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Meet "Rolling Jubilee" - The Group Buying & Tearing-Up Student Loans
An offshoot of 'Occupy Wall Street' is taking the $1.2 trillion student loan bubble, debt servitude dilemma of America's youth into its own hands... bit by tiny bit. As The BBC reports, activist group 'Rolling Jubilee' wants to "liberate debtors" by buying student-debt-bundled ABS on the secondary market (where they trade at significant discounts) and writing off the underlying loans. As Rolling Jubilee notes, "your debts are on sale... just not on sale to you," until now.
Rolling Jubilee says the problem lies deep within the structure of the education system and the way that selling education as a commodity reinforces inequality.
"It is documented that they end up worse off and have no better chance of getting work than if they simply finished high school," she says.
This week, the Federal Reserve chief Janet Yellen warned the quadrupling of the student loan debt since 2004 represented a barrier to social mobility.
John Aspray, national field director at the United States Student Association (USSA), said recent changes in law mean people in medical or gambling debt can declare themselves bankrupt - but to do so for student debt means satisfying an '"undue hardship" criteria, which is very difficult to prove.
"Opportunities for renegotiating are very well hidden," he says.
He says Rolling Jubilee's work was "important and symbolic" as a lot of people "don't even consider" getting rid of their debt.
As 85% of student loans are guaranteed by the national government the USSA is putting pressure on the department to "cut contracts with the worse corporations", says Mr Aspray.
"Political reforms are needed," he says. "We are going to see people continuing to rebel against this."
An activist group in the United States has been carrying out deeds that some might think the stuff of dreams - buying and cancelling other people's student debts.
Rolling Jubilee has purchased and abolished $3.8m (£2.35m) of debt owed by 2,700 students, paying just over $100,000 (£62,000), or as it says, "pennies on the dollar".
The campaign group, which wants to "liberate debtors", says it takes its name from the tradition in many religions of marking a "jubilee" celebration by freeing people from debt.
...
Debts can be bought and sold in the financial marketplace. But student debt, which has spiralled to an estimated $1.2 trillion (£619bn), is not usually as available to buy as other debts, such as unpaid medical bills.
In this speculative secondary market, third parties buy debt for a fraction of its original cost and try to collect the full amount from debtors.
But these debt campaigners are buying debts and then writing them off.
Laura Hanna at Rolling Jubilee says the student debt situation amounts to a "bubble".
The group pulled off the deal to illustrate how cheaply the money owed can be sold on the secondary debt market, she says.
"We wanted to question the morality around repayment," she says.
"Your debts are on sale. They are just not on sale to you."
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While student debt isn't handled by shadow banks yet, it has characteristics earily similiar such as a lack of bankable collateral.
"The $75 trillion shadow hanging over the world"
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/11198457...
So, the entitlement generation is getting yet another entitlement. Classic.
These Rolling Jubilee idiots aren't doing the country any favors. Just a few spoiled kids.
Maybe that snarky barista can get her loans forgiven now. Good for her/him/it.
LOL
Sure, make sure da bankers get paid!!
Help out a moron to make a tick Bankster whole!!
Holy Shit who comes up with this shit!!!
I hope I get asked for a donation-- I'll spit in their face!
What lesson is here for we? That we rack up as much debt as we like in decadent west? That someone else always comes to we rescue to bail we out?
Ummm, if that's the lesson YOU are getting, then good luck to you.
Seriously, if the West told you to go jump in the lake, would you do it?
No. The lesson is NOT to rack up debt. Try again.
Dem dam kidz be comin up wit dem smart idears to thumb dere noses at deh sistem. well i say GAWDDAMNIT GIT OFF MEH LAWN!! DEH ONLY WAY TO git bac at dem bankerz is buy gold from dem and then watch it plummit in valu!! Don't YEA thick HEADED kidz git it??
Go put your burka back on lest your muzzie master beats you.
Ya gotta love this country!
Borrow as much as you can for a student loan ... then walk away.
Buy as Big a house as you can ... then walk away.
Max out your credit cards ... then walk away.
No wonder foreigners are floating their boats across the seas, walking across Chihauhau deserts, risking life an dlimb to get here.
No accountability -- no regrets; wear your "No Fear" t-shirt like a proud FSA leader !
It's one heck of a Deal when you become a member of the FSA!
[PS: Don't forget NOT to pay for thet t-shirt either]
Gotta love the seuritization of debt, falsely market a dream, create multi tranche SPV's, over collateralize the offering, certificate th SPV Trust, get that Underwriter to pump the shit out of this load, then get "investors" to purchase "bonds" to find this crap. Unfortunately their security isn't perfected, and when there's a defaut its a legally viable challenge to say, who the f are you to collect, I borrowed from someone else, long ago divested, so how is it that you have current contractual privity with me?
But I guess that's okay, its always the borrowers fault...right?
I understand your feelings, but the "Get off my lawn!" strategy really isn't working...how 'bout we try something else?
There is a difference here. It's not being done with my money. I support this! :)
Seriously, where's the donate button?
"There is a difference here. It's not being done with my money. I support this! :)"
But maybe it is our money.
