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Next Mega-Bailout On Deck: White House Studying "New Bankruptcy Options" For Student-Loan Borrowers
A quick reminder of what the biggest debt bubble currently facing America's population is.
Why is this a problem? Because as the TBAC revealed a few months back, the default risk from the $1 trillions in student loans is several orders of magnitude above the 9% student loans which the Fed has revealed as currently "in default", as one has to add those 12% of loans in deferment and 11% in forbearance to the entire risk pool. In short: a third of all student loans are likely to end up unrepaid!
And, the punchline: according to the TBAC's worst case scenario of the future of student debt, this gargantuan load will triple over the next decade, to as much as $3.3 trillion by 2024.
This means that up to $1 trillion, and likely more, in household debt will go "bad" over the next decade. The problem: student debt is not dischargeable in a personal bankruptcy.
That is about to change.
It appears that just as the administration is finally figuring out what HFT is, it also decided to take a look at the charts above and has made a decision: the next bailout is about to be unveiled, and it will involve a "streamlined" bankruptcy law allowing students to discharge their student debt.
Moments ago this hit the wires via Dow Jones:
- WHITE HOUSE STUDYING NEW BANKRUPTCY OPTIONS FOR STUDENT-LOAN BORROWERS
- CURRENT U.S. LAW LARGELY PROHIBITS FEDERAL, PRIVATE LOANS FROM BEING DISCHARGED IN BANKRUPTCY
And some more color from Reuters:
President Barack Obama is slated to speak to students at Georgia Tech on Tuesday about how he wants to make the process of repaying student loans easier to understand and manage. Obama will sign a student aid bill of rights and will speak about an assortment of policy tweaks and projects to try to make it easier to help people with student loans pay back their debt.
"It's our responsibility to make sure that the 40 million Americans with student loans are aware of resources to manage their debt, and that we are doing everything we can to be responsive to their needs," said Ted Mitchell, undersecretary of education, on a conference call with reporters.
More than 70 percent of U.S. students who graduate with a bachelor's degree leave with debt, which averages $28,400.
The White House said it will require clearer disclosures from companies to make sure borrowers understand who is servicing their loan and how to set monthly payments and change repayment plans.
"Repayment rates improve when servicers work well and work directly with borrowers, helping them understand the terms of their loans," said Sarah Bloom Raskin, deputy secretary of the Treasury Department, on the conference call.
Obama will direct his Education Department to create a system by July 1, 2016 to better oversee and address complaints from borrowers about lenders, servicers and collection agencies, the White House said.
His administration will also study whether it needs to propose changes to laws or regulations to create stronger consumer protections, the White House said.
Which can only mean one thing: the appointment of a Student Loan Czar is imminent, as it the "discharge" of tens if not hundreds of billions in debt, which would never be repaid in any case.

And since there is no such thing as a free lunch, it will be the US taxpayer who will as usual end up footing the bill. Expect college fees to go vertical once deans and administrators understand that they can charge anything and the taxpayer will end up footing the bill.
* * *
One can read the Fact Seet on the "Student Aid Bill of Rights: Taking Action to Ensure Strong Consumer Protections for Student Loan Borrowers" below:
Higher education continues to be the single most important investment students can make in their own futures. Five years ago this month, President Obama signed student loan reform into law, redirecting tens of billions of dollars in bank subsidies into student aid. His historic investments in college affordability include increasing the maximum Pell Grant by $1,000, creating the American Opportunity Tax Credit worth up to $10,000 over four years of college, and letting borrowers cap their student loan payments at 10 percent of income. He has also promoted innovation and competition to help colleges reduce costs and improve quality and completion, including a First in the World fund. While these investments have helped millions of students afford college, student loans continue to grow.
That is why, today, President Obama will underscore his vision for an affordable, quality education for all Americans in a Student Aid Bill of Rights. As part of this vision, the President will sign a Presidential Memorandum directing the Department of Education and other federal agencies to work across the federal government to do more to help borrowers afford their monthly loan payments including: (1) a state-of-the-art complaint system to ensure quality service and accountability for the Department of Education, its contractors, and colleges, (2) a series of steps to help students responsibly repay their loans including help setting affordable monthly payments, and (3) new steps to analyze student debt trends and recommend legislative and regulatory changes. In addition, the Administration is releasing state by state data that shows the outstanding federal student loan balance and total number of federal student loan borrowers who stand to benefit from these actions.
A Student Aid Bill of Rights
- Every student deserves access to a quality, affordable education at a college that’s cutting costs and increasing learning.
- Every student should be able to access the resources needed to pay for college.
- Every borrower has the right to an affordable repayment plan.
- And every borrower has the right to quality customer service, reliable information, and fair treatment, even if they struggle to repay their loans.
Today’s Actions to Promote Affordable Loan Payments
Americans are increasingly reliant on student loans to help pay for college. Today, more than 70 percent of those earning a bachelor’s degree graduate with debt, which averages $28,400 at public and non-profit colleges. Today’s actions will help borrowers responsibly manage their debt, improve federal student loan servicing, and protect taxpayers’ investments in the student aid program:
Help Borrowers Afford Their Monthly Payments: The President will announce a series of steps to improve customer services and help borrowers repay their direct student loans, which are made with federal capital and administered by the Department of Education through performance-based contracts. High-quality, borrower-focused servicing helps more borrowers successfully repay their federal student loans. Building on the stronger performance incentives put in place last year, the Department will now raise the bar by:
- Requiring enhanced disclosures and stronger consumer protections throughout the repayment process, including when federal student loans are transferred from one servicer to another, when borrowers fall behind in their payments, and when borrowers begin but do not complete applications to change repayment plans. These steps will better protect borrowers from falling behind in their payments and ensure consistency across loan servicers.
