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Flood Of Students Demanding Loan Forgiveness Forces Administration Scramble

Tyler Durden's picture




 

"Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone," is a study's warning over government plans that allow students to rack up big debts and then forgive the unpaid balance after a set period. As WSJ reports, enrollment in student debt forgiveness plans have surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion. The administration is looking to cap debt eligible for forgiveness, as President Obama's revamped Pay As You Earn scheme has seen applications soar and is estimated to cost taxpayers $14bn a year. The 'popularity' of the student loan bailout plan surged after Obama promoted it in 2012, and now the administration must back-track as costs have massively outpaced government predictions.

 

 

We have been aggresively focused on the government's blowing of the student loan bubble...

Student debt has nearly doubled since 2007 to $1.1 trillion, disproportionately driven by the growth in graduate-school debt.

And questioned the need to incur such massive credit-fueled costs of tuition only to gain a low-paying job...

there is no point in trying to preserve the old regime. Today's emphasis on measuring college education in terms of future earnings and employability may strike some as philistine, but most students have little choice. When you could pay your way through college by waiting tables, the idea that you should "study what interests you" was more viable than it is today, when the cost of a four-year degree often runs to six figures. For an 18-year-old, investing such a sum in an education without a payoff makes no more sense than buying a Ferrari on credit.

And while government plans are nothing new, Obama has aggressively promoted them...

The government has offered some form of income-based repayment since the early 1990s, but few studentsfound the terms enticing. But in 2007, Congress allowed borrowers working in nonprofit and government jobs to have unpaid debt forgiven after 10 years, and cut monthly payments for new borrowers to 15% of discretionary income.

 

In 2010, it cut those payments to 10% for borrowers who took out loans from 2014. A year later, Mr. Obama, through executive action, moved up the date when borrowers could qualify for the new terms, creating a program for those who took out loans from 2011. The White House this year has proposed making the program available to all student borrowers, regardless of when they signed their loans.

 

The popularity of the programs surged after the Obama administration began to promote them, starting in 2012, on the Internet and later through email to borrowers.

And it seems they are ripe for abuse...

"Income-based repayment can be a way for students responsibly to manage debt, but it should not be a bailout for students who borrow too much or for schools who charge too much," said Sen. Lamar Alexander of Tennessee, the ranking Republican on the Senate Education Committee.

But, as usual, the government screwed up...

The plans' long-term costs have greatly outpaced the government's predictions. In the last fiscal year, debt absorbed by the repayment plans from the most widely used student-loan program—Stafford loans—exceeded government expectations from a year earlier by 90%.

 

...

 

A report Monday last week from the Brookings Institution, a centrist think tank, offered one of the few preliminary examinations of the programs' impact. The most popular plan could cost taxpayers $14 billion a year if it becomes available to all borrowers as Mr. Obama has proposed, while fueling tuition inflation, it said.

 

"Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone," the study said. The authors recommend scrapping the forgiveness provisions.

Sure enough everyone piled in looking for their handout...

Enrollment in the plans—which allow students to rack up big debts and then forgive the unpaid balance after a set period—has surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion, U.S. Education Department records show.

 

Which means costs are soaring and the administration feels the need to do something to fix what it had broken by intervening once again...

 

The Obama administration has proposed in its latest budget released last month to cap debt eligible for forgiveness at $57,500 per student. There is currently no limit on such debt.

 

The move reflects concerns in the administration not just about the hit to the government, but over the risk that promising huge debt forgiveness could make borrowers and schools less disciplined about costs. Colleges might charge more than they would otherwise, leading students to borrow more.

And so is the government about to pop the student loan bubble by spoiling a good thing - unlimited debt forgiveness - for students and trickling down that credit tightening impact on colleges only to happy to raise tuition costs to reflect the credit-forgiveness-adjusted amount of money on the table?

Source: The Wall Street Journal

 

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Tue, 04/22/2014 - 14:41 | 4683613 Telemakhos
Telemakhos's picture

If we ended the war on terror and reallocated those funds to cancelling all college debt and funding free education for STEM fields, what would happen to the economy?

Tue, 04/22/2014 - 14:46 | 4683633 Telemakhos
Telemakhos's picture

As a reply to my own question, the $72 billion quoted in the article for debt relief is about what's been allocated to the departments of State and the Agency for International Development (foreign aid) alone as war appropriations for the Global War on Terror, without even touching Department of Defense spending.

Tue, 04/22/2014 - 15:02 | 4683727 FredFlintstone
FredFlintstone's picture

We would blow a huge bubble in STEM and then have a shit load of unemployed engineers and what have you.

Tue, 04/22/2014 - 15:06 | 4683746 Telemakhos
Telemakhos's picture

So, kind of like what we have now, only with the unemployed skilled in making things rather than writing bad poetry about the colonialist oppression of lesbian basket-weavers?  At least they could put their skills to use constructing sturdy carboard houses for themselves underneath the bridges that they had built while briefly employed.

Tue, 04/22/2014 - 14:42 | 4683615 B2u
B2u's picture

"Obama promoted it in 2012, and now the administration must back-track as costs have massively outpaced government predictions."

 

oh....I thought they were referring to ObamaCare....

 

Tue, 04/22/2014 - 14:44 | 4683624 lolmao500
lolmao500's picture

STOP GIVING STUDENT LOANS = prices will come down.