When the debt is sold at 2.6 cents on the dollar does the federal government make someone whole with taxpayer $$?
"...The “guarantee” means that the government will reimburse your lender if you default, and can then go after you to collect on the loan."
If they would just get STEM degrees they might have a chance.
But these truds and fcukheads want degrees in "social justice" and "art".
Dumb. No sympathy here for them.
Speaking of entitlement and bailouts it's called CARP. Corinthian asset relief program.
Let me get this straight... A group of people are "buying student-debt-bundled ABS on the secondary market'. They are paying a discount, but someone's money is being spent.
Now, tell me... how is getting together into a group, raising money, and then GIVING IT TO THE COCKSUCKERS WHO HAVE STOLEN FROM US FOR YEARS any kind of "protest".
Seriously, we'll show those scamming banker/loan sharks... we'll PAY THEM BACK (but it is a win for us because you see, we won't pay it all back hahahahaha).
STOP PAYING. STOP PURCHASING. STOP PARTICIPATING. For fuck's sake this is complete insanity.
Here's a better solution:
Step 1: Obtain credit card or personal loan.
Step 2: Payoff student loan with non-secured credit.
Step 3: Default on non-secured credit.
Step 4: Profit!!!
Better... if you want to give some kind of credibility to our current system and/or you still value dollars.
On the other hand, I want the whole shit show to end, so I wouldn't try to profit with their scams.
Exactly. If these kids really are educated, you'd think they would have come up with schemes like this.
Get a damn personal loan to pay off the student loan, then default.
What the HELL ever happened to "Where there's a will, there's a way?"
Emigrate to another country. Renounce citizenship and watch the fuckers try to collect.
Liberia?
Liberia for Liberals!
Sincere question: Is it possible to get a loan or credit card of sufficient value to pay off signigificant student loan debt, while you're carrying said debt? When I had student loan debt it was nowhere near today's levels, and I never tried to get or use any other sort of credit at that time. You didn't have to have a credit card to do nearly the number of things you need one to do now, and in general I had a fear of owing or losing money I didn't have.
So could one actually do as you suggest?
I had $20k in student loan debt and was given a $20k limit on a Chase card while I was still in college.
Too bad I didn't think of defaulting.
Here's a better solution:
Step 1: Obtain credit card or personal loan.
Step 2: Payoff student loan with non-secured credit.
Step 3: Default on non-secured credit.
Step 4: Profit!!!
I know you probably mean well, but this is fraudulent. The credit card company would sue and get a judgment, then garnish wages. A bankruptcy judge could consider it non-dischargeable (they do look for fraud).
I know ZH always wants to stick it to "the man," but I wouldn't encourage someone to make a bad situation worse.
get 2 people together. have one open an online merchant account via google/paypal/whatever with "things" to "buy" online, technically this is taxable, but you can get away with claiming it's "at cost" although nothing will be changing hands. make a few minimum payments then default. Once the cards have been wiped out, you get the cash and pay off the student loans after negotiating them down. doing it on your own is a bit tricky, doing it with more than one person involved however... more difficult to prove anything. End result: debt free, and having gone through a BK, the card offers will come flying back in again anyways.
So, now you've graduated, have no debt and once again, cards with high limits... discover there's no jobs though... shit. So, take your cards, do it again, and then just fucking get up and leave the country with your pile of free cash to start a new life somewhere else. Absolutely nothing to stop you from doing this, so why not?
Yeah, get two people. Then you've got fraud and conspiracy to commit fraud. Great idea.
Check relationship to 2008 Financial Crisis.
If You work for TBTF you can disburse responsibility. But as s 2 man show you are culpable.
How do you or we get Justices that feel outrage about 9-11 to take the venue or lawsuit in their court?
FBI, DOJ, Eric Holder, Robert Mueller, Lanny Breuer, FTC, all are culpable in US Courts:
Impeachment is for pussies...
- Presumably there are some Justices that feel outrage at 9-11
- Presumably there are justices that want justice and face voters to keep their jobs
18 U.S. Code Chapter 115 - TREASON, SEDITION, AND SUBVERSIVE ACTIVITIES
§2381. Treason
§2382. Misprision of treason
§2383. Rebellion or insurrection
§2384. Seditious conspiracy
§2385. Advocating overthrow of Government
§2386. Registration of certain organizations
Where is the fraud?
This is absolutely NOT legal advice, but if you use a credit card to pay for a student loan with the intent to default on the credit card or file for bankruptcy protection on said card, it's fraudulent under most bankruptcy rules. I mean, creditors DO get a say in bankruptcy proceedings. They look for this stuff.
Jeez, 99% of people on ZH have NO idea what they are talking about. Please don't take financial advice from them.
I'm all for not participating. But the idea of debtors being treated as a large group, rather than as individuals, is very appealing too. This also sends a message to the system. If this stunt (and that's what it basically is) could inspire someone to take the idea a bit further and press for the right for debtors, say, students, to be treated as a group, rather than letting the system pick them off one by one, it would change the dynamics. It's like the saying that if you owe the bank 1,000 dollars, you have a problem. But if you owe them 10 million dollars, THEY have a problem. If all those loans could act as one, it would have some serious bargaining power.
