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The Government's Message For Heavily Indebted Students: Don't Pay Us Back
Over the course of several years, we’ve chronicled virtually all aspects of America’s $1.3 trillion student loan bubble.
We’ve discussed, for instance, the Treasury’s projections of a $3.3 trillion student debt nightmare by 2025. We’ve also outlined why the official data on delinquencies almost assuredly understates the case. The numbers you see, have been adjusted twice. Instead of taking the number of delinquent borrowers over the number of borrowers in repayment, the official figures instead report the number of delinquent borrowers over total borrowers, even those in deferment and forbearance, which ensures the delinquency ratio will be far lower than it would otherwise be. But that’s not all. Borrowers making no monthly payments due to their enrollment in the government’s Income Based Repayment program are not counted as delinquent because in a society built on debt, a “payment” of $0 counts as a “qualified payment” towards the 300 monthly installments needed for the government to “forgive” the balance of the loan. The delinquency data has effectively been “Liesman’d”.
Moody’s (when they aren’t busy sparking bank runs) has warned that the proliferation of $0 Income Based Repayment plans threatens to plunge billions in student loan-backed ABS into default and based on the following official Department of Education letter that’s sent to students coming off of the 6-month post-graduation grace period, we can see why the ratings agency is concerned because as you can see, the government can’t wait to tell students how they can avoid repaying their debt.
Dear XXX,
Your loan servicer, Great Lakes Educational Loan Services, Inc., has contacted you or will be contacting you soon about your repayment options for your federal student loan. As you consider these options, the U.S. Department of Education wants to remind you that you may qualify for a repayment plan that calculates your monthly payment based on your income.
You will likely qualify for an income-driven repayment plan if your total federal student loan debt exceeds your annual income. Under an income-driven plan, your initial payment could be as low as $0 per month.
When you make payments based on your income, your loans are paid off over a longer period of time than the standard 10-year plan. While this reduces your monthly payment amount, it also increases the total amount you pay over time. But if you work for the government or a not-for-profit employer, you may qualify to have your remaining loan balance forgiven after 10 years of payments under the Public Service Loan Forgiveness Program.
We encourage you to use our repayment estimator to estimate your monthly payments under our income-driven plans and see if you might qualify. Your loan servicer can also help you better understand your repayment options.
Thank you,
U.S. Department of Education
We'll leave you with the open letter we penned to the Class of 2015 earlier this month:
Dear Class of 2015,
Because we recognize your plight, allow us to provide you with a bit of friendly advice as it realtes to your student loans. Once you are uncerimoniously thrown from your dorm into the less-than robust US jobs market, you will likely discover that contrary to what you were told in your economics courses, the US economy is but a shadow of its former self. Because you probably didn't study to become a petroleum engineer, you will likely find your student debt burden to be quite onerous. The key to having it discharged is to make just enough money to stay clear of bankruptcy, but not enough to really survive above the poverty line. This is because it's hard to have student debt discharged in the event you go completely broke. However, if your discretionary income is so small as to render you incapable of making payments, the government will start you on a program whereby a monthly payment of zero dollars counts towards the 300 "payments" you need to make to have your debt forgiven. Toe this line carefully (i.e. don't slip up and start making too much discretionary income) and the entirety of your student debt will be forgiven in 25 short years without your ever having to pay a dime.
You're welcome,
Zero Hedge
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Ta-da. America adopts the Euro-trash perpetual dole system without a shot fired.
Free Beer Pong Bitchez! ~ Only the best of the best qualify for government jobs!
Ur not gettin ready to pull that one out ur arse now er ya?
We are **special** so other people should pay for us for the rest of our lives. Our grade school teachers told us that we are special so it must be true. Now we also know who to vote for in order to be part of the Free Shit Army.
If we could just get the IRS to follow the same policy for all of us...
"Don't Pay Us Back"
"Us"...just who the fuck is "Us" anyway?
Student loans are "backed" by the US government...for thieveing Banks ["Us"].
