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US Government Proposes To Ease Student Loan Standards Even Further
Because it worked so well for housing finance in the last bubble, the US government is poised to ease loan standards on this cycle's biggest bubble - student debt. It appears being punched in the face by over-leveraged, over-debted, over-priced housing finance was not enough and as Bloomberg reports, parents whose financial standing disqualify them from most loans will have an easier time borrowing to pay their children’s college costs under a U.S. government proposal to ease credit standards. Come on in - the debt-serf water is warm. With student loan delinquencies already soaring to record highs, some are actually questioning the government's sanity as consumer advotaes warn "a decent number of people are going to get in trouble."
Parents whose financial standing disqualify them from most loans may have an easier time borrowing to pay their children’s college costs under a U.S. government proposal to ease credit standards.
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The Education Department wants to look at “adverse credit” over two years instead of five and consider approving loans even if parents have delinquent credit balances, according to an agency document released this month.
However, the plan doesn’t sit well with consumer advocates and economists, who are sounding an alarm.
Consumer advocates say loosening the norms for parent PLUS loans will only hurt borrowers, and default rates, already on the rise, will continue to climb.
“Some of these loan characteristics -- potential payment shocks and not verifying a borrower’s income -- certainly strongly contributed to the mortgage crisis,”
Just 45 percent of the outstanding $62 billion in parent loans are being actively repaid, mostly because borrowers don’t need to make payments until six months after their children graduate or leave college, according to department data. Families are struggling to pay for college as the costs increase faster than the rate of inflation.
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“A good share of these families are not the most financially secure households,” said Thomas Weko, a former Education Department official who is managing researcher for post-secondary education at the nonprofit American Institutes for Research in Washington. “A decent number of people are going to get in trouble.”
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“Until we bring in some element of the ability to repay, I don’t know if we’re providing the right loans to the right people in the right amounts,” said Suzanne Martindale, an attorney for Consumers Union. “That’s frightening.”
Of course - none of that matters - all that matters is credit extension and vote-buying. With a Fed funding Congress for nothing, why not just enable every Tom, Dick, and Harriet to borrow up to their neck, get a degree that does nothing for their future prospects, stalls any housing recovery even further, and leaves yet more of a younger generation encumbered to their parents' credit.
Oh and when this whole thing hits the fan - no one, not one politician, will be held accountable, will have seen it coming, would have been responsible for the legislation... Welcome to the United States of No Consequence.
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Yeah, this will not end well.
I told my friends 18 year old kid that he would be better off getting a job than going to college and getting 150k in debt.
Sure, it's easier to corrupt someone elses kids. I don't know what community college still offers a BA program for $150K but you should think about what you would tell your own child. That is assuming you were man enough to have a stable relationship with a woman and produce offspring. I'm guessing you didn't or can't.
College is the best investment a person can make and it's never too late to apply yourself.
How much did your lobotomy cost? Just curious.
as one of the Top Advisors to misteryellens, I have been working out details for offering Debt Instruments to pets.
dogs.
cats.
parakeets.
goldfish.
turtles.
in order for them to pay the new Mandatory Veterinary Insurance tax^H^H^Hmandate
misteryellens suggested calling it a "shot in the arm" for the economy, but I pointed out that birds and fish don't exactly have what you call "arms"
hugs,
mister attenborough
That top chart is about as damning as any I have ever seen on this site
It needs to be generated using the same scale, rather than a different scale for each set of data points.
whatever, the y axis crosses zero on both. Pretty hard to ignore this turd. Something happened in 2012; I wonder what it was.
"Easing standards for student loans," simply means a continued/deeper subsidy for college adminsitrators and professors. They don't give a hoot about 'student education' but they do care abut handing money thru the student to the pockets of college administrators and penions.
That's my take on this issue.
Waiting for default rates on Stafford loans to hit 30%, then I'll quit paying. Those schmucks are so understaffed, and me living over seas -- meh.