Why shouldn't 100,000 students have the right to agree to unite and have their combined loans given the same standing as any other large customer would get? They'd still be paying, but on the same terms that creditors are getting on THEIR loans. It would level the playing field between students who want to pay, but are being bled dry, and the banks who use their size to squeeze more and more out of students AND taxpayers!
The door is already shut.
Right, this is not about "sticking it to the banks" since the govt guarantees those loans. They're gonna get paid. The only thing this Rolling Jubilee does is get the secondary collector off the students' backs. And if these are in fact bought for pennies, sure why not do a Kickstart campaign (essentially) to just get that debt retired and get on with life?
If you want a more perfect world with responsible student borrowers (and lenders) then I think you have to remove govt gurantees on loans unless they are carrying a minimum GPA and course load, funds can only be used for books, tuition or campus dorm, etc.
Wow...thanks, bitchez!!!
While I am all paid off (on my own and after quite a few years, I might add), at least these guys are taking some of that burden off the rest of those of us who pay taxes and would eventually have to pay for all this shit one way or another. I'm thinking that the Fed-Scum ain't gonna like this shit one bit though.
They wanted those kids massively in debt to them so that they could coerce them into government servitude and a life of Dem votes. This takes these kids off the hook to be free of the Fed slavery.
Whoever this group is, I'm thinking they may have nail guns in their futures or at least a serious IRS anal probe on the way.
Wow have you got it wrong. They promised to pay when they borrowed the money. I payed off my student loans. Why should any one get a free ride. These worthless students will always vote democrat because the FSA always votes D for more freebies. If you don't think they don't have a political agenda behind this you are wrong. The Fed scum won't care at all because people who don't pay their debts will always acrue more debt. Debt slaves or freebie slaves are one and the same.
hey, I'm not saying it's a good thing if any of these little fuckers are deadbeats. But let's face it...they've been horribly prepared for this fucked up world. And the damage has been done to them on purpose by some seriously fucked up scumbags. A massive disservice has been done to the vast majority of kids who eventually have "graduated" (cough cough) from high screwelz over the last 20 years or more.
But what are these turds gonna do once they drop out of college or eventually graduate with that esteemed Lib-Tard Arts degree, ay?
Go work at McDonald's and then go on strike demanding they get paid 25 bucks an hour for it???
This has become another government-sponsored mess (on purpose I might add), to fuck kids over from grade 1 all the way through the entire system. For one that's gotta stop.
Hey, let this group pay that shit off...doesn't hurt the rest of us at all. And as I said, it fucks the Fed-Scum out of hundreds of thousands of slaves. I say that's good. Then those kids need to be taught what just happened to them, how it happened and why it happened so that they learn what an evil system this has become and hopefully don't let others fall into the same trap. Maybe they'll keep their kids out of the system or a younger brother or sister, cousin, etc.
And another thing...the vast majority of these kids don't even need to be going to college in the first place. Not just because they're almost all seriously unqualified for it, but because for the most part it's just unnecessary anymore.
If they're intelligent and got through our worthless system with a good education or were home schooled so that they're even more intelligent than the competition and want to go to college for medicine, law, engineering, etc. Then yeah...they should go. They probabaly have a good future ahead of them.
But I don't know...how many? Say....75% of the rest have no business or reason what-so-ever to be going to college. They're there to party and then drop out massively in debt. They can learn all the bullshit Lib-Tard Arts type crap on the fucking interwebs all day long if they want to.
I always hated the fact that these colleges forced us to spend our money on their bullshit Lib-Tard classes even though they had nothing to do with our major and we all hated it. At least we all did in my day which was the early to mid 90's, so not that long ago. We hated that shit that they forced on us. Buying 90 dollar books that were totally worthless to read and even more worthless to sell back after the term was over with.
It's all a fucking scam so that a whole lot of serious douchebags can be "professors" in college and "teach" their Lib-Tard bullshit to a bunch of unwilling students who could care less about all that shit.
Wipe the fucking system out. Just like everything else...once government gets involved it becomes as massive boondogle, costing the country Billions and Trillions, and corrupts the entire process from bottom to top with no accountability. And when it all fails the Fed-Scum can only say that it's because they need more fucking money from the tax payers.
Fuck that shit. So let these people do this and let's just see how it turns out. Simultaneously they should also contract every student that they bail out to go into their old high schools to tell those kids what a scam it is and not to get caught in it.
Then they'd be getting their money's worth. Turn these kids into advocates for crushing this system once they get bailed out. Sounds like a good idear to me!
And as I said...I paid my shit off too, like you did. Big deal...it wasn't quick and easy and it took me a while. But I have a good job, so whatever. A lot of these kids have been taken advantage of for so long and abused by this system that they never had a chance from the very beginning in elementary school. They're a different era. It just needs to be stopped.