- Ensuring that its contractors apply prepayments first to loans with the highest interest rates unless the borrower requests a different allocation.
- Establishing a centralized point of access for all federal student loan borrowers in repayment to access account and payment processing information for all Federal student loan servicing contractors.
- Ensuring fair treatment for struggling and distressed borrowers by raising standards for student loan debt collectors to ensure that they charge borrowers reasonable fees and help them return to good standing; clarifying the rights of Federal student loan borrowers in bankruptcy; working with the Department of Treasury to simplify the process to verify income and keep borrowers enrolled in income-driven repayment plans; and working with the Social Security Administration to ensure that disability insurance recipients who can discharge their student loans are not instead seeing their disability payments garnished to repay defaulted loans.
In addition, new requirements may be appropriate for private and federally guaranteed student loans so that all of the more than 40 million Americans with student loans have additional basic rights and protections. The President is directing his Cabinet and White House advisers, working with the Consumer Financial Protection Bureau, to study whether consumer protections recently applied to mortgages and credit cards, such as notice and grace periods after loans are transferred among lenders and a requirement that lenders confirm balances to allow borrowers to pay off the loan, should also be afforded to student loan borrowers and improve the quality of servicing for all types of student loans. The agencies will develop recommendations for regulatory and legislative changes for all student loan borrowers, including possible changes to the treatment of loans in bankruptcy proceedings and when they were borrowed under fraudulent circumstances.
The full fact sheet here.
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hmmmm - time to a short Sallie Mae?
Oblamo keeps on producing payback for his supporters.
Indirect Gov't funded college education. Only in USSA can the really stupid people get Phd's. For Free. Just fill out a form and present to the local Court House. Ain't life grand.
Collateral Damage Layer #1
x-students will also throw in the towel on credit cards and car loan debt
Collateral Damage Layer #2
now bankrupt x-students won't qualify for a shiny new home mortgage.
LET THE PARTY BEGIN
Layer #3...impact of institutionalizing corporate hiring behaviors via regulatory means, by both educational and affirmative action requirements...i.e. firms getting sued for not specifically hiring unmanageable idiots.
Layer #4...misallocation of capital due to labor pricing distortions, caused by overfinanced/flooded education marketplace
FSA FSA FSA!
average $28,400 BFD, price of a new car.
If I can file bankruptcy and discharge my student loans I'll do it tomorrow.
Taking away the bankruptcy option was predartory capitalism at its worst.
Think I'll be a brain surgeon, maybe 6 years in school, go the whole schmole. Live on campus charge it all.
When I get out, bummer can't find a job. Declare bankruptcy, heh heh, what a country. Leave some other sap paying the bills.
Then maybe I'll be a gynecologist......
Anyone who has done the end around to a labor recruiter to sweeten the pot for the hiring firm (lower the cost) knows that a black market already exists for high-end labor. More laws = more evasion.
I have little love for the sanctimonious leeches (oops) administrators that run a lot of academe, if some tatted blue-haired SJW welches on her 100,000 dollars of loans for her grievance studies degree then I say they had it coming. Hopefully it will make everyone take a better look on what we are spending all that fiat for. (Hey I can dream, can't I?)
this isnt out of kindness by the obama admin. They don't feel sorry for the students they have saddled with debt. Keeping them in school as long as possible was neccessary to keep them from being counted among the unemployed. Now obama is just trying to score cheap political points, since, as we all know, that which can't be repaid, wont be. Since everyone knows these things will never be repaid anyway and obama knows it, might as well make yourself look magnanimous to the little people by forgiving their debt. If the govt will never get that money back anyway, you can either forgive them and look like the party that cares, or bring back debtors prisons for them all. Its not like threatening a 25 year old with social security garnishment in their old age will work, even the braindead among them know that SS will be long gone before they are old enough to collect
The debt needed to be increased. Can't have a cascading default that ruins the dollar. So student loans were given to anyone.
That kicked the can down the road a bit, but now that problem is coming to fruit.
So we need another way to increase the debt to kick the can down the road further.
Same as it ever was. After the tech crash, it was housing, then QE (gov debt), now student loans, next who knows.
It is always about expanding the debt supply so interest can still be paid.
That is why banks will go to great lengths to let you refine the terms, as long as they still have an asset and can make the interest skim.
pods
Fuck scholarships! Everyone gets a full-ride from Obama now! I want my money back goddammit!
ok, i am so smart i am going to be a college grad with a degree.....so i want to borrow (x) and it is going to cost me (x) per month for (x) amount of months.....could u please simplify that for me...cause im smart, but i aint dat smart...
I just applied at University of Pennsylvania Warton School 10 minutes ago where I will hopefully, finally get my doctorate degree in Economics. Just because I'm almost 50 doesn't mean you're allowed to discriminate against me. I might also pick up a new car, some appliances for the house, maybe an in-ground swimming pool while I'm at it.
I just wanted to say thanks to everyone.
i am well over $300k for my kids educations and daughter is finishing masters and headed to law skool. SO as always - WHERE IS MY FUCKING BAILOUT?
Instead of asking the colleges in this country why tuition is going up at many multiples the rate of inflation, Obama's idea is to create more loans, and then more loan forgiveness. How about we just make all the liberal fucks at the colleges teach for FREE!!