Tue, 04/22/2014 - 14:49 | 4683652 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

And more professors will be well-rounded since they will likely spend part of their career in the private sector to pay the bills.

Tue, 04/22/2014 - 14:47 | 4683638 i_call_you_my_base
i_call_you_my_base's picture

"Demanding loan forgiveness"

So you mean filling out an application, right?

Tue, 04/22/2014 - 14:48 | 4683644 B2u
B2u's picture

Student loan amounts should be based on earnings potential of a chosen major...which impacts how much a person can pay back.  Here is a list... http://www.payscale.com/college-salary-report-2013/majors-that-pay-you-b...

 

If you want to major in Social Work or Elementary Education don't expect much in the way of student loans.  Neither pays much and while they may be admiral areas to work they don't have much of a cost/benefit.

Tue, 04/22/2014 - 15:35 | 4683880 SDShack
SDShack's picture

Looks like I chose wisely with an engineering degree.

Tue, 04/22/2014 - 14:49 | 4683654 hotrod
hotrod's picture

I thought the Govt jobs were the good jobs.  Cant get fired, fixed retirements, great benefits AND LOAN FORGIVENESS after 10 years.

Tue, 04/22/2014 - 14:50 | 4683659 Ban KKiller
Ban KKiller's picture

Securized debt? Yep. So who, really, has the right to enforce? IF I had one of these loans I would want to know...

But THESE kids have had the brains taught out of them. They are drones for the most part. Yeah, I am a little harsh today.

Tue, 04/22/2014 - 14:57 | 4683705 Bunga Bunga
Bunga Bunga's picture

Free Haavaad, the AmericanCommunist dream comes true.

Tue, 04/22/2014 - 14:58 | 4683707 earnyermoney
earnyermoney's picture

Want debt foregiveness? To the front lines in Ukraine. LOL

Tue, 04/22/2014 - 15:00 | 4683720 Billy Sol Estes
Billy Sol Estes's picture

In the newly created Face-Roll Mine Detection Surveying Unit.

Tue, 04/22/2014 - 15:01 | 4683722 JuliaS
JuliaS's picture

When I went through school years ago it cost me $26K. $16K of that was government grants, of the remaining amount $10K went to principal and $2K extra towards the interes accumulated during the year it took me to earn enough to get rid of the debt.

Still I carry the guilt that taxpayers had to collectively pony up more than 50% of my tuition. I cope with it by buying random people drinks. They ask whether they owe anything to me, to which I reply: "You pay taxes, don't you?" Makes a good conversation starter.

So far I've repaid about a tenth of what I owe back to the taxpayers.

Tue, 04/22/2014 - 20:02 | 4684763 FredFlintstone
FredFlintstone's picture

Where do you hang out Julia? :)

Tue, 04/22/2014 - 15:03 | 4683734 BiteMeBO
BiteMeBO's picture

Mom, Dad, my student loan debt was erased!!  Can I borrow $100 and the car and what's for dinner?

Tue, 04/22/2014 - 15:05 | 4683738 BobRocket
BobRocket's picture

Has anybody read the Ts & Cs ?

 

debt forgiveness does not write off the loan, don't forget that student loans are non-dischargeable (this make them AAA* rated asset, better than USG), a student loan is only extinguishable upon repayment or death.

If the loan is written off then the money that was created at the time the loan was given must be destroyed and that is deflationary (can't have that)

The outstanding non-performing triple A rated asset is lodged with the fed as 98% collateral for a 0.25% loan.

Any repayments are hoovered* up in fees.

Student Loans were never meant to be repaid.

 

*any yanks remember him ?

 

 

Tue, 04/22/2014 - 17:25 | 4684246 trader1
trader1's picture

haven't you heard about the silent battle in the background over US vs. EU contract law?

word has it that the europeans are finally upgrading the americans to v2.0.  

it's worth considering that most college education in EU countries is quite affordable/cheap vs. American peers.  

so you've got a few options america:

  • default
  • debt cancellation
  • nationalize student loan lenders
  • change the law, amend the T&C
  • raise taxes

which one do you want?

 

 

Tue, 04/22/2014 - 17:52 | 4684329 Bastiat
Bastiat's picture

The money created at the time the loan was given can not be destroyed -- it has been spent, sent out into velocity land, and cannot be "destroyed."  The asset, which represents the stream of repayments of the loan is destroyed, or written down to zero.  If that asset has been posted as collateral, leveraged, THAT money must be repaid terminating that loan and destroying that money.

Tue, 04/22/2014 - 15:08 | 4683753 Major Major Major
Major Major Major's picture

“…enrollment in student debt forgiveness plans have surged nearly 40%”

Are these plans just loans that have been deferred while income for the borrower is low or are they forgiveness plans?  What is required for the loan to be forgiven?

Someone I know is in the process of getting their loans consolidated with the DOE.  They received a mailer with a code and they called in.  The DOE loan consolidation representative was very helpful!  Long story short, just over $50k in loans will now have a monthly payment of $39 and since the person intends on working full time for the DOE in the future, after 120 qualified months of work, the balance (should be much larger than $50k with a $39 monthly pmt) will be forgiven.  I would suggest they do it.

However, if anyone knows how the debt can be forgiven without the qualified work, please let me in on the secret.

Tue, 04/22/2014 - 16:32 | 4684076 BobRocket
BobRocket's picture

It's deferrment.

