and our jobs are going overseas. Nobody can plan for that, and those that survive the cut are lucky, but even they will be feeling the sting pretty soon. My Associates degree was in comp-sci, but I decided to get a B.S. in Business Admin because I saw that comp-sci jobs are being out/insourced to cheap labor, but even my business admin move looks bleak due to small businesses closing. I'm lucky I got a job, but even that is in danger and there are rumors of layoffs going back and forth. but I digress.

Fiat money is debt, and debt is power and control. There is a way out, but the people can't be bothered with taking to the streets because they don't want to upset the status quo -that sheepish behavior was developed from day 1. When people say their money is being stolen for entitlement programs they're half right. Their money IS being stolen, but not for entitlement programs -it's being stolen because they're trying to make people into a commodity through debt (let's just call it slavery) and student loans are perfect for doing just that. The money 'stolen' from us isn't going anywhere or being used for anything EXCEPT to make us into slaves. They could just print 2623463473576 ba-jillion dollars and forgive all the debt, but they lose their slaves by doing that.

Still you make a good point, so plus 1 for that.

Tue, 03/04/2014 - 13:31 | 4507514 dexter_morgan
dexter_morgan's picture

Mr. Selent, of Fort Lauderdale, knows he is getting himself deeper in a hole but prefers that to the alternative of making minimum wage.

He knows, as we all do, that at some point he will never have to pay it back, so what the hell. Keep adding it on.

Tue, 03/04/2014 - 13:31 | 4507516 vortmax
vortmax's picture you're saying if we give thousands of dollars to 18-24 year olds without any form of accountability, they don't spend it on what the money is ostensibly meant for? Color me surprised!

Tue, 03/04/2014 - 15:48 | 4508485 RaceToTheBottom
RaceToTheBottom's picture

Wait it gets worse.  we inundate them with information about how loans don't need to be paid back:

Bankruptcy laws

Banksters being bailed out than making millions in salaries and no one going to jail...


Makes one wonder why there are not more people scamming the system?

Tue, 03/04/2014 - 18:21 | 4509333 Agstacker
Agstacker's picture

It's not easy, being green...

Tue, 03/04/2014 - 13:32 | 4507521 i_call_you_my_base
i_call_you_my_base's picture

From a personal finances perspective, it's better to pay off high interest credit cards and roll that debt into lower interest student loans. Obviously, if you don't pay the loans back for a long time, it'll shake out against you, but it's not a bad decision.

Tue, 03/04/2014 - 13:32 | 4507522 BadDog
BadDog's picture

Bunch of 65+ broke baby boomers are getting ready to go back to college.

Tue, 03/04/2014 - 13:47 | 4507632 CrashisOptimistic
CrashisOptimistic's picture

Why not?  It is like a new government benefit.  Take the "loan" and live life.

You take oxygen from air and live life.  Are you immoral for not repaying the oxygen?

Tue, 03/04/2014 - 14:02 | 4507717 KickIce
KickIce's picture

Is your question directed at ZH or the EPA?

Tue, 03/04/2014 - 14:57 | 4508112 RafterManFMJ
RafterManFMJ's picture

Dealing morally with an immoral enemy is in itself immoral. - Some famous dude.

Tue, 03/04/2014 - 13:32 | 4507525 jay35
jay35's picture

" for an every greater portion"

"when it comes to determining how pays for what"


Seriously, proofread your articles so you don't look as ignorant as the people you're writing about.

Tue, 03/04/2014 - 13:54 | 4507666 ncdirtdigger
ncdirtdigger's picture

At least your degree in English studies is useful for something.

Tue, 03/04/2014 - 15:11 | 4508209 Dr. Destructo
Dr. Destructo's picture

Yeah but English majors who proofread have to compete with MS Word and Microsoft Sam.

Tue, 03/04/2014 - 14:00 | 4507707 thamnosma
thamnosma's picture

geez, how does pay for what and who pays for how.  When, I don't know.

Tue, 03/04/2014 - 13:32 | 4507527 pashley1411
pashley1411's picture

I'm long "serfdom".    

why can't anyone say PLUMBER.   wtf, its skilled labor and makes decent money, even if yes it stinks.  

and I'll bet not one of the debt slaves has figured out that unrestricted immigration = youth poverty.    sigh

Tue, 03/04/2014 - 14:00 | 4507705 Carl Popper
Carl Popper's picture

I have been pushing plumbing for a long time. Once you are a master plumber and if you have any business saavy you will be well into six figures in your thirties.