To put this student loan bailout into perspective, isn't it very likely that it will be a backdoor way of buying up the bad paper that the banks are holding for these loans that for all intents and purposes won't get paid off in any other way but a bailout? The banks need to mark the bad paper to model soon or there will be issues.
The Big Winners are the school administrators who usually have mega-pensions and very generous health insurance benefits.
Some get over $11 million:
http://dailybail.com/home/make-this-story-go-viral-you-thought-californi...
This is about keeping the lenders afloat. Essentially what a "student loan bankruptcy option backed by the taxpayers" means is that payments on otherwise bad debts will continue to be made. The students who are going to be allowed to take advantage of this aren't ones who have been making payments.
assome jerks in the thread above dont seem to appreciate or acknowledge that the price of college has far outstripped inflation. If it shouldnt cost $100k for a degree, its not unreasonable that some of it be waived
"Waived" does that mean a magic wand alleviates all pain, I got a mortgage that needs to be waived.. I predicted this shit last week.. Before he leaves office the magic exec order waives over student loan debt, have them students voting Demonrat for 200 years..
just like loan oriiginating banks should be forced to own a piece of the loan (like 50%) colleges should be forced to own part of the student debt that should be dischargable by bankruptcy after 5-8 years after graduation.
That way only job majors will remain and a majority of departments like psychology , politicial science and gender studies will die a quick death.
LOL
Pick up a new phone while you are out. Maybe a gold iphone, I hear they are nice and you can finance that thing out 5 years.
"FREE" gubmint shit for EVERYONE!!! This is ALWAYS a workable plan. </s> Just look at Cuba and Russia where everyone but government connected people are dirt poor. The union college teachers get wealthy by having the government take money form hard working tax payers in order to pay for "degrees" in lesbian studies.
The free market needs to rule when it comes to college. Don't loan for degrees that will not earn enough to pay the loans back.
Anyone who didn't see this coming when Dear Leader Obama socialized the student loan system is a complete moron.
Fuck, where do I sign up to study Lesbians?
The FSA is growing exponentially now. Moar and moar people i know simply feel unaccountable for anything they do now, not to mention the soaring number with a chip on thier shoulder.
This, "who gives a sh*t" attitude has trickled down from the top in DC and Wall Street to the average joe. Grab as much as you can grab or borrow with no intent to ever pay back is now so common it's incredible.
Unaccountable? What obligation does an individual have to a system that is inherently fraudulent other than to do what they can to make the system go away? The .1% is the true FSA.
Has anyone ever put any thought into burning all the banks down?
I sure have. If everyone goes out and torches the nearest branch office, they are gone in 1 hour.
has anyone ever put any thought of rolling back the laws that permit banks to do such things? a hint: they are less then twenty years old
pods
You are precisely right.
Now, about answering your “next who knows”
War!
Wondering why?
We will soon be out of can to kick. Shale oil is the canary. Watch out when it starts declining.
Looking forward if students are able to default on their loans - the future market for student loans will simply evaporate, and so will the students - now unable to quailify for a debt driving education.
The elite will still send their kids to university, the common folks won't.
Hmm, so could I major in ballistics and weapon delivery systems, then declare bankruptcy?
these brainwashed government subsidized collectivists are your next master. surly, self assured, soy fed, politically correct and ready to process your paperwork for permission to do ANYTHING.
And what happens to those of us who were responsible enough to pay back our big loans? Um, nothing? That's not fair. Oh well.
i had to look up SJW, social justice warrior. Same as anti-white male, imo.
From the art ...
And since there is no such thing as a free lunch, it will be the US taxpayer who will as usual end up footing the bill. Expect college fees to go vertical once deans and administrators understand that they can charge anything and the taxpayer will end up footing the bill.
If ya think about it, tuition and fees were affordable, unless one had the slowness of mind and was also suitably graced with Daddy's money, to attend a private diploma mill, before the "student" loan ponzi went mach 2 frenetic. Medial services were affordable before health insurers became high risk, exchange listed, investment houses.
But, if one has difficulty in understanding how a pass on the balance due for a diploma mill certificate is gonna fuck everything up, think again ...
Take as example, the so called private "college" known as the "Art Institute". Total outlay in loans to get "princess" or "prince" coddled through this for profit private claimed institution of higher learning can bust out above a 100K easily. Hard to pay back when we consider that AI graduates may harvest a bounty at least 3 points above minimum wage.
In 2012, the DoJ sued and won an 11 Billion Smacker Settlement against the institute. Did any relief make it back to the debtors that fell for that sham? NO.
States and municipalities have sued the shit out of the Art Institute over the last decade, and not one cent of the harvest of settlements has been used to reduced the liability of the suckers who fell for allure of gold at the end of kinder-college.
What does this little dried chunk of snot in an ocean of buggers tell us about SALLY MAE collars financing for profit (cough) college student loans that eventually get sued by something claiming to be the peoples government, and yet, not reduce the liability of the victims falling for this fraud?
It tells us that municipal, state and federal courts are be used as a conduit for bribes - that's all it says.
With all the bucks in "shopped research" grant's are busting the deposit accounts of so called preeminent institutions of higher learning. The research is used to justify sales of chemo therapies that don't do anything except cause more tumors to develop.
Before big-box-pharma auctioned off grant funding to institutional research teams that promised to deliver results and conclusions more beneficial to big pharma marketing divisions, despite the harm caused to patients, medical services were cheaper, and outcomes were better, back in the daze when foundations funded pure research.