Besides -- they brought it on themselves when they started lending out money irrespective of the degree field. When one can borrow $400k for a UG in feminist studies -- time to take advantage of the system while you can. This shit is going to burn.
It needs to be generated using the same scale, rather than a different scale for each set of data points.
Nope. Not unless log scaling was used for the y-axes. You do know what log scaling is, right?
College is not for most people. I get your point about giving advice to other people's children. All of my children were reading at a 12th grade level early in grade school. So WTF were they going to teach them then next 7 to 8 years? Most children should stop at about 8th grade or maybe 10th grade. If you think I am full of it, then you don't get out much.We are just warehousing kids at taxpayers expense for the most part. Compulsory education is a breeding ground for bad things in many children. Children who are college material can do the work at 10th grade or sooner.
The liberal delusion that teachers + taxpayer money will create utopia is just that... a delusion. But its not about the "kids" is it? It is about political power and pensions and so forth.
IMO 20 to 25% should be college graduates. another 20 to 25% should be 2 year tech school graduates. The remaining 50 to 60% should get a job at age 16.
It takes until 18 for kids to learn the fundamentals and prepare for college. Home schooling is shown to produce warped antisocial personalities.
Who said anything about home schooling? I was ready for college at 16 as are most who will ever be ready.
Oh, tell that to the Europeans (the part about the need to be 18 to go to college).
.
Fixed it fer ya.
Are you a retard, or a troll?
Or a retarded troll?
Data please?
Home schooling produced... inventors such as Thomas Edison, Albert Einstein, A.G . Bell, Ben Franklin, Wright Brothers, and Eli Whitney. Presidents such as FDR, Teddy Roosevelt, Abe Lincoln ( I suppose this actually makes your case about the derangment of home schoolers). US Generals such as Generals, Patton, McArthur, Pershing, and Lee. Blake Griffin of the LA Clippers was also home schooled.
Do I need to continue?
It takes until age 18 for Gummint run indoctrination day-camps to fuck up children's minds so badly that they are finally capable of matriculating through the Socialist University system. Government even fucks that up, now it wants kids before they even reach age 5.
Basically agree Fred but colleges today are not what they were in our day. I was fortunate to have attended 2 fabulous private colleges, Whitworth and Gonzaga before transferring to San Diego State to finish my micro degree. My organic chemistry final at Gonzaga was 10 hours long building complex molecules. Horrendous. I was damn lucky to have built the isomer on a few.
My finals at state were multiple choice bubble tests. Life isn't a multiple choice test. No essays on any of my finals. At the private colleges most of my finals were all essays including my classes in microbiology. I am so fortunate to have experienced a Classical education that really challenged me to think. I believe college today is simply to indoctrinate rather than educate unless you are studying the hard sciences.
I guess I feel all children would do well to have a Classical education. Not that it should cost 150k. It's just when you must defend and properly debate ideas it becomes harder for TPTB to dupe the population.
Miffed;-)
We be old skool.
Most public school schoolteachers I have met are sub-100 IQ tools.
That's a little harsh. Maybe 97 to 108.
I agree with this (FredFlintstone's comment) -- this is more or less the model of education in Germany, where they have "Gymnasium" for the university-track students, "Fachhochschule" for the technical-track, and "Realhochschule" for the students less inclined to go into either highly skilled technical professions or professions for which a university education is essentially a prerequisite.
I think that approach deserves a good deal of the credit for fueling Germany's robust manufacturing sector, much of which is dominated by "Mittelstand" firms which (without being able to pin down a precise definition) tend to be 50-200 employee businesses that are fairly specialized in one sort of product area. They are sustained by a constant influx of skilled people who might otherwise have been corralled into universities in the US or the UK, and who maybe would have found that the university environment really wasn't their cup of tea and end up having wasted a good deal of time (and an increasingly incredible amount of money)
Zirp, 3 of the top ten jobs require no college education, and if you throw in trades, it's 8 out of 10.
