"Cancel All Student Debt" - The Petitions Begin

Tyler Durden's picture

With global moral hazard having long ago become institutionalized, and codified as "monetary policy", catering almost exclusively to the TBTF entities in the financial sector, we were surprised it took as long as it did for Obama to announce (as he did last week), that the administration is now studying "new bankruptcy options" for student loan borrowers: code word for an across the board student debt moratorium, or forgiveness.

To wit from "Student Aid Bill of Rights: Taking Action to Ensure Strong Consumer Protections for Student Loan Borrowers":

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.

Well, it didn't take long for virtually every leftist group: from the Daily Kos, to Democracy for America, to Campaign for America's Future and many more, to jump on this bandwagon, and demand - you guessed it - that the administration "cancel all student debt."

Sure, why not: leaving aside the very touchy topic of personal responsibility and accountability, in a world in which record debt is merely "replaced" by even more debt, and in which profits are privatized but losses are always socialized with taxpayers and future generations bearing the brunt in the form of a record $18.2 trillion in public debt (and some $7 trillion more if one adds the government-backed GSEs which one should), why not go ahead and "cancel" the debt. And don't bother trying to explain the simple math that debt is never cancelled, as every liability is someone's asset, and that asset holder will demand to be made whole in the form of more debt elsewhere or else, like Hank Paulson in 2008, it will scream mutual assured destruction and threaten to blow up the world unless bailed out.

In short, what all the concerned entities listed above are saying is not "cancel all student debt", which is impossible, but share the burden of the 43.2 million "student debtors" shown in the chart below, with everyone.

After all, "it's only fair."

Finally, since nobody, anywhere is harboring any doubt that any of the record debt the world is burdened with will ever be repaid, and instead will eventually be hyperinflated away even it means paradropping bags of cash, this proposal actually has a good chance of passing (sorry future generations not only in the US but around the globe).

Once it does, and once colleges know they can charge anything for tuition, room and board - because the debt funding it will be socialized and ultimately "forgiven" - prepare for the green line below, already exponential, to go... vertical.

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knukles's picture

God...  Is nobody responsible anymore?

Publicus's picture

If they can print money to give to the super rich, it is only fair for us to print money and give it to the little people.

 

I will take a couple million.

toys for tits's picture

 

 

"Waaaaaaaaaaaaaaaaaaaaaaaaaaaaaaah." - Artie Lange

gmrpeabody's picture

While you're at it..., cancel my mortgage and credit card debt.

And send me another fucking box of cheese...

kaiserhoff's picture

I could use a Freeeee, dental plan.

but I'm not illegal, much less black.

Never mind.

Beam Me Up Scotty's picture

And send me another fucking box of cheese...

We will raise your cheese ration from 30 grams to 20 grams immediately!!

MarketAnarchist's picture

They should only cancel the debt for people who got science, engineering, math, tech, and medical degrees. 

 

Ill be god damned if I pay for some whiny cunt to get a gender studies or 12th century french literature degree.

Stuck on Zero's picture

Obama can sell this idea by claiming it will only cancel student debt for illegal aliens.  You know, part of the amnesty package.

macholatte's picture

 

 

Ill be god damned if I pay for some whiny cunt to get a gender studies or 12th century french literature degree.

 

....... or how about a degree as a Community Organizer? 

NoDebt's picture

"We're on the express elevator to hell, boys."

No good choices left any more.  Just choices.

smithcreek's picture

I'm starting a "I'd like a refund for the student loan I was stupid enough to pay off" petition.  There were a shitload of things I would have rather spent the money on each month (like maybe a nicer car than the shitty Tercel I drove for 10 years), so it's only "fair".

Keyser's picture

Fuck these parasites... Before the government got into the student loan business, people found a way to attend college if they really wanted it bad enough... It's called working for it and not taking a 4 year college holiday on the taxpayer's nickel... Pay your fucking debts like adults and quit your bitching... 