It's no wonder our world view has been reduced to a 2.5" x 4" 4GL iBling Queen device. It's no wonder we are hypnotically drawn to Ghost Stories and House Wives of BoobJob Ville. Those are the benefits of an over priced low return for profit diploma mill degree!
Like everything seems to be these daze, private private health care and private diploma mills are just like private prisons - they cost substantially more and deliver substantially less, by orders of magnitude!
... and that's all the fat lady has to say `bout this.
Contract labor directly for hire. It's the only way. And employers like it. Deal directly with them, no headhunter or middle man, plus employers don't have to suffer through hiring available and untrainable fucktards.
If your skilled, you can write your own ticket.
Debt jubilee for everyone, don't waste the bankrupcty court's time. Sue the schools for unjust enrichment to make up the difference. Sieze homes of professors and admins of the universities, sell off assets, use the proceeds to pay permanently unemployed people to get sterilized. I got alot of ideas folks.
US has already become Greece; it just happens to have a reserve currency (for now)...
"Sue the schools for unjust enrichment to make up the difference."
I wish I'd thought of that
Hey peabrain, IF you were smart enough and hardworking and ambitious enough to get into med school, and then get accepted into a neurosurgery residency (brain surgeon to dolts like you), you would have no problem "getting a job" that makes repaying student loans pretty painless. Simpletons like you, however, would probably have a hard time getting an undergraduate degree, let alone having a high enough GPA to get into med school.
But then I would have to work at the DMV forced for life...whoops i mean state run medical facility.
Maybe I could have acheived an engineering degree so I could work for the government making weapons....oh...JOY!!!!
Long Govt employment!
Sooz, Thats what they used to say about Law School.
Coming to a profession near you.....
The legal profession doesn't have anything like the AMA to limit the number of doctors that can be educated, keeping the supply low and unemployment virtually nonexistant.
Used to be true. However, with the open border policy we now have take a look at your local hospital roster of doctors.
My own medical doc is Indian, my ortho guy also Indian (but different tribe), my dentist is from Chengdu, my allergist is from Israel (he's a very nice Jewish doctor) and my palm reader/faith healer is from Hungry.
sounds like your palm reader/faith healer needs a sammich
WTF? You never heard of the Bar Association? Can you say "barrier to entry"? I knew you could!
nobody is paying any bills, dude.
That's how doctors did it before student loans became undischargeable in bankruptcy. Go to school until you are 30 years old on borrowed money, declare bankruptcy, then become a doctor making $200,000 a year with no debt. What a country!
Debt relief, it spurs the economy, bitches!
But my question, surely the lenders and institutions need to share in this pain? Charging $30,000 for graphic arts diplomas and then actually finding someone who will LEND that money to (just about any) kid(s)?
i agree. no one would lend money to that person, which is exactly why the govt decided to step in. The govt had no business being involved in student loans anyway. Operating a loan business was not in the enumerated powers given to the federal govt by the states, so i say they are all null and void anyway. Just like SS and medicare. IF you think h govt should be doing this, pass a constitutional amendment authorizing it and get it ratified the way its supposed ot be doing, otherwise its not the fed's perview.
indeed, if only it were a 'constitutional amendment', then it would be 'real'.
It makes no sense that tuition is charged at the instution level, rather than the product/degree level. That's like paying general admission to a grocery store or saying $30K for any car on the lot. But it's academia, and student loans are nothing but transfer payments from the gov't to the administration and faculty.
Someone should do a study on when the education "system" stopped being about the students.
Finally someone gets to the point. The Feds have no business doing this. But it is thus a perfect example of unintended consequences and the permareaction of apparatchiks and political fucks to double down. We fucked somethinbg up and it is screwwing up the world? Then we will craft a new way to deal with it and fuck it up more.
We have subsidized loans to people who cannot pay which means taxpayers are on the hook? What we should get out of the loan business? No. We will simply make the loans non-dischargeable. What do you mean that takes us back to Dickens? Wait you mean there will be angry debtors looking for scalps? Ok make it dischargeable again screw it.
Fucking Asshats.
neither is agricultural loans, but, we do those.
Fuck Yeeehawww, I know some dental students w/ $400k+ in student loan debt. I still have 15k 17 yrs later. As soon as it passes then its off to bankupt for me!! Sweet!!
When GW removed the bankruptsy option, he was giving the "Full steam ahead" message to "education profit centers" to maximize profits.
Now they are helping out "education profit centers" by removing the risk and delay of a poor public by a direct bailout, Watch, bankruptsy without bailout will not happen.
Everything is fake. This cannot last.
Borrow money any way you can, pay off the student loans with those borrowings, then file for BK.
Regrettably the days of AMX handing out Platnium Cards with $100k limits to anyone with a pulse are long over.
guess again
ha yep. all the payments so far on out of thin air money is big. once the sucker is debt free he can go back in debt. and the inflation is imported. the greatest ponzi ever. too fucking much.
Unfortunately, Mr. Giuseppe Italiano's bankruptcy process is a little harder on the borrower than other bankruptcy rulings...
"If I can file bankruptcy and discharge my student loans Ill do it tomorrow"
as would most people, which is exactly why theye don't let you. Taking away the bankruptcy option is criminal in my opinion. thats what bankruptcy is supposed to do. But, then people would just go to college, run up 100k in loans, then declare bankruptcy right after graduation before you get a job. In 7 years you can have a clean credit score, and most people aren't trying to buy a house before they turn 30 anyway, so fuck it. all of this is exactly why the govt should not be putting taxpayers money at risk by being involved in this shit to begin with.