 

The clue is in the Ts & Cs

 

It is non-dischargeable, not even God Almighty can forgive this one.

 

Because God himself cannot discharge this asset it is 'Better Than Gold' (doesn't a chinaman have shares in that ?)

 

A 'Cast Iron' asset can be loaned out to many different borrowers (each of whom think they have sole claim to it) depending on the fraction that must be reserved

 

One of those borrowers is the FED (the source of all money)

 

Can you see how it works yet ?

 

 

Tue, 04/22/2014 - 17:03 | 4684184 Major Major Major
Major Major Major's picture

I see how it works... and read the blog... which is why I asked the question.  Forgiveness is only available to those that document their work as full time teachers for a cumulative amount of 120 months (10 years) with the DOE.  This is what I suggested my friend do.  Sign up in the plan to begin tracking qualified months.

The fact that the DOE will allow a minimum monthly payment of $39 compared to ~$650 (for int. + prin. on a 10-yr) and the balance of the loan to be forgiven after documented work has been satisfied is crazy to me but that is what government is.  Basically this means deferring while in a long-term plan for forgiveness.

The risk to the borrower is that debt is not forgiven as promised once said work is complete or the inability to complete said work and the resulting increased balance due as a result of making minimal payments.

By the way, the DOE representative advised to pay as little as possible in order to receive the maximum benefit from this loan consolidation plan.

Wed, 04/23/2014 - 00:00 | 4685443 Freddie
Freddie's picture

These things are the closest thing to full slavery for young people.  Student loans are incredibly evil and a form of child abuse.  Sadly, the parents just take it.  They sell their kids into a lifetime of debt slavery.

Tue, 04/22/2014 - 15:08 | 4683757 Bytor325
Bytor325's picture

I worked myself through school so i could graduate with no student debt, if only I'd been born 30 years later I coulda partied those 4 years away for free instead................and then another 2 on the way to an MFA in puppetry on the taxpayer dime.

Damn, if only my parents and grandparents knew about all this free shit from .gov in their day imagine the world we'd have today

 

Tue, 04/22/2014 - 17:36 | 4684260 trader1
trader1's picture

it's going to be ok old chap.

and isn't it kind of fair to not fault the present generation for the shitty groundwork that previous ones have set in terms of education and human development priorities?

time to reset, refresh, upgrade the entire sytem.  

it's going to be lots of fun.

hang on.

Tue, 04/22/2014 - 17:34 | 4684268 EconomicGenocide
EconomicGenocide's picture

Yeah and now all theses kids working parking cars and flipping burgers are paying for your SS, Medicare, QE supported investments and ZIRP house equity. YOU and your parents are why these kids are in this situation.

Tue, 04/22/2014 - 17:52 | 4684330 Freedumb
Freedumb's picture

I would argue you were fortunate to be able to cover your tuition and living expenses without debt. These days, unless that work is paying you $30 an hour or more, you wouldn't even be able to afford a state school, and who the hell is going to pay some 18-21 year old $30 an hour for part time work so they have time to attend class? Times have changed my friend and no one can "work their way through school to graduate with no debt" unless mommy and daddy are picking up the tab.

Tue, 04/22/2014 - 15:13 | 4683775 Joebloinvestor
Joebloinvestor's picture

Watch major relief be proposed right around election time.

Tue, 04/22/2014 - 15:18 | 4683782 zaphod42
zaphod42's picture

Since all this is is a way to get around bans on government support for relgious schools in the first place, the answer seems clear.  Just allow forgiveness of debt incurred at a public institution.  No graduates of religious schools need apply for debt forgiveness.  

 

Otherwise, just do what should have been done forever - join the rest of the World in educating our citizens for productive roles in society.  The benefits are too numerous to restate.  We all know it is the truth. 

 

Craig

 

edit:  Full disclosure:  I worked full time and went to night schools.  Graduated debt free.  Including law school.  Part paid by the US, though since I had GI bill for last 1/2 of the total time.

Tue, 04/22/2014 - 15:19 | 4683797 Save_America1st
Save_America1st's picture

so glad I'm done with that total rip-off.  After nearly 20 years of not being able to pay my student loans many times off and on...getting garnished, then getting the garnishment removed only to be able to pay the bare minimum each month which got me nowhere, then fucking around and getting garnished again.  I think I was garnished 3 times total all those years.  The last time was 2.5 years ago until just 2 weeks ago when I finally found out that it's all fucking paid off!  For the last 2.5 years those fuckers were raping me at 15% of my paychecks which didn't exactly make it easy to afford much else.  That was anywhere from 600 to a 1000 bucks a months, so this was like finally paying off a mortage.  Oh well...sure is nice to have that shit off my back.  Now at least I know when I work a bunch of overtime most of it's going to me instead of the fucking gooberment mafia and their douche bag IRS thugs. 

Tue, 04/22/2014 - 15:25 | 4683825 Duc888
Duc888's picture

 

 

"Now at least I know when I work a bunch of overtime most of it's going to me instead of the fucking gooberment mafia and their douche bag IRS thugs. "

 

Well, not really.  You'll see most of your overtime getting sucked up with taxes.

Tue, 04/22/2014 - 16:27 | 4684062 Save_America1st
Save_America1st's picture

yes, some of it, of course....but it's not even close to as much as it was having 15% chopped right off the top each payday along with the taxes.  So having an extra 600 to a 1000 bucks in my pocket each month is definitely better in my book. 