 

AlaricBalth's picture

The bigger picture seems to be getting overlooked. The government does not own all $1.2 trillion of student loan debt. Sallie Mae (SLM), a government created entity, has been selling billions worth of new student loan debt securities every year. The buyers are banks, insurance companies, pension funds and high net worth individuals searching for yield. The publicly traded firm has noted recently there was a whopping 15 times more demand for the highest-risk, highest-return batch than there was supply ever since ZIRP.

The market in securitized loans known as SLABS (Student Loans Asset-Backed Securities) was first created in 1992 by the Sallie Mae. Of the $1.2 trillion in student loan debt, between a quarter and a third is now securitized into SLABS. As with the subprime racket, SLABS are often bundled with other kinds of loans for trading purposes.

In summary, student loan forgiveness will never happen via "jubilee" because someone has to pay. The debtor students may not have to repay their obligations, but the government may do it for them. Therefore making this proposal another bailout for the 1% of another bad asset class they happen to have the misfortune of holding.

Moral hazard indeed!!!

boogerbently's picture

You're right.

Wow, those Dems are good.

AlaricBalth's picture

It's a bailout for the 1% disguised as a populist proposal.
When the government tells you to look left, always look right.

bwh1214's picture

This should be entertaining, the battle lines are drawn here:

http://debtcrash.report/entry/debt-taken-on-by-fools

Muh Raf's picture

Surely the sensible thing is for someone just to lend them the money to pay off the student debt. Can I have a job at the fed now please sir?

0b1knob's picture

Why not have Obama give all the deadbeat welfare EBT parasites free cel phones too?   

Oh wait....

eatthebanksters's picture

And while they are at it they ought to have the TBTF banks give bank the homes to the millions of people who lost them in foreclosure who didn't have liars loans but who lost their jobs because the banks gave out liars loans to people who should have never them.  There were a lot of hard working and honest people who got fucked becasue of the mortgage meltdown.

 

Stuck on Zero's picture

You guys are forgetting all the positives for the economy from the student loan program:

1) Higher tuition fees,

2) Hundreds of thousands of highly-paid new college bureaucrats and administrators,

3) Millions of students indoctrined with statism, global warming, welfare mentality, racism, and state supported everything,

4) New college departments such as rap music appreciation, ebonics, communications, and activism.

5) and lastly, we get to keep our kids at home for a lot longer after they graduate!

COSMOS's picture

Look they gave 1 TRILLION dollars in TARP to bail out about one hundred Hanukkah boys on Wall Street who were in debt because they were over leveraged.  They better give a TRILLION dollars to millions of us goys with fucking student debt.

Automatic Choke's picture

To y'all bitching about forgiving loans to those whose majors you don't approve of (ethnic studies, women's studies, basket weaving, 16th century belgian poetry....):

STFU.  It is none of your business to decide which majors are appropriate.  One of the virtues of college is that it lets the mind roam free.  Who are we to clamp down on that and declare that only science and engineering are appropriate studies.  (caveat:  i'm a physicist.)

HOWEVER.....   a loan is a friggin loan.  pay it back.  if they forgive all the student loans, it is a slap in the face to all those who DID pay off their student loans.  it is a slap in the face to all those who worked their way through college and avoided loans.  and it is a slap in the face to all those who chose not to go to college because they weighed the costs against the alternatives (i.e. a lower paying job starting right away) and opted the other way.   talk about fairness.....sheesh.

 

nmewn's picture

"One of the virtues of college is that it lets the mind roam free."

Yeah, as long as you keep your thoughts and opinions to yourself and in silence.

I guess so ;-)

THX 1178's picture

I have an even better idea- cancel ALL debt. Hyperinflate and Crack-up-boom the currency. Jubilee all around. Not that it is going to be decided by politicians... the Universe has bigger plans than we can yet imagine...

cnmcdee's picture

Will people <stop!> thinking in terms of paying back the loans it is a mathematical impossibility without having more borrowed via re-hypothecation via the federal reserve.

It is a rigged house - or really a sub-prime house.

I look at the debt level of the top three states is equal to the entire national debt of Canada!!