Funny comment seeing as 50% of all marriages end in divorce (and I suspect it's higher), and 70% of the time it's initiated by the woman.
I didn't know that in order to call yourself a man, you had to get fucked over by a woman first.
College is a good investment only in certain instances. The majority of the sheep coming out of schools these days are coming out with irrelavant degrees. There's no way in hell you can say someone who studied a general arts & science degree is a more "complete" person than someone who didn't go to college at all.
If my own kid came up to me and said they wanted to go to school and take on $50K in debt to become a history, arts, geography degree I'd flat out tell them they're wasting their time and money and to go work in a McDonalds for a year and see what it's really like out there and then decide again in a years time.
I have a 25 year old nephew who first got a bachelor’s degree in English and then graduated with a master’s degree in education from UCLA over a year ago. He hasn’t been able to find a full time job. He’s still living at home and works part-time as a park aid for LA County.
Wow!! Stupid is really strong with this one!
.
Your post is stupid, and only serves to prove the saying:
"Some minds should be cultivated, others plowed under."
I told my daughter it's CC or work, and she opted to do both and is actually 100% self supporting at the moment.
That would not be possible if she went to the university here, indeed she'd be racking up close to 20K a year in debt.
The current education evironment is insane. Even if you go for a sTEm degree, while you'll more than break even you're overpaying horribly.
The longer the pumping of the higher ed bubble is the greater the ability for new institutions like Oplerno.com to take advantage of the collapse. The business model is not dependent upon ever increasing amounts of student loans and is actually going to deliver a better and cheaper education. It is even more responsive. The catalogue of classes has just passed 100.
Now they just need to get the word out.
The collapse is here, this story just makes it obvious!
Good times are coming.
Maleficent.
subprime loans not dischargeable in bankruptcy.
excellent! [/mr. burns]
Government sets the tuition rates (since they are practically single-payer in the higher education world) and then 'fixes' it by making it easier to sign up for debt-serfdom to pay for it.
And just when you thought you parents' basement was a safe place to live after graduation. They'll be taking that, too.
Now if we can just get the grandparents on the hook, we'll be golden. Oh, and make the debt roll to your children as well, if you don't pay it off.
Govvy doesn't set tuition rates but like healthcare they have made it a third party payer system. And like healthcare that leads to huge inflation rates as consumers are typically not concerned with costs because for consumer there is no point of purchase payment. Anytime you have a third party payer system costs will rise at a very high rate before there is broad recognition that costs are out of control. It would not happen if the consumer was paying for the service at the point of purchase. Highly readible access to capital leads to higher prices as demand goes up. Think about the housing bubble. Exact same thing. Unnatural access to capital lead to unnatural demand and unnatural prices. Making it easier to get student loans will only lead to even higher tuition costs, leading to higher debt levels and ultimately an uglier end.
Forward Comrades into the singularity of student loans!
It looks more like a black hole from which dreams cannot escape.
I actually support this proposal, with one minor modification. Each of the loans must be cosigned by any Department of Education employee, who will be personally liable for paying back the loan if it goes into default.
I mean, hey, if it's such a good idea, then why not?
That will happen as soon as children of congressmen and senators are forced to enlist.
Jubah-lee! Jubah-lee! Hoo Hoo Hoo
You think the Government-Financial Complex is going to discharge any debts?
That's it. FUCK it. I'm not paying income taxes AGAIN....ever.
COME AND GIT ME YOU FUCKS!
Obama-Care
Obama-Phone
Obama-Education
Obama-Food
Obama-Nazi-Youth
What's really going on here?
Fema Coffins that's what.
http://4.bp.blogspot.com/-C3WWPvGjp3g/Tx2NADAZHwI/AAAAAAAABj4/nMPSJEVAaa...
I wonder if there is a market for coffin hotels ... take a cargo container, weld some supports and dividers, add electricity, ...