Can somebody explain to me where in the above article it talks about really changing bankruptcy on student debt?
Besides the breathless bullshit from Dow Jones
WHITE HOUSE STUDYING NEW BANKRUPTCY OPTIONS FOR STUDENT-LOAN BORROWERS
the only thing I can find is
clarifying the rights of Federal student loan borrowers in bankruptcy
and clarifying doesn't imply changing to me...
But, then people would just go to college, run up 100k in loans, then declare bankruptcy right after graduation before you get a job.
No, if bankruptcy was possible then noone would lend them the money in the first place. Who in their right mind would lend money to someone, with a sub 115 IQ (the vast majority of university students), to allow them to pretend to study something for four years that they should have already learned in high-school?
But, but,...how else is po' porch-monkeys gonna get da big buckz and a deeploma?
Unfortunately, BHO can't do that. Here's the admission.
'That is why, today, President Obama will underscore his vision for an affordable, quality education for all Americans in a Student Aid Bill of Rights. As part of this vision, the President will sign a Presidential Memorandum directing the Department of Education and other federal agencies to work across the federal government to do more to help borrowers afford their monthly loan payments including:(1) a state-of-the-art complaint system to ensure quality service and accountability for the Department of Education, its contractors, and colleges, (2) a series of steps to help students responsibly repay their loans including help setting affordable monthly payments, and (3) new steps to analyze student debt trends and recommend legislative and regulatory changes. In addition, the Administration is releasing state by state data that shows the outstanding federal student loan balance and total number of federal student loan borrowers who stand to benefit from these actions.'
He's just making college educations even more worthless.Obama and "vision" in the same sentence represent a perfect contradiction of terms...
Student loan debt jubilee. Called that mother fucker.
Do anything you have to, as long is it does not impact our business.
Sincerely,
Jaime "Cufflinks" Dimon
They have already granted amnesty for those who defaulted on their mortgages from our current depression. Students will get an instant amnesty because...its for the children. And better still, most people are supposed to pay income taxes on forgiven loans, treating them as real income. Bet that doesn't apply to students either. Besides, they will not default, the terms of their loans will simply be extended to infinity...and beyond. As with Greece, the important thing here is to maintain confidence and we can't have confidence if the folks are going belly up all around us, now can we? All numbers are generated for one purpose and that is to maintain confidence, even to the point of requiring us to believe outright lies...knowingly....for our own good. We used to collect data and develop statistics to inform us, to make us aware of subtle trends that would be important. Now it is simply an propaganda tool, a means of legitimizing lies to direct our perceptions.
Green shoots of recovery for one and ALL!
Actually, a bankruptcy, student loan and credit card default would become a financial statment "enhancement" and probably pre-qualify you for a 110% no credit check loan courtesy of Fannie and Freddie.
In 1995 I finished college in three years AA/AS/BS (Accounting) and about half a MBA. I left owing about $3,500 which was paid off long, long ago. I want my $3,500 back plus the cost of college with interest.
If you can count you are living in the wrong country.
Tell ya what the new strategy is here at the Chubbar household, the daughter is borrowing every cent to go to college and any other post college educational program. She will default upon graduation regardless of any career opportunities and she can stay with me for whatever waiting period is necessary for her to get the debt discharged. Then and only then will she go looking for a job and/or get any on the record financial help from Mr Chubbar. Have a nice day!
"really stupid people get Phd's"
We used to call them Diploma Mills, but now they have "accreditation"
This really a bailout of corporate, cost plus, bankrupt, obsolete "higher" education.
I'm impressed that only 1/3 of student loans are unpaid. I'd make the case that the actual PhD's don't happen as much. I'm sure the colleges would encourage someone to spend 6-8 yrs trying to get their Bachelors, maybe squeaking out on something useless like sociology or general studies (just look for whatever the retarded football players are doing). I wonder if this "higher education" includes technical trades like aircraft, auto mechanic, etc.
Maybe I missed it, but I didn't see anything that said verification of attendance, minimum GPA, and a restriction of costs to only be for tuition & books. Sorry, you should have to pay for your place to stay, get a part time job damnit, I did. Of course I took 6 yrs to get thru my 4 yrs, but debt free.
I will say I do agree in principle to allowing student debt to be discharged in bankruptcy, keeping the above restrictions. This is somewhat what happens in parts of Europe--the schooling is free (or nearly) if you have excellent academics and you're in a needed and wanted subject, i.e. engineering is worth a lot more socially (at least to me) than women's studies, poetry, etc. I'll be an even bigger pain and include matriculation goals being met. If we are paying for you full ride, we do expect you to graduate on time.
Oh how I loath Millennials!!!
Keep in mind they were all told Boomers would be retiring, and there would be plenty of employment opportunities available (you know, like when you were a kid). That hasn't panned out, and only in hindsight is it a clear blunder, because the 'if... when...' statement never materialized in the manner predicted.
Fuck those loser kids, no one forced them to take out loans to go to college. Only an idiot would believe the mainstream narrative. It was fucking obviious over 10 years ago!! NO EXCUSE!
It took me a long time to become as cynical as I currently am. To think I could have become more cynical, faster, with less experience, is naive on YOUR part.
I'm 36 with average intelligence, didn't take me very long to come to these easy conclusions. Once again, not a valid excuse.