Tue, 04/22/2014 - 15:36 | 4683885 MFL8240
MFL8240's picture

How about answering them all the same, ...NO!  You got an education, now fuckin pay for it.

Tue, 04/22/2014 - 15:48 | 4683929 Angelo Misterioso
Angelo Misterioso's picture

this is just more of the trophy generation - everyone deserves a trophy and everyone is a winner and everyone deserves a college degree regardless of their natural proclivities... 

between the wife and I we borrowed over 175k for colleges and grad schools and it was all paid back within about 6 yrs of getting jobs - not a lot of dinners out during that time and others were buying houses...

by telling kids that they might not have to pay it back you create a perverse incentive to not even try...whole world has stopped trying because the ruling class is full of cheaters and riggers of the system......

Tue, 04/22/2014 - 15:59 | 4683974 LawsofPhysics
LawsofPhysics's picture

please, in the "modern" education system (especially in finance) things like moral hazard are simply "quiant terms", "relics" of the past of you will...

hedge accordingly.

Tue, 04/22/2014 - 15:57 | 4683967 LawsofPhysics
LawsofPhysics's picture

Wait, fucking lawyers wnat debt-forgiveness?!?!?

fuck em.

Tue, 04/22/2014 - 17:40 | 4684290 Matt
Matt's picture

I thought the real test to see if you made it as a lawyer, was whether you succeed in getting your student loans discharged.

Tue, 04/22/2014 - 15:58 | 4683969 rosiescenario
rosiescenario's picture

I am happy that at least a portion of my recent tax payment can go towards sending somebody's kid through college. I had asked my Representative to make sure of this and surprisingly that is just what happened. I had been concerned that all of it would be spent waging various wars around the world and at home (or in support of the BLM's army) in violation of my religious beliefs.

 

 

Tue, 04/22/2014 - 16:00 | 4683978 BlueCheeseBandit
BlueCheeseBandit's picture

Wow. When I was deciding whether to go to grad school, the debt forgiveness and pay as you earn programs were a huge factor. Without them, I definitely wouldn't have taken on this debt. So now we just cancel those parts of the deal unilaterally? Yeah, how about I cancel my part of the deal too.

If you need me, I'll be looking for work abroad.

Tue, 04/22/2014 - 17:04 | 4684187 BlueCheeseBandit
BlueCheeseBandit's picture

Just reread my note. Mandatory loan forgiveness after 25 years right there in black and white. Looks like I'm all good. Sorry newbs, the trees have been picked dry by those who went before you. Just took a lesson from the boomers.

Livin' in America! HUAH!

Tue, 04/22/2014 - 16:57 | 4684168 BobRocket
BobRocket's picture

Yellen is printing 65 thousand million dollars each month, Bernanke before her was printing 85 thousand million dollars per month.

 

Where is the inflation ?

 

They are printing this money to fill the holes that are being created by debt defaults of one kind or another. (it is an excercise in accounting)

 

Non-Expansionary QE I think they called it, a debt jubilee by another name.

 

They are just spreading the book, at one time all the US citizens debts were held on the Central Banks book which was backed by the US citizens, now the US citizens hold their own individual debt books but it all adds up to the same thing.

 

It is just accounting.

 

(the problem is that we are accounting for the wrong things)

 

 

Tue, 04/22/2014 - 17:00 | 4684176 corporatewhore
corporatewhore's picture

cap the fucking monthly payment idiots.

be in debt forever.

buy insurance to cover the debt at death.

problem fixed

Tue, 04/22/2014 - 17:03 | 4684183 trader1
trader1's picture

out of curiosity, where's an infographic on debt by degree category relative to % total a, b, ... degree-holding grads employed by industry?

Tue, 04/22/2014 - 19:57 | 4684728 FredFlintstone
FredFlintstone's picture

Or average debt by school type. My gut tells me that Devry, ITT, Univ of Phoenix, etc. are big time into signing em up, fleecing and dumping back out on the street without any so-called "degree". Can't we go after them and send the executives and board members to prison? Oh, right they are the ones paying the lobbyists to take congressmen to strip clubs and are contributing to their campaigns.

Your Government is looking the other way. They really don't give two shits now do they?

 

Tue, 04/22/2014 - 17:16 | 4684217 libertus
libertus's picture

I'm so sick of the enslavement of people through debt. I'm tired of the loans being used to control society and people into supporting the status quo. Revolution needs to happen one individual community and even business at a time by creating practices not dependent on cheap FED credit. 

Oplerno.com is my way of resisting by making education high quality and affordable. NO MORE STUDENT LOANS! What is yours? 

Tue, 04/22/2014 - 17:34 | 4684267 yellowsub
yellowsub's picture

Wait a minute, you mean these borrowers had no choice in the matter?

They were forced to borrow the money for school or a mortgage?

Just because my credit card limit has $10k doens't mean I spend it all.  

People need to start owning up to their own choice and make it work not cry and ask for a handout.

Tue, 04/22/2014 - 17:39 | 4684286 justsayin2u
justsayin2u's picture

dont take loans  is everybody effin helpless to live on what they make?

Tue, 04/22/2014 - 17:25 | 4684247 yellowsub
yellowsub's picture

You know the reason is that these people with these loans can't buy homes!

Put them to work to work it off to the public not forgive it for nothing!