Rent is too damn high!
they will work any crack to pump more "credit money" into the system to keep this pile of dung moving forward. Ol' MEL WATT is working the FANNIE, FREDDIE machine. More of the same. Just a waiting game for the grand finally.
Traitors, one and all. The unjustifiably high tuition rates at US universities is a national tragedy. And for the US government to perpetuate the situation is inherently counter to the interests of the people they SHOULD represent (because, as we all know, they do not actually represent the people they are intended to). These actions are un-American.
I agree..the problem is the high cost and creating more easy debt is not the solution that benefits those attempting to getan education...it's another 'effing wealth transfer scam.
Navy, I concur completely with your view. These people really ARE TRAITORS to the notion of "Public Service".
Every breath they breath they breath for their owners interests and, as such, they have one and all committed crimes in enriching themselves and their cronies.
They all belong in prison with common real criminals, not the non-violent pot heads they have in there now. They should all be made to live in a cell for the rest of their stinkin lives.
I can even imagine most of them being made to do revolting nasty thing to other inmates who only know the law of the jungle. If there isn't any feminine company to be had.....well, you get the picture.
I believe that there is an opportunity in this fiasco, however. With some organized effort, I believe the college students of America should rise up and lock out their schools and demand that they will not attend any classes AT ALL and IN CONCERT untill all student debt is discharged en mass. An action like that would collaspe the Universities and throw the financils into chaos, just what we need, a trigger.
I'd say the action should begin 2 weeks before the mid-term elections and would serve to expose the whores gaming the gaming.
Finally people need to take a stand and turn these crooks away from the trough.
If you are inclined to assist, I am going to advocate for just such an action and I believe that these young people can start the end of these criminals and there's a shit load of them!
God Bless America and THANK YOU, Sir, for your service
Tomorrow's headline: US Colleges Propose Raising Prices To Absorb Additional Spending Power From US Government Proposal To Ease Student Loan Standards Even Further
And how many kids can avoid this trap? Just like with housing, lax lending makes it hard to not borrow.
Max out your home and student loans and buy PMs. Then leave the country.
You should take your own advice and go for it. I'll be comfortable at home the day you are pulled from your spider hole stinking all to hell and in need of a shave. You gold bugs need to seek mental healthcare.
Right hold dollars. $1 held for the past 100 years has devalued 97% (since the Fed debut). So hate gold dumbass but don't be a hater to those that are looking for a way to protect against a monetary system that necessarily destroys the value of the unfortunate form of trade we are forced to accept in exchange for hard work. You fucksticks hating gold have absolutely no idea what the fuck you are talking about unless you do in which case you know the score and wouldn't be out here touting the irrelevance of gold. Do your homework.
ZIRP"""ZIRP""" CALLING ZIRP!!! OWN network on line 1....
This is why student debt is so important or rather so appealing to the powers that be...
http://www.becauseihatemondays.com/2014/05/22/student-debt-the-good-the-bad-and-the-ugly/
I honestly expect that we'll start to read stories about kids who study something portable and then promptly default on the loans and emigrate for good. Mark my words, American tax dollars will inadvertantly fund a mini brain drain of engineers and dentists to Canada, Ireland, and suchlike.
You can count on legislation being passed to prevent that. If the IRS can reach into swiss bank accounts for tax cheats, they sure as hell can garnish wages of graduates in Ireland.
Seriously they'll need to go to places far further off the grid, like Cuba or Venezuela, to avoid the long arm of uncle sam from picking their pockets.
Not if they are paid in Cryptocurrency (ie: Bitcoin)
Harvesting signatures for their cash value?
You no longer have the choice to opt out of being a slave.
All your base are belong to us.
It is not possible for everyone to be above average. It is not possible to have a tribe of only chiefs and no indians. The majority of people must simply work and be average. There is nothing wrong with this except when you are part of a sick culture where so many of the rich got to where they are by backstabbing and cheating and then laughing at the people that got them there in the first place.
