"May The Bursting Of The Student Loan Bubble Commence!"

Tyler Durden's picture

Authored by Antonius Aquinas via Acting-Man.com,

The Looming Last Gasp of Indoctrination?

The inevitable collapse of the student loan “market” and with it the take-down of many higher educational institutions will be one of the happiest and much needed events to look forward to in the coming months/years.  Whether the student loan bubble bursts on its own or implodes due to a general economic collapse, does not matter as long as higher education is dealt a death blow and can no longer be a conduit of socialist and egalitarian nonsense for the inculcation of young minds.

 

Complain… declare bankruptcy… think for food… occupy… Decisions, decisions. [PT]

 

The perilous condition of the student loan sector can be seen by looking at a few ominous pieces of data:

  • The US has around $1.3 trillion in non-dischargeable loans to students
  • Over 120 billion in student loans are already in default
  • 27% of students are a month behind on their payments*

As economic conditions deteriorate and there are even less meaningful jobs for college graduates than there are now, these numbers will only get worse.

Not only have colleges and universities been havens of leftist thought for many years, but they have become ridiculously expensive and beyond the reach of most middle-class income earners to afford without going into significant debt.

Moreover, the incessant barrage by the Establishment about the necessity of a college degree has distorted the labor market to where worthless, debt-ridden degrees are pursued instead of much needed blue-collar employment.  The readjustment of the labor market to a proper balance will not only take time, but it will be a costly, painful process.

 

Student loans granted by the federal government. The total outstanding is actually around $300 billion more, but the above loans are backstopped by the tax serfs. Note when this bubble took off.  It happened just as the financial crisis triggered by the collapse of the housing bubble started. This is unlikely to be a coincidence – to us it looks like one of several methods that were used to re-inflate the credit bubble. Funny enough, the shorthand for this chart at the Fed’s economic data web site is indeed “TOTALGOV”. You couldn’t make this up. [PT]

 

Marxist Intellectual Wasteland

While the “hard” sciences have not been as affected by the Left, the social sciences have long been an intellectual wasteland devoid of any freedom of thought or opinion.  Promotion and recognition of academic excellence is, more often than not, based on diversity and one’s skin color instead of merit.

Arguably, economic science has been the most corrupted discipline.  Economics departments of major universities are now training grounds for employment in state and federal bureaucracies, the banking industry, and Federal Reserve where Marxism, Keynesianism, neo-Keynesianism or whatever kooky, nonsensical theory of the day can be put into practice.

While higher education has long been hostile to the ideals of Western Civilization, it is now explicitly a bastion of anti-white discrimination and hostility especially against white heterosexual men.  Few days pass these days without an incident, often with the approval of school authorities, blatantly attacking white Americans or symbols that supposedly represent them.

Of course, the higher education apparatchiks have had an easy time in their brainwashing task since the impressionable minds in their charge have been indoctrinated by twelve years of public “schooling.”  Not only has the public school been a mechanism of social engineering, but it has constantly pushed its chattel to continue their “education” at the collegiate level.

 

Protests like the one shown above have increasingly flared up in recent years as the student loan bubble has grown. One may be inclined to sympathize with students to some extent considering that the cost of education has exploded into the blue yonder, but it is not quite that simple. Education is certainly an area of the economy that is highly sensitive to monetary inflation. For one thing, it is not easily “tradable” (although that may actually soon change). For another thing, as a long-range investment in human capital, college education is part of the higher stages of the economy’s capital structure. A long period of time passes from the beginning of a college education to the production of a consumable service by those receiving it. Monetary inflation always steers investment spending toward the higher stages of the production structure, as it tends to push gross market interest rates below the natural interest rate determined by society-wide time preferences. This  distorts relative prices in the economy and artificially boosts the perceived profitability of long-range investments. Many of these investments are unmasked as malinvestments as soon as the monetary pumping stops, and college education is definitely no exception to this rule. However, even at the current high cost of education, students obtaining marketable degrees should be able to cope with their debt load once they enter the job market. Of course, marketable degrees usually involve a lot more work than nonsense like “gender studies” and similar cultural Marxism-type indoctrination masquerading as education. As an aside, students of economics have to keep in mind that the majority of macro-economists would be completely superfluous in a free market economy. Most universities therefore offer economics studies designed to produce central economic planners. To paraphrase Hans-Hermann Hoppe, one will mostly be fed “viciously statist, incomprehensible gibberish”. There are exceptions though, but one has to choose one’s alma mater very carefully if one is genuinely interested in being taught sound economic theory. To come back to the protesters above: if their student debt were to be canceled, their creditors would be forced to bear the losses. The vast majority of said creditors are tax serfs, who have lent them money involuntarily. By contrast, no-one forced these students to borrow money and spend it on obtaining useless degrees. [PT]

 

Strike the Root

The Trump Administration and most on the Right have failed to grasp the socialistic bias of American education.  Education Department Secretary Betsy DeVos has spoken about “competition” via school choice, vouchers, magnet and charter schools to increase school and student performance.