 

Tue, 04/22/2014 - 17:25 | 4684248 Brokenarrow
Brokenarrow's picture

does anyone, but me, pay their fucking debts these days.

 wish I had something to renig on!

I would love to stiff everyone I owe a penny to.

Its the american way, isnt it! banks did it.....fuck.....why not me?

I have ome worthless stock certificates. I want to deposit them with Merrill Lynch. I want them to b valued t par/share. WHy not? This is what the banks did! They took worthless mort paper and the fed turned it into liquid cash. Why cant I do this?

The us has become a smelly turd of a lying, crooked hypocrisy

Tue, 04/22/2014 - 17:35 | 4684270 justsayin2u
justsayin2u's picture

my wife and i graduated in 82 with 30,000 in debt, 75000 in todays dollars.  We paid 9.5% and had them paid off by 1992 - 420/mo..  these kids are a bunch of effin babys.  Make them pay it back.  if you do loan forgiveness, then pay the kids that paid their own way 40k$ each also-like my son who graduates in december after 6 years with no debt by working at costco full time and taking slightly less than a full load and raising a family with 3 kids at the same time.  Computer science.

Tue, 04/22/2014 - 18:01 | 4684362 trader1
trader1's picture

so wtf are you complaining on ZH for?  why don't you call your congressman?

or are you expecting your congressman and his/her aides to be sifting through your ZH posts to "read your mind"?

 

Tue, 04/22/2014 - 17:38 | 4684280 ChargingHandle
ChargingHandle's picture

Costs spiraling out of control and the government is involved...? You don't say.The same will be said for our healthcare costs. 

Tue, 04/22/2014 - 17:42 | 4684295 Dickweed Wang
Dickweed Wang's picture

Isn't the money for these loans created out of thin air??

Tue, 04/22/2014 - 17:42 | 4684298 EconomicGenocide
EconomicGenocide's picture

I have read a lot of different things on this thread for reasons in regard to forgiveness which in turn is just deferment.

 

But there is one thing that is becoming more and more obvious. A lot of young people in the not so distant future, like maybe next month, are going to be offered complete forgiveness via military enlistment. Zionism makes Nazism look like a bump in the road!

Tue, 04/22/2014 - 17:53 | 4684336 Bastiat
Bastiat's picture

If it hasn't been mentioned, it should not be forgotten that the change in law to make student loans immune to bankrupcy took place under CLINTON.

Tue, 04/22/2014 - 19:35 | 4684648 BeetleBailey
BeetleBailey's picture

YES....and millions of fucktoads still "love" the lying cunt...the ugly, bulbous nosed shit-eater....

Tue, 04/22/2014 - 20:03 | 4684764 Bemused Observer
Bemused Observer's picture

Damned right it did! Along with a lot of other things that I will NEVER forgive him for! That is because Clinton was no Democrat, he was Republican-lite. Just like Obama.

But we never had the chance to see that, because as soon as Obama won, we got the damned teabaggers and their ridiculous Kenyan Socialist Muslim crap!!! Which created a distraction, and led to Obama being vigorously defended by Democrats. The teabaggers kept the Dems so busy chasing birth certificates, and refuting GlennBeckian accusations, ad nauseum, that they didn't notice how decidedly UN-socialist, how UN-Democratic he really was!

Early in his 1st term we got a glimpse of where his loyalties really lay. When he named Geitner for the Treasury, I wanted to puke! But guess what the Dems were all yapping about? Tea Party politics! Tea Party candidates, I'm not a witch, voter suppression, abortion rights, birth control (hold an aspirin between your knees) and all the other garbage being bandied about. But nobody ever put Obama on the spot about how he let those bankers run out the clock on being brought to justice.

So Obama sneaks around all the "noise" and enacts some very Republican policies after running as a Hope and Change Democrat. And nobody notices, because they're too busy being stupid, being distracted. Too busy defending Obama against the ridiculous to notice what he has been doing in the real-world...

I wonder if Clinton got away with so much for the same reasons...

Tue, 04/22/2014 - 23:10 | 4685328 cynicalskeptic
cynicalskeptic's picture

GATT came in under Clinton as did the repeal of Glass-Steagall.

what more proof do you need that there's no real difference between the two parties?

 

The God, gays and guns routine is a mere distraction to keep the sheeple from paying attention to the real issues like job offshoring, deregulation and the outright looting of the Treasury.

Wed, 04/23/2014 - 06:03 | 4685770 pherron2
pherron2's picture

you left out the commodities futures exchange act, that didn't help us any

Tue, 04/22/2014 - 18:01 | 4684363 BlueCheeseBandit
BlueCheeseBandit's picture

14 billion a year for students? Omg! Where will we get the money for the next time we need to give wealthy investment bankers a trillion dollars in a day?

Priorities.

Tue, 04/22/2014 - 18:29 | 4684434 RevRex
RevRex's picture

Dimmedat free stewdunt lone four mie educashuns everywun knead two goes too collich....

Tue, 04/22/2014 - 18:42 | 4684465 Sheppy
Sheppy's picture

As long as the Fed is willing to lend any illiterate the money to attend Northeastern at 50k/yr, then some illiterate is going to borrow it, flunk out, and be indebted for life to the Fed at 6.8% return (my wife's current rate). Talk about the Bank of America!

And as long as the tax payer is "willing" to lend, the institutions of (puff, sough) higher learning are willing to raise tuition rates ever higher. Talk about hubba bubba... when's this one gonna burst.