We are going to go into default wether we like it or not.  The real issue should be focusing on forcing the government to get through it properly.  Zerohedge will have some crazy stuff to write about at this system implodes

The other thing is if nations and blocs around the world are financial basket cases causing worlds reserves to flee into the cleanest dirt shirt - the US dollar then it is being upheld by the world economy. These defaults are inevitable - and when they do come we will probably see massive outflows out of the US dollar and well things will get reaaally expensive then - like luxury toilet paper.  Now if someone would invent an ass-squeegee we would be onto something.  Some kind of V shaped thing you just wash off.

Richard Chesler's picture

"it,s a slap in the face to all those"

Tell it to the millions of schmuck aliens who followed the legal immigration process...



waterwitch's picture

Can grade hyperinflation be far behind?

aint no fortunate son's picture

I'm very skeptical of the % of inflation for food - looks REALLY understated, especially with all the package shrinkage going on...

HardAssets's picture

The Perfect Slave System:

- Put a sum and your signature on any piece of paper and it becomes 'money' that all Must accept on penalty of your 'law'.

- Most will seek out your script because they are forced to use it in day to day transactions to survive. So, you control them.

- You can create an even greater dependency on you by enticing them to not only use your script for their needs, but to hunger for new 'wants' that they didn't know they had till exposed to your propaganda. They can 'go in debt' to you to have these new 'needs' now. So, you have even more control over them. Of course, the debt instruments are nothing but the script you create from nothing.

- For the very few who refuse to go further into debt enslavement to you, - you just create 'taxes'. Now they must use your script to buy something from you that they would rather not need - - protection money from your hired goons. Even if they pay off their land, if they don't pay you the annual protection money it will be stolen from them. -

- Even those who think 'they have no debt' are enslaved. You see, they owe a part of 'the national debt' (that's a good one ????). That can be used as an excuse to do any damned thing to them. Also 'national security' is the other great excuse for doing what you want to your slaves.

The best part of this Slave System is that the slaves have been so brainwashed by your 'schools' and media, that they will work and fight like Hell to impose this system on themselves and their fellow slaves. And even if you pointed out how the slave system works, most of them would deny it.
Their tiny little brains can't handle it - makes their head hurt to actually think for themselves.

And, if enough of them start to wake up, you can always thin out the herd & divert their attention by starting a war. Create new 'external enemies'. The slaves always fall for that one.

The Perfect Slave System is a work of genius. . . . Evil genius, but genius none the less. It does rely on magicians illusions to stay intact, however. If the slaves ever really figured it out, the whole thing would collapse within weeks.

WillyGroper's picture

next up...

cash for clunkers sub prime auto loans.

Which is worse - bankers or terrorists's picture

It is not clear to me why people are opposed to this. If you know the entire monetary system is going to collapse anyways, why not, like being the first country off the Gold Standard, be ahead of the game?

Victorio's picture

Astounding how people see fit to bicker over the balance of payments in a fraudulent game. It is not possible to legitimately make payments to an entity if the method of payment is itself a fraud.  A great majority of individuals have suffered dearly from this fraud wethter they realize it or not. A small minority of individuals have made obscene profits from this fraud.  Why should I care if someone who has fallen prey to the fraud has not toed the line.  I care alot more about the inherent fraud in the system, and those that created and maintain it, that has allowed a small minority to deceminate poverty, waste, death, disease, evil.

Yeah lets get all worked up over the symtoms of the disease and pay no attention to the cause.  Genius.

nmewn's picture

+1, thats exactly what it is.

"The debtor students may not have to repay their obligations, but the government may do it for them. Therefore making this proposal another bailout for the 1% of another bad asset class they happen to have the misfortune of holding." 