The Administration’s proposed 2018 education budget calls for an increase in federal spending on school choice by $1.4 billion, a $168 million increase for charter schools, and a $1 billion increase for Title I “to encourage school districts to adopt a system of student-based budgeting and open enrollment that enables Federal, State, and local funding to follow a student to the public school of his or her choice.”**

 

A chart illustrating the problem discussed in the lengthy caption above. CPI for education and CPI for all times, indexed (1993 = 100). From a theoretical standpoint, it is no surprise that the cost of education has escalated to such an extent.

 

These shopworn ideas and policies are not only fundamentally flawed and will make matters worse, but they will do nothing to counteract and or end the Left’s domination of education.  Instead, President Trump should do what he spoke of at times on the campaign trail and what President Reagan promised to do, but never did – abolish the Department of Education!

 

A few cartoons on student debt we have come across. Grandpa beats his grandson to the parental basement… and once you find out that there actually was a catch to that Bachelor’s in English for the everyday low price of $78,000, you can always try and epistemologize for your food! :) [PT]

While the collapse of the student loan bubble may be the catalyst for a general financial downturn and will certainly be the cause of tremendous social pain and dislocation, it will, nevertheless, be a necessary prerequisite if America and, for that matter, the Western world is to ever break the grip of leftist ideology which rules it.  May the bursting of the student loan bubble commence!

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Jason T's picture

I demand 18-35 year olds stop going into debt to go to college. 

 

ThirdWorldNut's picture

That'd be a violation of their basic human right. True story.

Jim Sampson's picture

Unless you go STEM don't go to college.

NidStyles's picture

Going STEM doesn't guarantee anything. There are millions of STEM people working outside of their degreed fields, and not working at all...

 

 

Haus-Targaryen's picture

Technical blue-collar where you own your own business is the golden mealticket in the years to come. 

Appleseed's picture

Our shit debt based economy is gonna blow. We're all sold out on golden tickets

Appleseed's picture

Our shit debt based economy is gonna blow. We're all sold out on golden tickets

Déjà view's picture

Whole economy has taken on '$tudent loans' $20 Trillion...it will be discharged upon distant future 'taxplayers'...having not complained...must not give a $hit...

vq1's picture

I bought a used car from a dealership a while ago and the young fellow selling it has a degree in ME. I dont believe its 100% his fault that he cant find adequate employment.

However he also boasted about his brand new, fully-optioned whip. Who knew car salesman did so much better than engineers? Hint: they dont.

Wrenching Away's picture

I have an ME degree as well, from U of MD. To be honest, I struggled with some of the math and chemistry, and graduated with around a 3.1 GPA. I pretty much put myself through school  by working on cars (which was my real love). They never said as much, but I knew that being a mechanic for a living would be considered a dissapointment to my parents, both having professional cubicle careers. It wasn't easy, but I found "adequate employment" after graduation. After a couple years of working at an industrial filtration company, I realized that I hated the job. I wanted to be designing things, testing things to failure, getting my hands dirty. In a conversation about where I was headed in the company, my boss told me "maybe this career just isn't for you, because to honest, its not an exciting job". I realized he was right, and quit soon after.

Now I own my own auto repair business, that while not without its substantial headaches, has made me very comfortable financially. Of course, as fate would have it, my 14 year old son has no interest in cars or ever taking over the business, and can't wait to go to college. Shrug. At least I can afford to send him without taking on loans.

Oh, and by the way, car salesmen can make multiple 6 figures amounts of money in limited circumstances. You have to be at one family owned dealership for a long time, and generate a ton of referral sales. For the younger newbies, it is a completely thankless, piss poor job.

 

cougar_w's picture

Made up facts are made up.

I have a MS degree in Biology, and currently write software for $200K/yr, so do I count as a failure? There are millions of people change their minds about a lot of things, including women who decide to have kids and stay home. But in my direct experience, anyone with a degree in engineering or applied mathematics can get a job around here (SF Bay Area) with starting salary at $100K. Interns make $80K and then get a job in 6 months.

mayhem_korner's picture

A lot of people have degrees in engineering and mathematics...but not all of them are gifted at it.