And now that these kids are seeing that all that debt ended up being for nothing because the government has screwed over the entire nation, destroyed jobs, destroyed the free market, destroyed education, destroyed our Constitutional rights, destroyed pretty much everything else...well, hopefully they'll wake up, grow up, and come over to the good side and stop being dipshits for once in their lives. ;-)
We can only "hope". haha
Yeah, these kids, these kids...But really, are they so different from us? Did the apple fall all THAT far from the tree?
Sure, they're in up to their necks in student loans. But WE are in up to our necks in home equity and credit card debt, so seriously folks, what's the fucking difference at the end of the day?
Get off your high horses and give the kids a fucking break already.
well, I don't have kids...but I still think I have a pretty decent perspective on this shit. Are they differeent from us...I do think so, but I can't be totally sure on that.
I remember 9/11-2011...and that's now 13 years ago. The kids from that time...a little before it, and those born afer it up until now have no fucking clue what's really going on. They really don't. It was all a big fraud..
And most of us at that time and since then as adults (who are now awake), didn't have a clue about what really happened.
I graduated a couple years ago without debt and paid my own tuition. How? Simple... I worked a shitty part time job for a few years before and during university and worked full time over the summer. Most of these kids either don't want to work or spend all their money on booze, a car, etc. They do not deserve my pity.
You can always bring out the determinism argument that nobody is responsible for anything because we are all the product of our genetics + our environment, etc, etc. However, it's a mistake to use that argument to try to justify social aid or any sort of equality -- it's a non sequitur.
Whatever...you either fix the problem, or you don't. Period. Do you think the economy gives a rat's ass about your notions of moral hazard?
But by all means, go ahead. Keep insisting on the full pound of flesh. You'll feel better as the entire fucking Ponzi comes down on your head as well.
Fucking wake up the lot of ya.
Everyone here seems to be missing the bigger picture:
700k paid off 18M worth of loans!!!
Gimme the details. How can I get in on that?
Oh, I'm too mercenary? No such thing as a free lunch?
No, plenty of banksters are getting plenty of free lunches right now. We're expected to be good little capitalists while the guys on the other side of the trade steal everything we've got.
Because it's all bundled together, it's shit that's been deemed risky as all fuck cus it's basically already defaulted and the creditor just wants to get it off the books. so they are sold in a bundle, normally to a third party who is gambling on being able to collect on some of it. in this case though, they just forgive it all instead. you can't pick out specific accounts though, it's pretty random.
What??? You mean there's still a fucking 'catch'?
;)
Get the taxpayer out and see what happens.
I have a credit card that they can pay off for me. And a mortgage.
Michael Lewis The Big Short ( Inside The Doomsday Machine ).
I can't remember how far into the book, but some company did make ($70M if I remember rightly) by selling CDSs and paying off the underlying home loans.
We don't know how to do it but someone does.
Please liberate me!
My acct. no. Is microphone check1212
421136433
3.7 cents on the dollar, not bad.
Of course, I think the IRS will probably expect about 15-20 cents on the dollar of the forgiven debt to be sent back in taxes. Out of the frying pan, as they say...
Haha, here's how the IRS has screwed itself in that regard -
you have to be a financial institution to issue a 1099-C, the only way the IRS can make you pay taxes on forgiven debt. This group is not a financial institution, so the debt is simply extinguished and the Feds lose. Hahaha.
Not a tax accountant, but does the fact a 1099-C not get filed actually eliminate the tax obligation, or simply enable successful tax evasion?
That'd be quite a bomb waiting to detonate during an audit.
Even paying taxes on forgiven debt, is a lot cheaper than paying the whole thing back!
But if someone buys it at three cents on the dollar and forgives it, I'm thinking it's the BUYER who can write stuff off and take 100% of the tax consequences. At most, the original borrower should only pay taxes on the three percent forgiven.
Maybe.
Unfortunately that's not how that works. If you are forgiven, say, 25k in student loan debt, the IRS expects taxes to be paid as though you had recieved 25k in income. Bullshit, but that's how this country operates.
This is my understanding of things as well. I've heard of more than a few people that were hit with massive tax bills on short sales because of it.
Wrong. It is actually quite simple to avoid the tax on forgiven debt. The trick is to be "insolvent" for the year in question. Just a simple form. If the "kids" have no assets and a Barrista job- no problem.
True, when a debt is written off they send you a 1099c for misc income. On the back of the 1099 it says if you are insolvent you do not have to pay taxes on it. Same with ccard and foreclosure debt. The IRS has an insolvency exemption and most people that can not pay their bills are insolvent.
http://www.irs.gov/pub/irs-pdf/p4681.pdf Here is some more info for those interested.
Cliff, what if you're not exactly 'insolvent' but you're only 'aerostable'?
selling education as a commodity reinforces inequality.
Does selling housing as a commodity not reinforces inequality? What a fuck is this for an argument?
Education can be a force multiplier, housing is a luxury beyond the very basics.
When I can escape my house/gambling debt but not my student debt thru backruptcy........maybe.
Education is not a physical object, commodities generally are.
Interesting that. They can repossess a house, a car, even a piece of paper, but they can't repossess experience or knowledge. Errr, I should shut up. Maybe they can "repossess" knowledge. With a baseball bat.