You are saying it was obvious Boomers would never retire, back in 2005. I don't think thats the case. 07/08 crisis hadn't even occurred yet, at that point! Sure, some folks saw it coming, but high school grads? You've got to be kidding. What they DID see was that in the previous 20 years, getting a college degree DID provide some form of job security.
Hence taking out a loan was considered prudent, at that moment in time!
Fucking losers.
Both the Boomers and Gen X have left the Millenials with an Economic Trainwreck along with an unrepayable debt
Yes the millenials are fucking losers...because of YOUR INACTION and your WARS.
Fuck the kids? As long as the Ponzi Scheme was benefiting YOU, you did not even pitch a bitch, did you?
Losers??? Look in the fucking mirror. You allow them to be fucked over...because you "love" them, and then you bitch and whine for allowing them to be fucked over?
You did NOTHING, NOT ONE DAMNED ACTION DID YOU UNDERTAKE, to prevent it, did you?
Did you protest the God damned unfounded wars? Oh were you one of the people cheering the emptying of the US Treasury on, so that Haliburton and Raytheon could fatten their Bank Accounts and their Stock Owners could garner profits?
It is funny. I was actually quite vocal against the wars. It was not popular at the time...to be against the wars.
Every single time I watched on a Public TeeVee a Patriot Missile being lofted toward a target in Iraq I used to cheer LOUDLY, "Yeah!!! Right on!!! And there goes 100 more people's RETIREMENT. Yeah!!!"
People would give me the strangest look.
Did it ever occur to you that WARS COST MONEY? You were in your early TWENTIES and needed to have been marching in the streets. But no...NOT YOU.
It is the WARS, STUPID.
Funny that this just arrived in my inbox...
From Greg Hunter...
https://www.youtube.com/watch?v=orOujvNK8bo&feature=em-uploademail
Fuck you as, I was aginst the wars since 2003. Eat a bag of dicks and get ready to be fleeced.
Imagine what would happen if DC mandated early retirement, like they did in the 1930's. There would be homeless boomers under every bridge. This way, at least, the boomers can make the payments on the kids' basement. The oldest boomer is now about 69, so this could go on for a couple more decades.
Speaking of which, time to write some more VHDL code tonight!
I blame the parents.
When can people start being responsible for THIER OWN actions!!! Can this shit society stop blamming everyone but themselves for once!
Agreed, except when fraud and deception enter into the picture.
caveat emptor
"The movement away from free education has been a completely failed experiment. Its been a disaster according to every account. Destroyed the quality of the education, economically, its worse than what came before -- its a failure on all accounts." -- David Graeber
from this video: https://www.youtube.com/watch?v=6pd-gBlKE8c
"Expect college fees to go vertical once deans and administrators understand that they can charge anything and the taxpayer will end up footing the bill"
This is already the case. Look what happened to the cost of tuition/loan principal growth at the time GW made the loans non-dischargable in bankruptcy. Continuation of same, messed up policies that will ultimately screw taxpayers AND students, while the universities make out like bandits.....
Shut up Steve! It's for the children and it always is and always will be.
Exactly, this is an "educational profit center" bailout disquised as a unemployed student bailout. Educational profit centers are the ones getting the benefit.
The student action is just to keep rioting to a minimum and to speed up the loan payback to the corps...
this is bullshit, I paid mine back. fuck these deadbeat mutherfuckers
Since when is democracy fair?
Democracy, where?
Free ! Years of beer, brawls and bawdy women ... all for Free!
i love merika! ... the Free Stuff never ends ....
... now I can go back for my Free 2-years of community college and ... moar beer, moar brawling and lots of bawdy gals!
grab that student loan now so you can get an AAPL watch and impress the gals!
Yes, because we live in this welfare utopia where all our needs are provided for by the government.. </sarc>
What are you even satirizing? The fact that some people once got something paid for by this stupid government? And thats a bad thing because like, free markets, hyperinflation, and work ethic, right?
That viewpoint seems schizophrenic and in light of the last 20 years, completely untenable.
This scheme simply does not work unless the student forfeits the degree upon dischargement of the debt. Too many avenues for fraud and moral hazard otherwise.
Moral Hazard left the building years ago; the only one left inside is its bloated cousin, Blind Greed.
Think of it as part of the educational experience....
Eating at the Trough 101
There are $1trillion in loans which will never be paid back BUT WHAT ABOUT MEEEEEEEE??? ME ME ME ME MEEEEEEE??
Yer taxes get to pay for it, suuucker!
Deadbeats, like those who BTFD see the writing on the wall. Those who live in the past, a world defined by moral principles, are the fools now, the idiots.
Those who would suffer for their principles are the real danger, the only threat to this corruption. So not only are we losing ground every day, we are also, in doing so, pasting a target on our heads. Radicals and extremists, and while we cut off no one's heads or blow anything up, it is our rejection, our denial of their "truths" that set us apart and threatens the "confidence" they MUST have to dominate. You see it in every country as this all unwinds. Capital controls, speech controls, domestic "police" forces that are beginning to overshadow military forces. We are now "sheltering in place" where we dare not step outside the bounds of their new convention. The question is...how big will the resistance be and how strong will be the actions of the state to crush it?
Watching with great interest.
You want to know what the ultimate in "resistance" is? Not playing their game. There is astonishing power in simply saying "no" to tyrants, as long as you actually mean it when you say it.