Tue, 04/22/2014 - 18:41 | 4684466 DarthVaderMentor
DarthVaderMentor's picture

Another hole in the dike to plug, Obama.

 

I guess one could take their degree away and non-certify it like they did at Brandeis last week?

 

Tue, 04/22/2014 - 18:45 | 4684478 AdvancingTime
AdvancingTime's picture

A student loan is designed to help students pay for university tuition, books, and living expenses. It seems that many students are borrowing against their future at an almost unimaginable pace, unfortunately the money is often used for things other then education.

Too many young people and others taking student loans include in their "living expenses" cars, trips, vacations and more. All this has a very dark side that will effect the lives of these borrowers going forward and has the potential to grow to crisis dimensions in the future. More on this subject in the article below.

http://brucewilds.blogspot.com/2012/04/students-borrowing-against-future...

Tue, 04/22/2014 - 18:54 | 4684500 BlueCheeseBandit
BlueCheeseBandit's picture

"It seems that many students are borrowing against their future at an almost unimaginable pace"

I think most of America's youth know on some level that they don't have futures. So when you lend against their future, jokes on you sucker!

I love how the government only seems to have begun to realize how big this problem is when they got the bill.

Planning ahead is for suckers, I guess. Too bad we don't have institutions that train people to think critically. Maybe we should invent some.

Tue, 04/22/2014 - 21:28 | 4685073 Sheppy
Sheppy's picture

What does the common core do, if not influence our youth to think critically? /sarc

Wed, 04/23/2014 - 00:49 | 4685509 Aussiekiwi
Aussiekiwi's picture

Borrowing against the future.... now where have I heard of that being done before now? almost like an entire economy is borrowing against the future...nah, must be imagining it,....that would be mind incredibly irresponsible.

Tue, 04/22/2014 - 18:47 | 4684480 MrTouchdown
MrTouchdown's picture

"Make this program cost at least $10B or you can't be my golf caddie anymore Shenikwa" - Barry O

Tue, 04/22/2014 - 18:52 | 4684495 Smiley
Smiley's picture

In other words:

"GIMME GIMME GIMME!  I'M FUCKING ENTITLED!!!"

Tue, 04/22/2014 - 19:33 | 4684629 BeetleBailey
BeetleBailey's picture

Exactly right

"The 'popularity' of the student loan bailout plan surged after Obama promoted it in 2012, and now the administration must back-track as costs have massively outpaced government predictions."

and a BIG FUCK YOU TO BARRY SOETERO FUCKBAMA...YOU FUCKER...BY DESIGN EH...YOU CUNT....

FUCK YOU

....AND A SPECIAL, BITING, VITRIOL-FUELED FUCK YOU TO ALL THE STUPID CUNTS STILL ELECTED THE BASTARD...FRAUD OR NO FRAUD...VOTES COUNTING OR OTHERWISE....

Tue, 04/22/2014 - 20:44 | 4684525 Seek_Truth
Seek_Truth's picture

Best place to spend your College Loan:

http://www.boss-inc.com/

PS- The Boulder Outdoor Survival School. This is where an increasing percentage of "College Loan" recipients should have spent their time and (other peoples) money.

 

 

 

Tue, 04/22/2014 - 19:33 | 4684639 eucalyptus
eucalyptus's picture

FYI, certain jobs in the Federal Government pay back student loans as part of a 'perk'. FBI, CIA, DOJ i know do this.

Tue, 04/22/2014 - 19:34 | 4684641 waterhorse
waterhorse's picture

If this student bailout is anything like HARP or HAMP (where homeowners were supposed to be helped but it was a backdoor bailout to banksters), students won't be helped, but you can bet your sweet bippy the banksters WILL.

Tue, 04/22/2014 - 19:34 | 4684644 kchrisc
kchrisc's picture

Who needs a "law?!" Just quit paying. With deferments, it will take beyond the time the DC US has left for them to come after you.

An American not DC US.

 

“Call Mary the Guillotine. She takes good bankster head.”

Tue, 04/22/2014 - 19:35 | 4684645 jomama
jomama's picture

fuck it!  i might as well get me a student loan!

Tue, 04/22/2014 - 19:36 | 4684654 Bemused Observer
Bemused Observer's picture

"Loan guarantees create incentives for students to borrow too much to attend college, definitely contributing to rising college prices for everyone,"

There, I fixed it.

This is an easy one. Take the bankruptcy exemption away, and put student loans back on the table with all the other consumer debt. Why the hell should student loans be treated any differently from other debt? What are they, from God Himself or something?

And to those who'd say, "But the bank can't repossess your education...", so the f*ck WHAT? They can't repossess that lobster dinner I charged 2 years ago either, or the gym membership from last fall. Yet THOSE can be discharged. Whether or not the creditor can take possession is irrelevant with unsecured debt, bankruptcy is a constitutional right for debtors who are unable to pay their debts, period. The debtor does not get off scot-free, his credit is trashed, and he's forced way down the economic food-chain for 7 years. He loses whatever is secured, often the house and car if there is enough equity there. And if he happens to be unemployed, that bankruptcy isn't going to help in the job search. Hardly getting off scot-free.

The bank loses the loan, but then that's what interest is for, to cover that risk. But they also learn a valuable lesson in vetting their loan applicants! So that maybe next time they won't be so quick to hand somebody tens of thousands of dollars to study shrimp-farming or 17th century chamber music. They'll say, "Wait a minute there young student...what are your chances of ever actually WORKING in this field and paying me back?"