It has been advocated for 50 years to "cut out the [fat, greedy, fuckface] middle man banks and make the loans "direct" from the Treasury to the student.
The "actual" debt would be about 40% of the current debt when you remove all the bank fees, undue intrest and "penalties".
It may not solve the default problem, but "cutting costs" has to start somehwhere....it should be cutting bank grabs, not disabled, poor, elderly and those Americans who are working toward self-improvement!
This is all I have to say: https://plus.google.com/+GaleInnes/posts/bM5n5kgD3PT
Student Loan Crisis: 18 Facts Both Shocking And Sobering
Sorry if i'm late to this debate, but isn't all that debt an asset, and thus rehypothecated multiple times? Eventually it would have to be written off, and then what? Not the current admin's problem? LOL
The crazy high priced crappy educations are merely notational like the houses in that bubble.
The creditor's well paid PR flaks who aggressively proselytized that without a college education they'd be doomed to poverty are now going to blame this on the students being reckless and irresponsible for taking out the very loans they pitched. The biggest lesson they will learn will be the evil of debt and fraud.
Loans made without a reasonable expectation of them being paid back are predatory. Make enough of them and now you become too big to fail. This debt has been securitzed, financialized and hypothecated etc. with financiers profiting all the way through. You can be sure that there have been plenty of hedges and bets placed on it not being paid back, all of which will likely be bailed out at par. That means it will be QE'd out of thin air to be paid in the future with the money landing in the creditors pocket now.
That's why all this money was looking for people. The students were vehicles for the fraudulent financing. Give money to people who don't have any under the guise of being helpful, then steal it all back later. Then blame them for being reckless and not knowing better while making tons of money, fraudulently.
All the US needs now are more cathedrals, street-cars and mimes, and you're ready to roll.
And more subsidized baby Muslims.
This is no way to live. :(
A pay me not to revolt repayment plan
Sure, no sweat. It's all printed money anyway. Everyone is happy. Cronies in the higher ed industry get their billions and kick back millions to politicians. Politicians get to look magnamimous while receiving the kickbacks. Students get out of their debt. And it costs nothing but a little printer ink. This is clearly the end of history. It's truly an inspiration that we managed to figure out such a brilliant form of civilization, to which the rest of humankind no doubt aspires.
Revolt? This is not 1968. These folks are not going to drop their i-phones to march unless Soros is picking up the bar tab afterwards.
I'm still 15K in the hole, stopped making payments a year ago because of a gut feeling they might bail all these idiots out. 3.3 Trillion...jesus christ.
"I'm still 15K in the hole"
The criminals are the fucking banks. Usery has always had a negative connotation for centuries, until recent America.
Most "first world" countries (Gernmany, France, Switzerland) either provide "free", or subidized higher education, because it is an "investment" in the ability of a country to economically "produce".
Good thing we don't "see" that here, huh!
Your debt should be wiped out and eaten by the Blankenfeins of the world.
I didn't down you, but you probably should continue paying. 15k isn't a lot. I don't see one big bailout happening. More likely leans on earned income. And/or lowered payments with just enough balance reduction that ends up costing 3x more.
except that the rest of the credit industry has far fewer eligible borrower's to fuel consumption/household formation with school credit crowding them out theirs.
since wages will not come to the rescue anytime soon, apparently consumer credit is the only liquidity the system can expect for profits in the consumption arena.
if all of the schooling debts were cancelled, for example, just how much more consumer credit would be made available under current criteria for consumption I wonder.
its just a theory I have, but I wonder if the lobbyist in service to consumer credit issuers have advanced serious proposals regarding the magical status school debt has under the current bankruptcy rules.
debt is slavery. no doubt. but less so when unsecured and eligible for BK Discharge. I'm not advocating that people replace school debt with consumer/household formation debt. but i would be surprised if there wasn't strong opposition to the BK rules that govern school debt along K street.
then again, maybe the lesson to be learned from school debt is that an education cannot be bought. the industry that calls itself "Higher Education" will suffer greatly from this. churning out consumers that can't must not be good for business in the long run. anybody's.
if there is one positive outcome from all of this, colleges shall be knocked off of their pedestals. if kids want to leave home and go party, they should move to places like Ft. Lauderale. hell, they may actually pick up some valuable skills learning how to survive AND have fun at the same time.
and decide to be educated debt free instead of schooled and debt shackled.