Buy them AR-15's and 10,000 rounds of ammo so that they can create their own "jubilee". The money would go much further.
slavery back
So wait a minute. I have to default on my loans to have someone buy them up to extinguish them? Sigh....
I will buy yours if you buy mine...
I wonder if the IRS will consider the written off loan a "gift" and require taxes be paid by the debtor on the face amount "forgiven"?
They sure WILL if no one does anything about it! That's something a good class action lawsuit could challenge...but there's probably some "law" that says you can't DO that.
These people would tax you on the extra years of life you got after cancer treatment if they could...The question isn't what would they do, but what will YOU put up with?
Only a financial institution can issue a 1099C lol
Dreidel song <>
Facebook to mine, sell user data on political issues to ABC, clickbait distraction site Buzzfeed
http://wtfrly.com/2014/10/31/facebook-mine-sell-user-data-political-issu...
God this is so whacked. Honoring the extinguishing of debt.
Is anyone ever responsibIe for anything anymore?
You kill someone and society protests that you don't get capital punishment. You don't seek work and society gives you an EBT. God Almighty .... we need a reset.
reset coming in 3...2...1...
You even get downvoted on ZH when you talk about responsibility.
Not only should that evil government extinguish all debt, but they should be OUR slaves! /sarc
It looks like a way to make money. You buy the debt then sell it back to those who took it out, minus some fees and operations costs. Then use that money to buy more debt so on and so forth.
It works if you buy the right debt and sell it back at the right price.
"What the Hell is the world coming to?" Sheriff Bufford T Justice
just wait a little longer, ebola will set you free!
Lo and behold. I've been looking for a reason to accept those loans. Q99X2 is rich.
This is great...now what they need to do is go at it in a more organized, systematic manner. Gather enough of these indebted students together to purchase enough loans at the right price, then do a group extinction. The students pay, at a discounted rate, and in return for grouping together get the ability to do what they could never accomplish individually.
If they learn to act as a group in matters of common interest, they find that it increases their leverage. Then THEY can access some of the benefits their creditors take for granted...like the discounts offered to the big players.
They could be more efficient by organizing something like this. As opposed to just scooping up whatever comes on the market, which would statistically tend to make it more likely that you are helping the ones least likely to be trying.
Get enough students together, and demand the right to be treated as a group to deal with their loans. Demand the same settlement offers that any other big player gets.
Bingo. IMHO, this concept is why this post appeared in ZH in the first place.
There seem to be a lot of posters who get so consumed with the idea of anyone actually 'getting out of something they signed up for' -- that they seem to lose sight of the issues on the supply-side with Student loans.
I think that the approx. 4X expansion of the Student debt market in about 10 years was due to mostly to the changes in bankruptcy laws concerning student debt.
Prudence in Student Lending does not exist anymore, because the interests of the lending parties are largely protected by the difficulty in extinguishing student debt via bankruptcy. Why should they be prudent? Go fuckin' nutz -- sell, sell, sell -- and that's what they did.
Think about the knock-on effects of this, such as the way it seriously drives up the price of college.
Ok. So if they are buying the defaulted debt at 3.7 cents on the dollar, why don't they just try to collect at a discounted rate. Let's say 5 cents on the dollar. Surely they could get some people to pay of their debt if it was reduced to 5% of the original amount. Then, they could self-fund. Heck, they might even be able to get non-profit status from the government. That'd be beautiful.
That would be a great business model. Mind if I use it? You could advertise to buy someones debt before they have defaulted and they could pre-negotiate the payoff to you. Poaching customers directly from the banks. Win win.
Price discovery is a good thing.
Rub Debt all over my nipples and fuck me.
When the government became partners of the banks rather than the people, it became a predator.
“Here's the kicker: I can't deny entrance to my school because someone is already too far in debt. If after our coaching and counseling, this applicant fills out another FAFSA and is awarded money by the Department and meets my entrance requirements, it is AGAINST THE LAW for me to deny them entrance.”
-- Charles R Riser Jr (a blogger's response to Tabbi’s article below whose "financial aid department regularly gets applicants that already have tens of thousands of dollars in debt and have jumped from college to college.")
Rolling Stone’s Matt Tabbi wrote August 15, 2013 that “A 2005 Wall Street Journal story by John Hechinger showed that the Department of Education was projecting it would actually make money on students who defaulted on loans, and would collect on average 100 percent of the principal, plus an additional 20 percent in fees and payments.”
Here are excerpts from “Ripping Off Young America: The College-Loan Scandal -
The federal government has made it easier than ever to borrow money for higher education - saddling a generation with crushing debts and inflating a bubble that could bring down the economy” :
Hechinger's reporting would continue over the years to be borne out in official documents. In 2010, for instance, the Obama White House projected the default recovery rate for all forms of federal Stafford loans (one of the most common federally backed loans for undergraduates and graduates) to be above 122 percent. The most recent White House projection was slightly less aggressive, predicting a recovery rate of between 104 percent and 109 percent for Stafford loans.