This came about because of those med students who were graduating, then declaring bankruptcy to ditch their (considerable) loans, then opening a practice free and clear after getting their discharges. That would have been fairly easy to fix, by going after those students for fraud instead of making bankruptcy impossible for everyone. But no...that would have been the sensible thing to do. So they decide instead to create a heads I win, tails you lose situation for their banker friends, and now we are looking at a HUGE problem.

What part of "They aren't going to be paying it back" don't these folks understand?

 

 

 

Tue, 04/22/2014 - 21:12 | 4685025 Singelguy
Singelguy's picture

Since the loans are guaranteed by the government, the banks should be charging zero interest since there is zero risk.

I agree that student loans should be able to be discharged through bankruptcy. It would severely limit the amount of money a student could borrow and significantly reduce tuition fees, hopefully to a level that is actually worth the value of the education received.

Tue, 04/22/2014 - 21:16 | 4685031 Yes_Questions
Yes_Questions's picture

 

 

ABSOLUTEY CORRECT!!!!

 

+1.3 Trillion!!!

Tue, 04/22/2014 - 19:44 | 4684684 tony bonn
tony bonn's picture

every college or university president should be prosecuted under rico for fraud, racketeering, conspiracy to fraud, and whatever else can be thrown at them. they are financial thugs and their criminal enterprises should be stopped. their product is overpriced and often unnecessary. tuition has become a form of protection money in the job market - a total shakedown. and these scumbags get away with raising prices on grossly overpriced product year after year....all unrepayable debt should be discharged through bankruptcy and moral hazard restored to its rightful place....fuck the debtors' prisons and the creditor - it takes 2 to play the game of debt servitude...

Tue, 04/22/2014 - 19:48 | 4684699 razorthin
razorthin's picture

Assholes.  Whether the government loans or forgives (pays) AAAANND the banksters loan (never forgive or pay), the result is higher prices.

Tue, 04/22/2014 - 20:06 | 4684777 rsnoble
rsnoble's picture

"Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone"

 

Bullfuckingshit!  That is narrow-minded as FUCK!  Fact of the matter.........if the deuchbag gov't would get OUT of the loan business tuition prices would come crashing down to reality.  The reality as to where $50k for an engineering degree is totally ludicrous when there ARE NO FUCKING OPPORTUNITIES for most of them.

If loans were forgived at the rate of 85% it would reflect the true cost/worth of the loan.

But we all know about anything that has to do with the goddamn truth these days.

As with anything else the gov't touches.......complete fucking disaster.

Tue, 04/22/2014 - 20:27 | 4684850 Handful of Dust
Handful of Dust's picture

Wee want moar munee ..... 'Advances Degree in Basket Weaving of Ancient Cultures' [the class with all the Hot Chicks] awaits me.

Tue, 04/22/2014 - 20:37 | 4684891 loveyajimbo
loveyajimbo's picture

"Demanding"?!!?!?  hey, students, FUCK YOU!!  Obunga and Holder are willing to help Roid Reid steal cattle, but student loans are forgiven???  How about forgiving them IF the lazy brats serve 5 big ones in the Army with NO PAY??

Tue, 04/22/2014 - 20:39 | 4684898 bh2
bh2's picture

Oh, yeah....this was another magic money "program" that was to cost taxpayers "nothing".

Tue, 04/22/2014 - 20:46 | 4684903 Mac1492
Mac1492's picture

To state the obvious this doesn't end well.. I graduated 5 years ago with a bsba in management and a minor in economics.. currently I am an apprentice with a roto rooter guy... If I had to do it over again I would have spent the money on a hard science degree, the only upside right now is when shit hits the fan at least I know how to keep it flowing.

Tue, 04/22/2014 - 20:49 | 4684934 Seek_Truth
Seek_Truth's picture

Engineering, for those who want to make money and burn out early.

PS- For what shall it profit a man, if he shall gain the whole world, and lose his own soul? - Mark 8:36

PPS-

19“Do not store up for yourselves treasures on earth, where moths and vermin destroy, and where thieves break in and steal. 20But store up for yourselves treasures in heaven, where moths and vermin do not destroy, and where thieves do not break in and steal. 21For where your treasure is, there your heart will be also.

22“The eye is the lamp of the body. If your eyes are healthy,c your whole body will be full of light. 23But if your eyes are unhealthy,d your whole body will be full of darkness. If then the light within you is darkness, how great is that darkness!

24“No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money. - Matthew ^:19-24

Wed, 04/23/2014 - 00:44 | 4685503 Aussiekiwi
Aussiekiwi's picture

I think the FED might disagree with you on parts of that.

Tue, 04/22/2014 - 21:02 | 4684988 NoDecaf
NoDecaf's picture

Tyler forgot to mention the Master-bater course for comparison. Costs range from $19.95 to $29.95 per month for an online porn subscription and some space in the basement. In today's economic climate this offers the best value for budget conscious parents.

Tue, 04/22/2014 - 21:08 | 4685005 Yes_Questions
Yes_Questions's picture

 

 

This is what happens when debt cannot be properly discharged through bankruptcy.