"The authentic human being is one of us who instinctively knows what he should not do, and, in addition, he will balk at doing it. He will refuse to do it, even if this brings down dread consequences to him and to those whom he loves. This, to me, is the ultimately heroic trait of ordinary people; they say no to the tyrant and they calmly take the consequences of this resistance. Their deeds may be small, and almost always unnoticed, unmarked by history. Their names are not remembered, nor did these authentic humans expect their names to be remembered. I see their authenticity in an odd way: not in their willingness to perform great heroic deeds but in their quiet refusals. In essence, they cannot be compelled to be what they are not."
Excerpt from a speech given by Philip K. Dick in 1978.
There are too much costs with resistance. Look at how much many have "lost" by not BTFD? Corruption wins because it promises short term gains with no look at the future. To not play, to resist, means to remove yourself from the paystream, and that is hard to do...exactly as they planned it. The cost of resisting corruption grows daily. The authentic human is the corrupt human as that is how we have spent most of our existence.
My Lawd, you could be charged with...LOAN AVOIDANCE! I'm calling the Thought Police right now...
Sorry, Seth, but you voluntarily chose to be the FISH in a crooked game of poker. Only the stupid people
don't know that it is permissible, nay, morally imperative to cheat scammers by defaulting on their shylock loans.
If the money was created out of thin air to begin with, what does it matter if it's repaid or not? The only thing repayment actually has any effect on is potential inflation or deflation, if enough people repay their loans that's deflationary, and if enough people default that's inflationary, but either potential action is more than able to be counteracted by issuing more or fewer loans, as the situation warrants.
Let's face it, the only real problem here is that we're talking about debt-based fiat currency that is created as a debt instrument and foisted onto the taxpayers; our money is now nothing more than debt backed by violence. I humbly suggest that we instead have the Treasury issue currency and then spend it into the economy, debt free; if inflation picks up then print and spend less, if deflation kicks in print and spend more, but keep the supply balanced with demand, and back it with the industrial capacity and production of the American nation. Of course, this would also require bringing back some quaint notions like "tariffs" and "borders" and the like, but that's part of what you need if you want to have an actual country.
If we were to do this I think the vast majority of our current problems would soon go away.
The government was the entity that created the Federal Reserve, and its alchemical debt-money, in the first place.
So I don't see how or why it would reverse that decision to implement an Ellen Brown-style Greenbacker system instead.
You said, "...money is now nothing more than debt backed by violence." Take that one step further, and replace "money" with "government," and its the same thing.
Sounds Central Banksterish to me. I like it!!!
Just registered www.studentbk.com for my next million dollar growth business!
More fukn freebies from the fudgepacker. What a shocker.
More fukn freebies from the fudgepacker. What a shocker.
The precursor already happening in my domain.
A student loan collections company has notified New York State it plans to lay off 264 people locally, 172 in Geneseo and 92 in Henrietta.
Coast Professional filed a notice with the State Labor Department that the layoffs would occur within the next several weeks.
As far as a reason for the layoffs is concerned, the company listed the termination of a contract with the U.S. Department of Education.
That department announced last month that it was ending contracts with five private collection agencies that were providing inaccurate information to borrowers, including Coast Professional.
Pioneer Credit Recovery is on that list as well. It has operations in Wyoming County. The Buffalo News reported last month that about 400 jobs could be lost there because of the loss of the contract
NoVa--you are right--It's all about the poor black ignorant non performing students ( aka water buffaloes) taken advantage of by the rich black run, loan generating, non performing black city colleges ( aka diploma mills) in the non employment zones ( aka our poor black cities) run by black socialist politicians (aka house niggers) getting things for nothng (aka free shit army) --
Makes me so happy to have paid for my education. Maybe one day a bail out will apply to me.
I attended collage remotely from my grams basement! And ingratuated with two degrees! One in Counter Cultural Lesbian Studies, other in Artisinal Bread making!
Only 87,000$ in collage debt!!
I come your estate party on big estate, make suckulent bread, you or girlfriend supply the yeast, same day!!
As always, thanks you very much Universiry of Pheenix!!
Artisanal bread-making is a useful branch of naludge, speling -- not so much!
yah - watch them "nationalize" universities whose grads aren't paying down their debt
Why short Sallie? They'll b bailed out and a new
scam will be in place. It's so pathetic it's not even
worth discussing. Potus s Nero without any music talent
Yo, but he can do de hoopz! (and Gowf!)
I say that's fine but you also forfeit the degree assuming you finished school.
What is the punishment here?
The same as in any BK. You forfeit the asset(s) and your credit gets cornholed. What would you prefer? Debtor's prison?
I know, suck the knowledge out of their earholes, the same way it got in, one semester at a time (assuming there's anything in there!) :>D
punishment? look, the situation around US student debt is so extreme, so socially and politically explosive, from a historical perspective, that only radical steps can save the thing
the US used to be the place where you could fail, and try again. The Benign and Big Eared Leader Of The Free World should not study "New Bankrupcy Options", he should put on the table a complete rollback of all this de-humanizing legal idiot-stuff that passed as laws, courtesy of a lobbyism gone mad
just my two cents, on the basis of the opinion that US Undefaultable Student Loans are simply debt serfdom, plain and simple
I agree. Maybe if banking institutions would have to do their due diligence with regard to student loans like other loans then the price of college wouldn't be astronomical now. All this shit has managed to do is greatly distort the cost of an education and prevent the student from shedding the debt when they graduate and can't find a job anywhere but Walmart. Like any asset in a BK, the degree becomes null and void though. That is not negotiable.