But the main question is, how is the idea that the government might make profits on defaulted loans even up for debate? The answer lies in the uniquely blood-draining legal framework in which federal student loans are issued. First of all, a high percentage of student borrowers enter into their loans having no idea that they're signing up for a relationship as unbreakable as herpes. Not only has Congress almost completely stripped students of their right to disgorge their debts through bankruptcy (amazing, when one considers that even gamblers can declare bankruptcy!), it has also restricted the students' ability to refinance loans. Even Truth in Lending Act requirements – which normally require lenders to fully disclose future costs to would-be customers – don't cover certain student loans. That student lenders can escape from such requirements is especially pernicious, given that their pool of borrowers are typically one step removed from being children, but the law goes further than that and tacitly permits lenders to deceive their teenage clients.
Not all student borrowers have access to the same information. A 2008 federal education law forced private lenders to disclose the Annual Percentage Rate (APR) to prospective borrowers; APR is a more complex number that often includes fees and other charges. But lenders of federally backed student loans do not have to make the same disclosures.
"Only a small minority of those who've been to college have been told very simple things, like what their interest rate was," says Collinge. "A lot of straight-up lies have been foisted on students."
Talk to any of the 38 million Americans who have outstanding student-loan debt, and he or she is likely to tell you a story about how a single moment in a financial-aid office at the age of 18 or 19 – an age when most people can barely do a load of laundry without help – ended up ruining his or her life. "I was 19 years old," says 24-year-old Lyndsay Green, a graduate of the University of Alabama, in a typical story. "I didn't understand what was going on, but my mother was there. She had signed, and now it was my turn. So I did." Six years later, she says, "I am nearly $45,000 in debt. . . . If I had known what I was doing, I would never have gone to college."
"Nobody sits down and explains to you what it all means," says 24-year-old Andrew Geliebter, who took out loans to get what he calls "a degree in bullshit"; he entered a public-relations program at Temple University. His loan payments are now 50 percent of his gross income, leaving only about $100 a week for groceries for his family of four….
Bottomless credit equals inflated prices equals more money for colleges and universities, more hidden taxes for the government to collect and, perhaps most important, a bigger and more dangerous debt bomb on the backs of the adult working population….
Many finance-sector analysts see the problem as being founded in ill-considered social engineering, an unrealistic desire to put as many kids into college as possible that mirrors the state's home-ownership goals that many conservatives still believe fueled the mortgage crisis. "These problems are the result of government officials pushing a social good – i.e., broader college attendance" is how libertarian writer Steven Greenhut put it.
Others, however, view the easy money as the massive subsidy for an education industry, which spent between $88 million and $110 million lobbying government in each of the past six years, and historically has spent recklessly no matter who happened to be footing the bill – parents, states, the federal government, young people, whomever….
Once upon a time, when the economy was healthier, it was parents who paid for these excesses. "But eventually those people ran out of money," [Kevin Carey of the nonpartisan New America Foundation] says, "so they had to start borrowing...
Read more: http://www.rollingstone.com/politics/news/ripping-off-young-america-the-college-loan-scandal-20130815#ixzz3HlJctoQj
Dare I say that some important details are lacking?
Taxes?
Is this a form of charitable giving with juicy write-offs?
Does the forgiven debtor get taxed on the amount forgiven as is the case with a credit card debt that has been bought on the secondary market and settled?
So who is selling US govt guaranteed debt at a 97% discount?
Good point. Clearly no one. This would work only on defaulted loans that were paid off by the government long ago.
The residual claim is still owned by the government or more likely some vulture collection agency which paid, maybe a penny on the dollar to try to make some money bottom feeding.
1- Beg for student loan.
2- Have fun partying for several years.
3- Discover General Studies/Philosophy diploma is basically useless.
4- Cry about student loan debt.
5- PROFIT!
This needs to happen with home mortgages too.
I'm a little torn on this, on the one hand being of a former century (1961) you either had to save the money, earn the money or your middle class parents had to front the money for reasonable in state tuituion ($1,200 at U of I Champaign) plus housing er fraternity housing ($1,400) and you maybe needed an extra $30 a week for beer and pizza money. You could earn the money easily over the course of a summer if you were willing to bust your ass (not break your rectum like Barry did for his). These fucking pukes today live in resort style living and think nothing of signing paper for $200k in loans for five years of debauchry at ASU or some similar party school. So my attitude is fuck them, you made a concious choice, live with it.
On the other hand, the debt is non-dischargeable, not able to be treated as a priority debt which would make it more readily payable in a Chapter 13 all thanks to lobbyists. And now you have the fucking paper being sold to some fucking debt collector for 4 cents and they will demand 100%. THE DEBT BUYERS ARE INSIDERS BY THE WAY, YOU EVER TRY BUYING CDO's UNLESS YOU ARE SOMEONE'S BUDDY.
Roll your own debt jubilee and just Quit paying the thieving and criminal bastards.
An American, not US subject.
The forgiven debt amount will be taxed as regular income by the IRS like in a short sale. So if you owe $50,000 and they buy your debt for $1000 you will be taxed on $49,000 as regular income. You better have the money to pay that tax. One way or the other you are still going to owe someone, this time the IRS, some money.