Welcome to Grubermerica!
Free college for everyone!
if you pay for an education
you're probably too dumb
to deserve one....
"an education
can not be bought nor sold
it must be earned"
Quote ,some old greek guy
Dear fiat-debtor, please keep paying us something on the fiat-debt that was funded with theft from you. To make it easier for you to keep paying us, and to keep our jets flying, and our asses in Armani, we will let you pay us less each month, but for a longer time--forever.
Sincerely,
Zion's Banksters.
Liberty is a demand. Tyranny is submission..
The only way to "repay" the banksters is with a guillotine.
SO glad I hve paid my taxes in full now for 30+ years. Had to work to support myself before all this student-loan BS...and I worked my way up the ladder from physical-labor to working in an office.
Fucking pisses me off.....
Once Government can print money, it all becomes meaningless
Amen... stop the government from borrowing money, problem solves itself
With no animosity toward you, with just your name and address, I could get you audited. The IRS will then inform you as to how wrong you are about "paid my taxes in full."
My point, you are only "paid in full" to the point that they haven't got around to you yet.
Liberty is a demand. Tyranny is submission..
Sort of like those folks that think that "if they aren't doing any thing wrong, they have nothing to worry about from the gun and badge thugs." That is until they are laying in a pool of their own blood and vomit as their body spasms from the tazer shocks, and distant voices yell, "Put your hands behind your back."
I was going to go with being hit with a baton by 5-guys while being told to "Stop resisting"...
Good points tho sir...good points...
Dont quite a few of these student loan types not fall under this monthly cap?
Great Lakes services my student loan. I got an email from them the other day about this new repayment option. Anyone who qualifies will be paying more interest in the end. Its basically a giveaway to the student loan companies.
Back door bailout is what it will be.
But my 84 month car loan lowered my payment dude!
Dear 2045 Retiree,
We are contacting you, since you took the no student loan payment option, to inform you we are taking the no SS payment option.
-Regards
Uncle Sam
LOL!!!
No need to mention Medicaid, it'll be long gone by then.
Yeah I hate gettin toward retirement and finding I won't be collectin.
Can I get this deal for my mortgage?
For the total price of the new F-35 platform (which is shit) all student loans could be paid off with money left over. Instead, the U.S. will use these trillion dollar planes to bomb "terrorists" that were created and funded with your tax dollars in a never ending phony "war on terror". Fucking madness has gripped this nation. It won't end well.
Fair point, but at the moment we're bashing millenials and enjoying another round of generational ball washing.
"For the total price of the new F-35 platform"
Note the MIC, sell out the country for some crumbs, cocksucking down votes here?
What they don't know and the public as well, is that the "cost" of the F-35 is padded, and fake invoiced to cover the secret space program, DUMBs, and global control.
It's been happening since 1947...which coincidentally was the same time the National Security Act created the National Security Council (which birthed the NSA in '52), the Central Intelligence Organization (CIA) and consolidated the US military into one entity.
What else happened earlier that year...say in New Mexico?
wheels within wheels.
im intrigued by what youre getting at...
I still say the moon is a guard tower.
IF they can ever work out the mind numbing number of bugs and severe problems with these aircraft-maybe by 2020....just think-Trillion dollar fighters that cant get off the ground.
I say Bullshit to the Pentagon budget of $300 Billion-after adding all the off the books, secret, black budget programs-i would say that The Department of War gets by on QUADRILLIONS of Dollars per year;
Hell the Iraq war cost $2.2 Trillion
If this is the deal, then I want a check sent to me for 30 grand for hookers and blow. I ain't ever takin shit from no one and I've paid for everything I own. I want my free money now.
So, it's admitting that they are defaulting ?