Tue, 03/04/2014 - 14:04 | 4507740 Indian_Goldsmith
Indian_Goldsmith's picture

Engineer myself. :) 

Tue, 03/04/2014 - 15:02 | 4508143 RafterManFMJ
RafterManFMJ's picture

Naw, Pizza Man is he way to go, tax free income and great hours. Just need

A beater car 1000 bucks
Glock 650 soft armor 600 can be working by this weekend and have your startup expenses paid off in 3-4 weeks.

Tue, 03/04/2014 - 14:03 | 4507731 Indian_Goldsmith
Indian_Goldsmith's picture

But RachelMaddow said immigration increases diversity, and diversity is always Good!!!!

Tue, 03/04/2014 - 14:30 | 4507934 NOTaREALmerican
NOTaREALmerican's picture

Re: But RachelMaddow

The "Progressives" are as clueless as the "conservatives".  

Tue, 03/04/2014 - 15:10 | 4508212 Kobe Beef
Kobe Beef's picture

Once you reach the 32nd degree, along with the secret grip and password, you learn it's actually written as DIE-VERSITY in the sacred Book of Nation-Wrecking..

Tue, 03/04/2014 - 13:33 | 4507535 LawsofPhysics
LawsofPhysics's picture

That's easy, they are used to support fat salaries for administrators.  After doing some homework on colleges for my eldest I cn tell you the tutition sure as hell does not go to the people doing the actual work (much like corporate or government management, I wonder if there is a connection here?).

Tue, 03/04/2014 - 13:39 | 4507569 MeBizarro
MeBizarro's picture

It doesn't.  There have been a couple of studies out recently that show that tenured professors haven't seen a real raise in nearly a decade on aveage and that increasingly more and more colleges (especially public ones) are relying upon adjunct professors to teach undergrad courses even non-introductory ones. 


Tue, 03/04/2014 - 13:33 | 4507536 Platinum
Platinum's picture

One of many bubbles inside a bigger one. I don't want to be the doctor that's going to pop that pimple.

Tue, 03/04/2014 - 13:34 | 4507538 reader2010
reader2010's picture

"Debt is money for the poor."

Tue, 03/04/2014 - 13:53 | 4507660 sarahsloverlance
sarahsloverlance's picture

Yo repite usted:

"I see Debt, people".

Tue, 03/04/2014 - 13:35 | 4507544 crash commando
crash commando's picture

My idea:  Start the Crypto College of Scientology Art School.  20k a year.  Much profits.  Or has it been done?


Tue, 03/04/2014 - 13:37 | 4507560 MeBizarro
MeBizarro's picture

Just a symptom of the broken higher education system.  Already the signs are showing that the system is starting to crack especially if you look at number of applications in schools in Midwest and NE and certain smaller private colleges having to become innovative in their pricing system.

Obama took a half-hearted approach to bring 'transparency' to college pricing and what it really costs to attend annually and it is one area where I hoped Arne Duncan would do a lot more.  Ditto on collecting valid 4-year graduation rates and post-graduation statistics which can't be so easily gamed. 

Tue, 03/04/2014 - 13:38 | 4507566 mademesmile
mademesmile's picture

Dang. I was thinking this was an Onion article.

Tue, 03/04/2014 - 13:39 | 4507570 Silver Sativa
Silver Sativa's picture

Every now and then, these types of articles highlight the blight of "for-profit" schools, like DeVry, and University of Phoenix, for only offering the mearest credentials, while charging through the nose.

You know what: Most schools are "for-profit." I realized that a long time ago, but continued to try to learn relevant knowledge, during my time at my rinky-dink community college... that only had a graduation rate of 23%. No fucking shit.

The last year I went to school was 2012; and the only classes I took were Microsoft certification classes. After that, I wrote one check and completely paid off all of my government loans.

Whenever I read these articles, I actually read about myself: I did use school as an excuse to "get paid," and to look busy. But you know what? During that time, I still feel I should have learned relevant knowledge that would help me get a job. Those community college classes were a sham, and those schools know it.

College is usury now, covered with lies, and false hope. It is nothing more than a money-grab through the definition of "prerequisite" classes -- classes that mean nothing, even in the short term.