And $100K in SF is not the same as $100K in 99% of the rest of the US.  Can't live the dream on $100K in 49er freakville.

MalteseFalcon's picture

Colin Kaerpernick got a degree in football and community organizing and now even he can't get a job.

Damn!

vq1's picture

I think its people graduating today with engineering that are having a problem getting their foot in the door.

So many "entry level" job postings require 5+ years experience (hint: h1b)

CNONC's picture

The vast majority of engineering degreed people work as salesmen.  Most of those who are capable of earning the degree are not capable of competently performing engineering tasks. 

Sonny Brakes's picture

I would counter that in order for an engineered solution to a problem you'll need access to all pertinent data. Data is the key to solving problems. Honest data, not the made up data. Plus, you'll need to work as fast as a computer. It wasn't the dog that ate my homework it was the computer. 

Freedom Lover's picture

As a 35-yr veteran in the work force with a Civil Engineering degree and a PE license I call bullshit on your assertions. Maybe if you work for a wall street zombie bank as a 'financial engineer" dreaming up ways to transfer wealth from the productive economy or writing software for the latest video games maybe but if you work in what is left of the productive sector of the economy (i.e. construction,manufacturing) forget it. I finally hit 6-figures at age 53 just in time for the 2008 crash and went back down to about $60-k and several employers until i finally regained what I had lost by 2014. In fact most expierenced management level engineers are lucky to keep a job more than 5-yrs these days. Is it any wonder why Trump got so much support from the working and professional class.

jbwilson24's picture

It is recency bias. I meet a lot of stupid young millennials who have never experienced an economic crash. During the GFC they were not paying the bills. They are too young to know much about the dot com bubble.

 

Just wait until the market cycle goes against them. Yes, you can make 200k in silicon valley right now. You could make more, adjusted for inflation, back in 1999. That market eventually entered a downcycle that lasted for 7 or so years. The curren generation of STEM grads seems to think that this hiring boom in tech is permanent.

 

(You should see the stunned faces of dopey asian STEM students when I try to tell them to study market cycles).

jbwilson24's picture

"Interns make $80K and then get a job in 6 months."

 

What is the success rate at your company for intern conversions? At mine (hint: large internet search company in Silicon Valley) it is about 5% hirebacks. That is better than our general 2% acceptance rate.

Not 'everyone' can get an automatic job in SV. Plus there is tons of competition from the H1Bs.

 

Rockatanski's picture

ya right, because you can be a doctor or chemist or bio-researcher etc without going to college.

how about stop going to college for worthless bachelor degress in business, marketing, english, etc

factorypreset's picture

Actually, English majors have a better chance getting into med school than other majors (even bio or chem) because not only do they have to earn their degree in English, which is no small accomplishment, but they also have to complete the math and hard science prerequisites and pass the MCATS.  

College level English courses are no joke. If you don't believe me - go to your local community college and take a few English courses and see for yourself. 

mayhem_korner's picture

Unless you can do so without going into debt, don't go to college.

Looney's picture

 

I’m tired of waiting for the Bubbles to start bursting! I just ordered a 500-sq.ft. roll of Bubble Wrap.  ;-)

Looney

Haus-Targaryen's picture

Out of all the bubbles to pop in the coming tribulation, none will be more satisfying to watch than the student loan bubble.  

J S Bach's picture

As long as the illegitimate Fed remains in place as the supreme counterfeiter of the World's Currency... all American "bubbles" will continue to burst to no noticeable effect.  When their reign ends is when the shit will hit the fan. tick, tock, tick, tock

mike_king's picture

They should be sold into slavery. They are worthless as responsible adults.

Memedada's picture

They are born into slavery. Like all US plebs (who are not part of the ownership class, the 0,1 % - you know, the ones who have kept you in the dark for your whole life...?).

MonsterSchmuck's picture

And I demand colleges and universities stop funding programs that are useless such as Gender Studies and XYZ Ethnic Studies.
Fire the inordinant amount of grossly overpaid administrators too.

hanekhw's picture

Slaves are always required to build their own quarters and in modern society their schools.

AlexCharting's picture

Need a system were student debt is repaid as percentage of post-graduation monthly income

QQQBall's picture

No, need a system where interest rates reflect borrower ability to pay. WTFU!

mayhem_korner's picture

Well, that would eliminate student loans altogether.

What we really need is a system where money cannot be created from nothing and secured by the "promise" of future income.

 

vq1's picture

Cant they do that if the loans are private? Garnish wages?

Thats the scary thing about the loan crisis. Its not a bunch of people trying to scam the system and get rich.