 

and there is no debt more likely to non-perform than a student loan.  The credit is created on a fiction that the borrower will be able to repay.  Its worse than "Fog a Mirror" loan approval, but nearly impossible to discharge like any other debt?  and a .gov guarantee is not sufficient an excuse for this.  Too bad for us tax payers.  Would we be so lucky to ONLY have to back bad student loan debt..

 

Student loan debt must be deprived of its special status and let the chips fall where they may.

 

 

Tue, 04/22/2014 - 21:10 | 4685014 deerhunter
deerhunter's picture

Mac,, stick with the roto rooter company and you will make more money than most any 4 year degrees will earn you.  i am exective chef with considerable training.  Hotel and restaurant management is a brutal way to make a living.  I was a younger man then and haven't worked in the food industry since 1989.  I have since owned my own business for a couple years and after that have sold home improvements for almost 20 years.  Services and products homeowners need if you are able to sell can make you a good living.  I love sales because I get paid exactly what I am worth and start the first of every month at zero.  If all of America was paid based on actual production we would be living in a different country.  Stick with rotorooter and you may be in management before you know it.  I have managed professional kitchen help,  whole restaurants and sales crews in two major midwest cities.  I prefer just selling and not managing and training constantly.  There is a world of ways to make a living.  Stay flexible.  You will do just fine.  My two cents worth and forty years of work. 

 

Tue, 04/22/2014 - 21:25 | 4685060 NoDecaf
NoDecaf's picture

I think you are lucky in one respect, going from the culinary field to plumbing is probably an easier transition than the other way around.

Tue, 04/22/2014 - 21:32 | 4685082 malek
malek's picture

Next up:

A study on the incentives created for the lenders by disallowing bankruptcy shedding of student debt.  (/dream)

Tue, 04/22/2014 - 22:25 | 4685216 MeBizarro
MeBizarro's picture

There was an incentive when Bush signed into law in '05 revamping bankruptcy laws (really went through without people realizing it at first) for private lenders but private lenders got forced out of the higher ed market for the most part in March '10 when Obama signed the Affordable Care Act. 

It didn't remove the problem but it utterly absurd that the federal gov't was backing private sector higher education loans with no risk of default since they couldn't be discharged though personal bankruptcy. 

Wed, 04/23/2014 - 12:48 | 4686962 malek
malek's picture

You're talking in riddles.

Yes, W. removed the bankruptcy clause for student loans, as this was the hook for my comment.

but private lenders got forced out of the higher ed market for the most part in March '10 when Obama signed the Affordable Care Act.

1. How did Obamacare force private lenders out of the student loan market (implying almost all lending since is done directly by the govt)?
2. As overall student loans have exploded even since, what does that matter for the debts as they are still non-dischargeable?
3. Are you trying to construct some silver lining in but at least it's not private lenders making a risk-free profit anymore because of Obamacare??

If yes, I stand in awe over so much distorted views on importance: everything is OK so long as no private party can make a profit but no worries if the govt makes a profit by extorting everyone <facepalm>

Tue, 04/22/2014 - 21:47 | 4685124 deerhunter
deerhunter's picture

dont know for sure nodecaf,  in hospitality field one puts up with a lot of shit of a different nature from the clientele but in reality we all work for others.  I always laugh when I hear self made man.  Even the top of the food chain has people they answer to.

Tue, 04/22/2014 - 21:50 | 4685134 homiegot
homiegot's picture

Why should we forgive stupid people?

Wed, 04/23/2014 - 00:08 | 4685455 ebworthen
ebworthen's picture

Why should they forgive stupid banks/insurers/corporations?

But they did.

Wed, 04/23/2014 - 01:31 | 4685564 Morla
Morla's picture

Oh they're not stupid, just taking the risk-free profits for helping the government enslave the youth. If there were a government by the people and for the people we'd revoke the guarantees and spit in their faces.

Wed, 04/23/2014 - 00:25 | 4685479 Quantum Darwinism
Quantum Darwinism's picture

I'm guilty but I don't see the move as stupid. In fact, seems to me you poor suckers still clinging to the system being fully law-abiding, working hard and being net positive taxpayers, thereby contributing to keep the current broken debt money system running, are the stupid people.

Wed, 04/23/2014 - 01:40 | 4685580 Morla
Morla's picture

If we didn't, who would be left to forgive? Smart crooks? That's what we're already doing.. "Fool me once, shame on you", remember? Falling for a pack of lies as an 18yo should not result in the yoke of slavery for life.

Tue, 04/22/2014 - 23:48 | 4685428 Morla
Morla's picture

Doesn't have to cost the government a dime. Revoke the loan guarantees and let the banks sleep in the bed they've made. After all, if they've been making these loans responsibly, they should have nothing to worry about.. And if they haven't, they deserve what they get for trying to screw us over.

Wed, 04/23/2014 - 01:26 | 4685558 dunce
dunce's picture

Obama is innumerate, but he does understand general quantities like more and less. The spending does not matter because increased debt just means higher taxes, and throwing printed money around buys more votes. The people that voted for him deserve kinky haired mud colored morons for grand children.

Wed, 04/23/2014 - 16:49 | 4687934 Alien 851
Alien 851's picture

No paychecks, you work, you earn IRS credits, what is not used to pay for all your entitlements, will appear on your federal debit card.

Driver's license, registrations, medical, and dental will all be at the secretary of state's offices.  Food at closed KMart Super Stores.  Live in HHS housing blocks.

Use your debit card on TVs, Games, and movies. You will love it, nothing to worry about comrade.

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