A chosen few attempting to make up for the money conjurers who have repeatedly failed to forgive debts during a shmita year?
Nope, not based on the logo alone
And definitely not based on the date they chose to make their most recent purchase
Why student loans are so popular for all, but the borrower.
The FedRes banksters "print" $1,000 in loan-money. They then loan the $1,000, plus fees, to a student, who pays his school.
That $1,000 gives the student an education, and supplies the education providers with real goods and services--the $1000 is spent.
The student defaults on the loan and the banksters apply more fees, and then pawn the loan off to the DC US. Of course the dollars that the DC US pays the banksters with are also "printed" by the banksters and borrowed by the DC US.
For those keeping track, the banksters have "printed" $1,000 TWICE plus associated fees for the one loan. The banksters still have a real goods and services flow, interest, to themselves based on the loan to the DC US--they are still sitting pretty.
Now the DC US comes after the student looking for repayment and, of course, more fees, etc. The DC US can also now repudiate part of their unfunded liabilities by claiming application of such "benefits" to the defaulted student loan balance--"No tax refund or SS for you."
Now the DC US has the student fully in their control, an additional cash flow source to borrow more against, and a balance sheet offset, as the fee-inflated defaulted student loan is an asset.
The banksters got to consume their initially "printed" $1,000 plus fees and more fees when the DC US picked up the loan. They also STILL have cash flow from the loan, as the DC US borrowed to take possession of the it.
More money and power for the banksters and their DC US puppet, and nothing but despair for the borrower.
An American, not US subject.
BS
I borrowed the money for - tv, car, party, dope, clothes, spring break - now I blame the banks because I can't pay the money back. Fools and idiots.
edit Some working person has to pay for all the free stuff - the Obastards keep ignoring this
Try this with a loan shark and you will find out how long it takes to heal a broken bone
Do you know what it is like having a FICA score below 500? It is punishment enough. The thieves are richer than stink and living like kings. Spare the peasants. This is unprecedented and debt slaves was the goal.
Point taken, but I am curious to know if you think "loan sharking" should be a 'legal' business practices for those that wish to engage in such?
Despair leads to innovation, and availability heuristics, a little creativity, and before you know it a logical way out manifests over despair. Debtors limbo can be overcome with enough thought behind the strategy to overcome it, and sometimes governments get fucked by the blowback in the strategy too. Empiricism rules, believe me. ;)
Notice what is NOT allowed: YOU cannot buy YOUR OWN unpayed debt on the secondary market for 3.7 cents on the dollar and then just put the note in a drawer and do nothing. THIS would be a way to never pay it off or settle it. Any admission to the credit reporting agencies would likely result in generation of a tax lien and the unpayed debt would merely linger in legal limbo...
What about buying the debt for 3.7c/$, posting it as collateral (SLs are A grade non-dischargeable assets) against a ZIRP loan from the Fed and buying a long term interest bearing Gov bond.
nothing for money (and chicks are extra)
remember this is a BIS world, these bundled abs student loans have been verified by the irs as uncollectable, as in fraud, these loans are worthless to the BIS, (fed.), the rolling jubilee is paying to do the irs's paperwork.
When they start executing politicians, they will really raise some money.
Crowd funding for guillotines.
Isn't this program what FED does? Buy worthless paper from the banks and forgettaboutit
It's their reason for living.
Subprime is an industry in and of itself. Students are merely market share
of the subprime industry that will always be guaranteed by government. If government decided to bail on that Ponzi the huge systems of tertiary education in the USA & CANADA would topple and only the privately run schools would survive. Harvard researchers have predicted that half of the US education system will tank in the next decade leaving Ivy League the lion's share of the market because they are funded by hedge funds. Public education is the least productive doller-for-doller area of government investment which means that's where gubberment is going to cut next. Security costs are not productive either, but the government will not cut there. The next fiasco will come from medicine and health care costs just you wait and see.
In the first place, Student Loans are definately Not treated as a comodity, or Engineers and other majors who are highly likely to find good employment within their field are not given an interest rate break compared to fuzzy studies majors -who are less likely to earn gainful enough employment to repay the loan.
Next point; if 85% of student loans are guaranteed by the Federal Govt; then I can only assume that when the loans were written off by the original lender, the taxpayers were either on the hook for 85% of the debt, or paid off the entirety of 85% of those debts. Then along come these brain trusts to snap up the remainder -getting the bank off hook for the marginal %15 by providing a market for that debt.
To ice the cake, they tout their own supposed virtue by saying "look, we paid off the tiny portion of this debt that the taxpayer did not fork over -so the Banks did not take a loss funding some slacker's partying at Auburn while "earning" their MA in Early Sumerian Gender Oppression..."
She says she wants to "question the morality around repayment"
Question all you like, I am all for letting people get bankruptcy protections for Student Loan debt... just so long as the School's Science department gets to reposess your brain after the hearing.
The loans support demand.
The work supplying that demand gets done.
Everybody gets paid.