Greenskeeper_Carl's picture

it would give me a great deal of pleasure to watch them write off these loans, and have the govt refuse to back them. It wouldn't be bailing out students, it would be bailing out banks that bought these garbage assets. All those people bought what they knew to be risky assets since they all thought a bailout would make them whole once the ball started rolling. Sorry, no bailout this time, boys, take your lumps, be more careful next time. Hopefully we would get to see a few of them go bankrupt, and maybe a few more parachute-less skydivers from a JPM building. There is no saving this system anymore. Its too broken, too corupt. If student loan write offs are what finally gets that ball rolling, fuck it, lets get it over with

ChanceIs's picture

Ummmmm....like....Dude..ummmm it sounds to me as if the gubbermint got its loan money back from the 1%.  So..like...why don't we just declare the the student loan debt held by the 1% void and they can have the 25 year olds with the community organizing degrees. You know...just like the Emancipation Proclamation, but in reverse.  But the 1%  would have to support them - no food stamps for the kids with worthless degrees.  Oh. And they wouldn't be allowed to go fight for ISIS.

All kidding aside, I will be one POed cracker if they cancel that debt.  Why not cancel my mortgage?  Why not pay me because I paid my way through college and was never a burden to the state.  Why not claw back the $200K salaries the gender studies faculty has been getting to offset the debt cancellation?  Why not claw back the salaries of the staff at the student loan offices, who probably outnumber the faculty 3:1? 

williambanzai7's picture

And some poor assed crony motherfucker is holding the toxic tranche of those SLABs.

AlaricBalth's picture

And that same crony motherfucker recently wrote checks to donate money to the American Federation of Teachers and the Campaign for America's Future (Soros backed), so these respective 501c3's can continue to lobby for a government bailout of his toxic SLABs.

Handful of Dust's picture

Sounds about right. I don't think 'the gubmint' gives a rat's asss abotu indebted students.

 

Whereas those Big Banks and Lenders on Wall Street holding the debt + keeping the fat flowing to school administrators are their only concern.

Nobody For President's picture

Alaric, you are one of the clearest, most consistently cogent posters on this site. Pleae stay around... 

Greenskeeper_Carl's picture

thats what happens when the govt gets involved. All you have to do to qualify for loans is have a pulse. this is what happens when some moron in govt decides "everyone should attend college". A couple decades ago you could work part time and pay your way though it. I know a few people even 12 years ago when I started school that did that. The problem was you couldn't drink, fuck, party, and do drugs all the time if you were both working a lot and actually going to class and doing homework. The nearly limitless amount of credit extended to these naive young dumbshits takes care of the requirement to work, and the fact the colleges have 'dumbed down' their curriculum to accomodate the influx of people who really have no business in college(and the fact that these schools are mostly just diploma mills now, and have financial incentives to have all of these people stay in school) takes care of the requirement of going to class and studying. Its a vicious cycle than can only end badly.

Oldwood's picture

anything that everybody can have, nobody wants.

Tall Tom's picture

I will take those Obamaphones...and I SCRAP THEM.

 

The homeless sell them to me for...ONE DOLLAR. Then they take that over, next door, to the Liquor Store and buy a 99 cent shot of liquor.

 

I get the Gold and Palladium. The Liquor Store garners a small profit. The homeless drunk gets his booze and his buzz...

 

Who loses? YOU DO.

 

Thanks Obama.

 

Over 150 Cell Phones destroyed and counting. Fuck the NSA. Yes the NSA tracking devices are being destroyed as fast as I can get my hands on them.

 

Government programs to "help the poor"...er...provide subsidies to the Cell Phone Manufacturer that was one of Obama's Political Supporters...on YOUR DIME...are really working out well...for me.

 

Thanks again. Your financial support, your support, is really appreciated. And just to let you know...I DO NOT DRINK.

 

People do not appreciate what they do not pay for.

 

Since YOU are paying for then you must appreciate that your Government is doing this.

 

If YOU do not appreciate this then why in the hell are you paying for this?

 

 

goldsaver's picture

Sure.... right after JP Morgan, BoA, Deustche Bank.....

Will To Live's picture

Cancel my mortgage. Thanks. I just dicked you.

PirateOfBaltimore's picture

Dear downvoters,

 

Hope you die in an underwater basket weaving gender studies bonfire of the hugemanatees.