Tue, 03/04/2014 - 15:17 | 4508260 Kobe Beef
Kobe Beef's picture

Thanks for the fun Mad-lib:

__(noun)____ is usury now, covered with lies, and false hope. It is nothing more than a money-grab through the definition of __(noun)___

I dare you to find one element of the contemporary USSA that could not fill in those blanks.

Tue, 03/04/2014 - 13:41 | 4507591 GrinandBearit
GrinandBearit's picture

I would think the loan money would go directly to the school (?)

Tue, 03/04/2014 - 13:41 | 4507592 rsnoble
rsnoble's picture

I was at Walmart the other day (no comments please) looking to buy ammo and there was an early 20yo dude at the counter with a supremely fat bitch who was obviously checking him out for a 'future prospect' know the I wana have your baby, buy me a house type discussion.

The discussion went something like "im in community college, and im using my student loans to live off".

The fat bitch giving all the 'approval indicators' like twirling her hair and smiling revealed her satanic white trash stupidity into thinking this guy is the one for her.

Flash forward 5 years we have a $10hr security guard with a BA, and mrs. fatter than ever sitting at home at the trailerpark with 2 fat-chinned kids eating their food stamp funded hot dogs.

And that's what it takes to keep the economy afloat in the US.

Tue, 03/04/2014 - 14:08 | 4507772 SilverFish
SilverFish's picture

Sir, your story is obviously bullshit.



No woman of such high calibre would be caught dead in the sporting goods section of a Walmart.



Tue, 03/04/2014 - 18:22 | 4509343 Agstacker
Agstacker's picture

Good luck with that .22 ammo purchase...

Tue, 03/04/2014 - 14:53 | 4508079 Wilcox1
Wilcox1's picture

That and plenty of 45acp. Was there any at your store?

Tue, 03/04/2014 - 13:47 | 4507629 MathWins
MathWins's picture

There are too many bullshit degrees that aren't worth the paper they are printed on.  Parents and students need to wake up and demand degrees that will actually provide them with a good paying job when they graduate, or at a minimum, it provides an entry way to a job with a good future.  I'm sure the colleges also enjoy the fact that a 4 year degree has, in many cases, been stretched out to 5 years.  The university in our area keeps building new, fancy buildings and sending many of their students out in the world with a communications degree.  What a big freakin' waste of money.

Tue, 03/04/2014 - 13:48 | 4507638 ncdirtdigger
ncdirtdigger's picture

Wat youz wants to do is dont be gradiate until youz be eligibal for sosal sekurity.

Tue, 03/04/2014 - 13:51 | 4507651 Jason T
Jason T's picture

Lead us not to tempation but deliver us from the "evil one."

the Gov't is simply leading the masses to temptation with all this shit.  


thou shall not covet they neighbors stuff and by the sweat of thy brow shalt thou eat bread .. not someone else's brow.



Tue, 03/04/2014 - 13:53 | 4507661 Downtoolong
Downtoolong's picture

And here's what happen when the kids don't cough up some of that grift to fund their parents lifestyle too:


Tue, 03/04/2014 - 13:55 | 4507671 Carl Popper
Carl Popper's picture

Lol. The eventual shitstorm is going to be epic, but I bet they can postpone it another 15 to 20 painful years.

We aint even close to greece. and they are still muddling along.

Tue, 03/04/2014 - 13:56 | 4507688 Catullus
Catullus's picture

Uh, these are investments in America.

Student loans are tax riders now. Wage garnishment? I call that income tax withholdings. The Feds are just withholding more from these slobs.

Lesson #1: NEVER owe the government money.

Tue, 03/04/2014 - 14:10 | 4507785 Indian_Goldsmith
Indian_Goldsmith's picture

That's impossible! If the gubmint wants, it can tax you for such strange reasons, that you'll soon owe them your life. 

Tue, 03/04/2014 - 15:44 | 4508466 bluskyes
bluskyes's picture

They can only tax what they can find.

Tue, 03/04/2014 - 13:58 | 4507694 JamesBond
JamesBond's picture

$10,000 off your student loan each year - for every year you serve in the military.

coming soon.  need fodder for russian bears.   

Tue, 03/04/2014 - 14:07 | 4507766 FieldingMellish
FieldingMellish's picture

There is always a purpose behind the madness... purpose, meet madness.

Tue, 03/04/2014 - 14:18 | 4507839 MeBizarro
MeBizarro's picture

Um they already have this through the Montgomery GI bill and a few other similiar sources. 

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