"the degree becomes null and void though" yea, I don't think that will happen.
It will either happen or this scheme does not work. Too many avenues for fraud and moral hazard otherwise. 9 out of 10 people would take out a loan and then BK the debt after 6 months of no job in their degree field otherwise. No way that degree can remain valid if the student BKs the debt otherwise the entire student loan system explodes. Shit I would do it myself to get a free degree if the only deterrent was 3 years of bad credit.
First, I don't think this will ever happen. Banks want all of us to be debt serfs. Second, in a hypothetical situation where this actually is implemented, I think the debt would be written off and you would maintain the degree or degrees. Moral Hazzard? Yes. But so is the SEC, Social Security, Medicaid, Federal Reserve, etc. etc. The whole government is a moral hazzard, but it seems to florish.
BK isn't just a slamdunk process. Trust me, if the judge is not convinced of your actual circumstances, he can deny the relief. When I went thru it, you're in a big room, you get to hear everyone plead their case. Trust me, some stories of hardship are a lot worse than others. One guy was trying to explain that the 5 cars in his name were really for his kids. Judge wasn't buying that one...
Anyway, 7 yrs of "time out" isn't such a bad deal either.
Seen the jobs market lately? its already " Null and Void "
So educate me. If all student loans are backed by government (tax payers) and they have already set up things where you are only required to repay based on your income, which as it approaches zero, so do your payments, exactly how does any of this actually become a default and exactly how is it anymore debt serfdom than telling your citizens that they MUST pay a significant share of their income in taxes, if they choose to work, and that they must pay significant taxes on their home or else be put out on the street? It looks to me that student loans are a giveaway.....that will never be collected on and only continue to sustain stupid educational inflation through government backed student loans. We have an incredible debt that has been created with virtually NO approval by me or any other taxpayer, yet WE owe it, and WE will be taxed for an eternity to pay...not the note, but the interest on the note to some coupon clipper somewhere living off of the labors of others through imaginary currency that we are told we cannot live without.
maybe we should put a lein on Kenya---just saying---do they have anything worth grabbing over there??
Oldwood, I'm not sure I can follow you, there: "If all student loans are backed by government (tax payers)..."
if debt it not defaultable, then this gov backing does not exist. de facto, the collateral of undefaultable debt is... the debtor
and this is exactly the point where we were once, in the 18th and 19th, with debt prisons, forced labour, forced emigration to colonies, debt serfdom, etc.
and I'm not arguing "right" or "wrong" or even "fair" here, I'm arguing humanity and the danger of an explosive mix of whole younger generations without any glimmer of hope facing an oppressive system that older generations did not face
read around in the comments. a sizable part of this ZH nihilism originates from US Student Debt. it's political and economic poison
I'll spell it in a different way: humans should not be collateral. if you allow humans to become collateral, you create serfdom, on the way to slavery, where humans are treated like commodities
and this was always the greatest danger of the market, this wonderful and dreadful human invention: it tends, if unrestrained, to commoditize everything, and taken together with this other human invention, banking, which tends, if unrestrained, to collaterize everything, you get the...
Market-Capitalist Path To Serfdom
THE MARKET IS A LIBERAL (classic) HUMAN INVENTION THAT TENDS, IF UNRESTRAINED, TO COMMODITIZE EVERYTHING
BANKING IS A CAPITALISTIC (classic) HUMAN INVENTION THAT TENDS, IF UNRESTRAINED, TO COLLATERIZE EVERYTHING
go to far this path and the very values that made liberal capitalism a boon for humanity become it's poison. TOO MUCH OF A GOOD THING IS A BAD THING (Paracelsus)
Does anyone here really believe the lending institution is going to incur the costs of these bankruptcies?
Really? This is actually just a way to speed up the payment to the loan processing and educational profit centers.
The punishment is u must vote D every election. There
Will b a gov't rep accompanying you to voting booth, a nice bfl.
The concept of forfeiting a degree is nonsense. A college degree is not a tangible capital good such as land, plant, or equipment that can be repossessed. Furthermore, many of the defaults are related to students who never finished anyway, or received degrees which were essentially valueless.
You could prohibit someone from claiming a degree on their resume, but how would you enforce this? All the job applicant would have to do is to include on the resume: "B.A. Podunk U. (student loan difficulties to be resolved)," or better yet, just ignore the issue and wait to be sued, which would never happen because who would sue a bankrupt unemployed guy?
Furthermore, no employer cares about your degree once you have been out of school for a few years. It only has real value when looking for your first job, when you can get recommendations from your professors.
Without a valid degree nowadays, most resumes don't make it beyond the shredder or spam box, as may be the case. It's not the actual knowledge which the degree imparts that is important, as that can never be taken away. Rather, its value is in having that piece of paper because without it, the education is worthless -- much like a passport that can be revoked but citizenship is still retained. You may continue to be a citizen but no longer can travel.
A degree should not be treated any differently than a house or car or other material possession that was bought on credit. Those that don't pay for it do not retain its benefits (however meager.) If someone is hired after failing to disclose their revoked degree, when they are found out the consequences should be as harsh as using falsified documents.
I'm sure the banks will do what creditors always do and swallow the loss.
Companies like SoFi are accerlating the demise of the industry....they attract the low risk/high quality loans out of the portfolio....leaving little cross subsidization.....and accelerating the collapse.
Great for SoFi investors, great for democrats who will be able to execute forgiveness prior to the election....not so good for low risk, play by the rules students who plan on paying their loan back....