Fogging a mirror is no longer required
"the US government is poised to ease loan standards on this cycle's biggest bubble - student debt."
as it should.
but it also should repeal the law that made student loans non dis-chargeable through bankruptcy.
not that a non dis-chargeable lifetime contract at an ever increasing rate of interest would entice banks to lend to people they knew would become their capital slaves for a lifetime.
:)
What makes this extra scary-evil is that these are loans to the parents. The loans to the kids are largely going to ultimately be forgiven (after ten years of working for the government, or 20 years in the private sector), and even up til then only partially paid (the amount you must pay back each month is limited to a percentage of your income). But these repayment percentage constraints, and these forgiveness programs, do not apply to loans taken out by parents!!!!!!!! The parents will be pursued to the ends of the earth, and the ends of their days, for this money, long after their kid has dropped out of their media studies program.
There was just an article in the WSJ about the difficulty recent graduates are having, getting jobs. They mentioned a young woman who had gone to a decent public university, had a 3.9 average, had worked the whole time, and had had many unpaid internships. All she could find on graduation was a job as a receptionist, making $8.50/hour. Then they disclosed her major: media studies. I would say she is doing very well in the job market, considering that.
Now, not everyone can study STEM topics. But if they can't or truly don't want to, they can major in history or English or philosophy and read texts written by mankind's other geniuses (and ideally avoid debt while doing it). Four years of media studies, good lord, that is just disgusting.
Save everyone a lot of grief and money: cut out the middleman banksters and .gov reinsurers. Provide free education for all who want it. Let schools support themselves through private endowments, concessions (bookstore, McDonalds, Starbucks, etc.)
YeeeeeeeHaaaaaaaa. Thank you German, French and English taxpayers. And a special thanks to Belgium.
All good patriots borrow money. Cue shot the flag, anthem and the obligatory tears.
It will end when parents stop sending their children to college. Choke off the demand and the cost of the supply eventually goes down.
Force 1/2 these worthless instiutions to go belly up, have a massive restrucuring of the curriculum , cut administrative staff by 2/3 or more and STOP the student loan subsidy.
This is the the only way tuition costs will go down.
Hey, I work in Student Loan Collections these days. Bullish for me...lmao
Come on underwater basket weaving major, and ancient Greek philosophy PHDs, butter my bread bitches...lol
In all seriousness though, stop sending your kids to art school. Timmy is never going to be a movie star, director, artist, or whatever the fuck it is he's going after. Tell him to be an engineer and shut the fuck up.
Soon, they will be selling student loan debt to the public on late-night-TV as grade A investments.
Well, they are pushing credit harder than they ever have. They KNOW that people have no money to spend, they don't want to allow markets, (and prices) to reach their proper, lower level, so all they can do is try and convince people to keep going for those loans, keep up the spending, prop up the asset prices so those at the top don't have to take any inconvenient losses.
This isn't about helping your kid get an education. It's to help the owners of the colleges from having to take a hit from having to lower tuition rates.It's to 'free up' some of that consumer money in the kids pockets...if THEY take out the loans, they can't spend money on new I-Phones. But their PARENTS, who don't buy I-Phones every 6 months can take the loans, and the 'hits'. So before you sign on the dotted line, remember that. If consigning yourself to debt-serfdom for life in order to preserve the wealth of people who will NEVER share any of it with you is your goal, then go for it!
But if sending junior to college so he can get a good job was the goal, then rip that fucking loan application up and get the hell outta there! Because THAT isn't HAPPENING, folks! Tell junior to take a couple of years off school, and just go out and live a bit, THEN decide what he wants to do. By that time, the whole loan debacle will have almost certainly collapsed, and they can take advantage of the new, lower rates that colleges will be desperately offering...
They will not stop until everyone is hanging by the government teet!
They will not stop until everyone is hanging by the government teet!