How about lowering the rates to say the 10 year T-note...........?
Good idea but you did not take it far enough. Students should demand a negative interest rate for providing an investment opportunity to the creditors. Just reinvest the negative interest to pay down the principal balance over 25 years.
Let me paraphrase Karl Marx: To be a wage slave, you have to provide yourselves with all the maintenance and job training aka education that used to be provided by slave masters in the past. Then you work, eat, sleep and reproduce for your employers for life. Modernity is all about converting human lifetime into labor time. Progress!
Obozo not responsible letter for your joblessness.
Sorry you couldn't find a job.
Would you like to donate $1 to my library?
It's tax deductible.
So, let's see, government policy has led to skyrocketing tuitions and the destruction of the middle class, there's no work for the young and no retirement for the old. So what do you say we just skip repayment and forget the whole thing?
Do I get FREE POT as well?
Just making shit up now. Weeeee
if you make $80k you don't qualify for any of this bullshit... can't even right off the interest when they draft it from your checking account every month... more redistribution... fuck em.
As an undergrad student in college (chemical engineering) at a UC school, the cost of living is the worst part. There needs to be more investment into creating new schools so everyone doesn't have to commute an hour plus to get to school everyday or pay a ridiculous amount for room and board or high apartment costs. Instead we build prisons and F35's, because we need to be scared. $15,000 a year is also quite ridiculous for a public institution. I get zero $ in grants or financial aid even with my parents paying for 2 kids in college with only 1 parent working making $120k. I do have a $5K a year scholarship for academic achievement but it is still difficult to make ends meet while my parents are trying to save for retirement. I do not know why it is affordable to bomb these US made (up) terrorists, but not to give more aid to not destroy the middle class. If we do need scientists, doctors, and engineers so bad, why are those not subsidized more? Those of you who may say that all we want is free stuff, and that we are *special*, that's bs. What I want is my parents not to have to work until they are 85. Part of the problem is that the previous generation recieved more aid per student (adjusted) than this generation. Believe it or not, the last generation was seen as more *special* than this one. http://www.wsj.com/articles/SB10001424127887324549004579068992834736138 "Between 1987 and 2012, in real dollars, government support has declined from $8,497 to $5,906 per student."
good luck... half the assholes on this site are still in their parents basement.
The printers of confetti could give a shit, will just print more and the politicians will cry out for protection for those that took loans. I don't blame those who'll pay nothing, this is what our world has become, the top to the bottom get free shit. Money is worthless, completely and utterly worthless. Our world has turned into one big ponzi scheme where debt is someone else's problem. In killing the middle class, those people who actually produced things, the PTB have also killed any accountability and the idea that debt is meant to be played back. The rich and the poor get money for nothing. It was the middle and lower upper class that was paying for it all. When these people are gone, good luck to the top and the bottom.
and you are supposed to believe it was all a big unfortunate accident.
“We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it”.
– Congressman Louis T. McFadden, Chairman of the Committee on Banking and Currency (Louis T. McFadden was assassinated)
Student loans devolved into a racket to prey upon the poor and most vlunerable.
A "deadbeat" is one who has the ability to pay but chooses not to: most of those in default are not "deadbeats": for most, this economy sucks and real, positive opportunities are few and far between.
This "program"seems like an effort to keep people out of the underground economy, a ploy to get persons to "go along with the progrom". Fuck that noise!!!
If in default, quit complying-- step away, it's a crooked game and you'll keep losing if you keep playing by the house rules. Or, if you can stack your credit-cards or a HELOC, pay of your student loans and default on the rest-- your credit will clear after several years and you won't be a debt-slave for life.
Many of these "schools" are actually pump and dump shams run by organized crime.
20 years ago the feds swooped in and chained the doors shut on an unaccredited tech school in my area. The school was literally run by the mafia and they absconded with millions in student loan money before the default rate exceeeded the maximum limit.
Become a hedge fund manager. Take your schooling debt and repackage it as a financial instrument. Sell it back the the University you graduated from.