May as well write off the loan as it is not creating any more demand, its work is done.
god bless rolling jubilee!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
If "education is not a commodty", do these people propose either using force to compel educators to teach or using force to tax the funds out of innocent taxpayers?
Which is it?
.gov has always had a primary interest in controlling the education process. The public schools are laboratories for programming and propaganda. College was actually about learning something useful back when I attended; my degree in chemical engineering cost $50 per semester for 8 semesters. This was at a state university, so funded by the state mostly, but the education was top notch, the professors experts in their fields. Since Obummer got the .gov backed loan programs going full tilt, education costs have gone up at 8 times the average rate of inflation calculated across the broad basket of goods and services that make up the CPI. This has enabled the colleges to hire double or triple the staff of libtard professors who parrot the social memes of the left. Their mission is to condition the sheeple to permanent debt slavery in a socialist distopia run by the financial elite. Save-America nailed it pretty well: 75% (would you believe 90%?) of college students are not college material. Since most of the world's knowledge is now available for (nearly) free over the internet, colleges have priced themselves out of business. During the coming downturn, 75% of the current colleges will close, and the student debt problem will slowly fade, to be replaced by some other debt-forcing scam (it appears that health care has been chosen), as the elite are not going to give up their grip on financialization. They get money for nothing and force the population into slavery to support their lavish lifestyle. The change to bankruptcy rules to make escape from student debt difficult is a rude abuse of the citizenry, as the higher-class thieves have no trouble washing their balance sheets whenever it is convenient. But it is all part of the plan to arbitrage living standards in the global free trade environment: american citizens will soon not be able to afford their lifestyle, and will live more like third world people live: hand to mouth with no assets and all their earnings going for basic necessities, ie, slavery.
Fishhawk
Their mission is to condition the sheeple to permanent debt slavery in a socialist distopia run by the financial elite.
And, unfortunately for the sheeple, "People of privilege will always risk their complete destrcution rather than surrender any material part of their advantage."
--J.K. Galbraith
"(it appears that health care has been chosen)" - brilliant point.
Corner the market and charge what you want. Deep capture in it's finest manifestation.
It's either we have a debt jubilee... or we have gas chambers... or politicians hanging from lamp posts.
Pick your pleasure.
if Israel had followed the practice of debt jublilee faithfully, logic tells you it would have been a society without permanent property.
Consider this scholarly interpretation of Leviticus 25: 9-1, “The Year of Jubilee was meant to be celebrated every 50 years. It included canceling all debts, freeing all slaves, and returning to its original owners all land that had been sold. There is no indication in the Bible that the Year of Jubilee was ever carried out.”
I'm not going to waste my time researching this, but student loans are not guaranteed by the government. The interest is guaranteed while you are in school (or something specific like that).
Next, it's probably fraudulent (on some level) to buy a student loan with the intention of writing it off. If they aren't a financial institution, then they have to be a collection agency (or some legitimate business). I mean, you have to be a "going concern." If you buy up a bunch of debt for pennies on the dollar, then what gives you the ability to "write it off?"
This kind of BS gets everybody riled up on ZH, but I assure you it's probably not legal. Forget ethical or moral....I know 99% of you don't give a shit about that.
federal loans are indeed backed. private loans are NOT backed by anything apart from the inablity to discharge them in bankruptcy. they are still subject to SOL however. stop paying, and remain judgement-proof, and they do, in fact, just go away.
Most of what you said is wrong, so I'm not going to bother to argue.
You are a fuck witted clown
an ignrant twat at best.
When you buy something it belongsx to you and buying debt is just as easy as buying a fucking useless ponzi fucking scan voucher like a T bill whish is a fucking unrepayable debt .
Get it stupid?
Once you own the debt it is yours to do as you please. collect it or write it off.
Fucks with your liberal twat sensibilities does it.
Hard luck cunt, its legal and its moral and the fucking losers are the shit for brains ass holes called the democrats who started it.
BECAUSE you are all so fucking stupid.
Are you replying to me with that filthy, incoherent comment?
Every single thing you wrote in that comment is wrong.
I got news for you...this is nothing new. Debt has been sold on the secondary market for years.
And why would it be fraudulent to buy it, and write it off? YOU bought it, it's now YOURS, to do with as you wish. What law says you must collect? I can assure you that it is NOT illegal to choose NOT to collect on a debt you own.
Now please explain how it is unethical or immoral...(THIS I've got to hear...)
Why don't you explain to everyone how you write something off? Go ahead.
I am not sure how these stupid fuckers think loans actually work, but I will clear it up for them. THEY MAKE THE MONEY OUT OF THIN AIR, AND THEN FORCE YOU TO LABOR TO PAY IT BACK. The whole government backed, non-bankruptcy, student loan program should be challenged in equity for 'not in the interest of the people'.
There is no free lunch-someone, somewhere is paying for these "write-offs" and it will be the taxpayers (who are becoming fewer and fewer.)
Are they not written off as bad debts against taxes?
No free lunch. Finally, someone on ZH who gets it.
http://andreswhy.blogspot.com/2012/12/xmas.html
Else
http://andreswhy.blogspot.com/2013/04/social-collapse-to-below-family-le...