Its a bunch of people in tons of debt, no job prospects and no assets to seize.

geno-econ's picture

OMB has some recalculating to do before October Debt Ceiling deadline

oandakid718's picture

Fuck it, if I knew that my student debt would be waived in the first place, maybe I would've just went to Columbia instead of John Jay

indygo55's picture

Hey, the banks or lenders whoever they are took the risk with students who are by definition sub-prime borrowers. Oh sure they are co-signed by someone with assets or a paying job and they are non-recourse, but when the stone has no blood, WTF are you gonna do? Obviously the co-signers and non-recourse issue ain't workin like its was supposed to. 

Will they still be lending after the bailout? After they get 10% of the balance due? I don't think so. What will that do to the colleges and universities that charge so much? Hummmmmm I'm thinkin they will freak out when they have 50% or fewer paying students showing up on campus next year. 

Ali Tarpate's picture

> ...I would've just went...

You went to college?

Arrow4Truth's picture

Safe to assume, not an English major.

QQQBall's picture

Those protestors should have tin cups with pencils?  Or signs like "I am an idiot, bail me out!"

blindfaith's picture

 

Bring back the MILITARY DRAFT.  Watch them shut up.

How come they all look over weight?

moorewasthebestbond's picture

Shut up?

 

It would be one of the biggest, loudest circuses of all time if the draft was reinstated!

micksavage2010's picture

y r u channeling john mccain. how bout we draft your twisted corpse first regardless of your obvious signs of brain cancer? if ur old enuff to remember the draft from vietnam, lotz of "draft dodgers" like the donald and the bill and the cheney got "deferments" cuz they had a connection. don't know how bringing back the draft would be of benefit to amerikka. idjit.

gilhgvc's picture

if people have skin in the game, they get off there asses and work to change it. quickest way to STOP unending wars is to ensure EVERY citizen is at risk of joining in on said wars. as long as folks like you and these snowflakes are never in danger, you can sit back on spout off without ever doing anything about it all.

vq1's picture

lets be careful busting the balls of liberal arts majors. Wiki states: liberal arts are considered essential for a free person (Latin: liberalis, "worthy of a free person")[1] to know in order to take an active part in civic life, something that (for Ancient Greece) included participating in public debate, defending oneself in court, serving on juries, and most importantly, military service. Grammar, logic, and rhetoric were the core liberal arts, while arithmetic, geometry, the theory of music, and astronomy also played a (somewhat lesser) part in education.[2]
https://en.wikipedia.org/wiki/Liberal_arts

We dont want forever a bunch of non-thinking "intellectuals" running our banking and science institutions. We want critical thinkers.

I have a liberal arts degree. I am gainfully employed making REAL things that are useful for REAL people doing REAL work in the REAL world.

I will admit that the major has been highjacked by bullshit, but dont throw the baby out with the bath water.

WallHoo's picture

The perfect greek citizen!Thats what democracy looks like and these are the ideals!I wish you good things for you and your life!

Boxed Merlot's picture

..(.Ancient Greece) included...Grammar, logic, and rhetoric...

The Greek Pathos, Ethos and Logos training provided a decent foundation on which to build cogent thought, but I personally find the ancient Roman "authority" of "force" to be an element to be reckoned with.

Neither system allows for an adequate deciphering of "truth", [alethia], however, and as a result a continuation of building on these structures may eventually be found to be not only faulty and dangerous, but downright lethal.

I remember a story Jesus spoke about while He was here concerning a wall falling on a bunch of people who died as a result. The report went out about the dead deserved it as it was a "divine" judgement but He seemed to redirect the report as having roots in the failure, obsolescence and insolence of man.

jmf.

Cigar Smoker's picture

On my first day orientation at Stanford in 1953 we were told: "This college education will never make you a dime, we grade on the curve with a 33% flunk-out rate, if you work hard and manage to get a degree with good grades maybe you can gain admission to a good professional school and get a degree in medicine, law, or engineering if you need to make a living. Look to your left, look to your right, one of you will be gone by Christmas, so get to work, this will be the hardest thing you ever do in your life".  I worked my way through as a carpenter, took my degree in philosophy, and when I graduated went back to work as a carpenter and eventually became a builder, but an educated builder.

artichoke's picture

It's not to say that every liberal arts graduate is useless.  But it's worse now than when you attended.  They must now attend courses that indoctrinate them into a communistic mindset.

So as a prospective employer, or private underwriter of student loans, it would be a good enough assumption that a given liberal arts student is worthless enough not to hire, or not to lend to.