Tell them they'll receive 10% returns in the first year. Remind of your intention to IPO. 50,000 shares of free stock should close the deal.
:p
Free Shit Army, aka Goyim Brigade
Generation slave.
Have said it here a thousand times, they have NOOOOOO intentions of paying back any of the debt.
So take your butt down and get your free money.
Why am I paying taxes again?
OK - I'm officially stupid now. How does one make a payment of $0?? Would I get a receipt?
The vast bulk of that money goes directly to the fascist state subcomponent known as The University System. Whatever amount is left over after they take their skim off the top (about 70%) is refunded to the student for rent and food.
Blaming students for the Rich Asshole Fascist State is utter nonsense. Students are trying to get those slave roles known as jobs, and the shills and other dipshits on this site are whining incessantly about someone else getting something for free, as they see it. When private entities print themselves currency, the official State currency becomes meaningless. Taxation is not connected to government expenses.
Too much anti-poor bullshit on this site lately. Someone is trying to turn Zero Hedge into a limited hangout for angry disaffected Republicans. The Deep State does not give up its old Left-Right meme very easily, because they are too stupid to come up with a better one.
I can't afford $0. I demand a negative payment of $-500. Once I get my feet on the ground, then I'll be willing to gradually go up to $0 per month, perhaps after 10 years of negative payments.
I currently make an IBR payment of 0.
Thanks guys :)
It's all fake, so who cares. All the unpaid student loans in existence since the beginning are just a single year of TARP. When the Federal Reserve was partially audited and they showed $14 trillion printed in a single year for JP Morgan and the central banks of Europe, that was 10 times the total student loan debt load.
This incessant whining and crying that some poor people aren't totally homeless yet is bullshit. The problem is the rich dumbfucks who own everything, not their victims.
Dear Gov.us,
Since you did not stipulate which government, I elect to work for country X, located in the Eastern Mediterranean. Feel free to add my debt to any of the Foreign Aid packages for my Uber-country.
Sincerely,
Dual Citizen
I paid my student loan to the pentagon. Check with Rumsfeld he probably knows where it is.
They know these 'graduates' ain't gonna be able to repay shit when their house-o-cards collapses...
Too many of 'em thought that 'student loan' was such a great way to finance their 'education'... Can't blame them if they never knew that college degree is often not worth the paper it's printed on...
POTUS says 'get an education; get a good job'. Bullshit
Don't believe me, just read the comments below...
Why aren't there any jobs?
I'm not picking on the kids, they should get free shit just like the baby boomers get outsized pensions from asshole crooks that made bullshit promises. Pensions aren't an option for most new employees today, so if boomers can cash in on the empty promises made to them, so should the young ones get an easy ride with free 'education' until it all collapses. Then there is the healthcare boomers will exploit because they don't know the cost of anything when it comes to medical care, since they don't have to write a check to pay for it.
Printing money doesn't cost anything anyway. Fuck it, get in line and take yours, the JewSA is already toast.
This program has been around for a while. If you are smart about it....
Move overseas where your FEIE reduces any obligation to $0 per month.
Save up your money and then use a rich friend to "donate" it to a tax-exempt charity/whatever. They get some extra writeoff, which gets split by agreement with you. The "donation" is used to give you a "salary" for a "position" where you are working remotely and is easy to fudge for fulltime verification, minimum wage is best for tax reasons (FICA cannot be escaped easily).
Do it this way and you have a full discharge inside of 10 years which isn't all that horrible considering the loan amounts are now more or less a life-debt.
Reply to Dumgoy:
You wrote, "the baby boomers get outsized pensions from asshole crooks that made bullshit promises."
Excuse me, but your ignorance is showing!
I am a "baby boomer" (born in the early 1950's) and I NEVER had a job which included a pension. That includes jobs in the private sector AND the Federal government. (I made all contributions out of my own pocket into 401k's.)
Except for municipal and state governments, unionized auto workers, AND very high-ranking Federal officials, pensions died out BEFORE the "baby boomers" entered the work force.
How about getting your facts straight?