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Did JPMorgan Pop The Student Loan Bubble?

Tyler Durden's picture


Back in 2006, contrary to conventional wisdom, many financial professionals were well aware of the subprime bubble, and that the trajectory of home prices was unsustainable. However, because there was no way to know just when it would pop, few if any dared to bet against the herd (those who did, and did so early despite all odds, made greater than 100-1 returns). Fast forward to today, when the most comparable to subprime, cheap credit-induced bubble, is that of student loans (for extended literature on why the non-dischargeable student loan bubble will "create a generation of wage slavery" read this and much of the easily accessible literature on the topic elsewhere) which have now surpassed $1 trillion in notional. Yet oddly enough, just like in the case of the subprime bubble, so in the ongoing expansion of the credit bubble manifested in this case by student loans, we have an early warning that the party is almost over, coming from the most unexpected of sources: JPMorgan.

Recall that in October 2006, 5 months before New Century started the March 2007 collapsing dominoes that ultimately translated to the bursting of both the housing and credit bubbles several short months later, culminating with the failure of Bear, Lehman, AIG, The Reserve Fund, and the near end of capitalism 'we know it', it was JPMorgan who sounded a red alert, and proceeded to pull entirely out of the Subprime space. From Fortune, two weeks before the Lehman failure: "It was the second week of October 2006. William King, then J.P. Morgan's chief of securitized products, was vacationing in Rwanda. One evening CEO Jamie Dimon tracked him down to fire a red alert. "Billy, I really want you to watch out for subprime!" Dimon's voice crackled over King's hotel phone. "We need to sell a lot of our positions. I've seen it before. This stuff could go up in smoke!" Dimon was right (as was Goldman, but that's another story), while most of his competitors piled on into this latest ponzi scheme of epic greed, whose only resolution would be a wholesale taxpayer bailout. We all know how that chapter ended (or hasn't - after all everyone is still demanding another $1 trillion from the Fed at least to get their S&P limit up fix, and then another, and another). And now, over 5 years later, history repeats itself: JPM is officially getting out of student loans. If history serves, what happens next will not be pretty.

American Banker brings us the full story:

U.S. Bancorp (USB) is pulling out of the private student loans market and JPMorgan Chase (JPM) is sharply reducing its lending, as banking regulators step up their scrutiny of the products.


JPMorgan Chase will limit student lending to existing customers starting in July, a bank spokesman told American Banker on Friday. The bank laid off 24 employees who make sales calls to colleges as part of its decision.

The official reason:

"The private student loan market is continuing to decline, so we decided to focus on Chase customers," spokesman Thomas Kelly says.

Ah yes, focusing on customers, and providing liquidity no doubt, courtesy of Blythe Masters. Joking aside, what JPMorgan is explicitly telling us is that it can't make money lending out to the one group of the population where demand for credit money is virtually infinite (after all 46% of America's 16-24 year olds are out of a job: what else are they going to?), and furthermore, with debt being non-dischargable, this is about as safe a carry trade as any, even when faced with the prospect of bankruptcy. What JPM is implicitly saying, is that the party is over, and all private sector originators are hunkering down, in anticipation of the hammer falling. Or if they aren't, they should be.

JPM is not alone:

Minneapolis-based U.S. Bank sent a letter to participating colleges and universities saying that it would no longer be accepting student loan applications as of March 29, a spokesman told American Banker on Friday.


"We are in fact exiting the private student lending business," U.S. Bank spokesman Thomas Joyce said, adding that the bank's business was too small to be worthwhile.


"The reasoning is we're a very small player, less than 1.5% of market share," Joyce adds. "It's a very small business for the bank, and we've decided to make a strategic shift and move resources."

Which, however, is not to say that there will be no source of student loans. On Friday alone we found out that in February the US government added another $11 billion in student debt to the Federal tally, a run-rate which is now well over $10 billion a month an accelerating: a rate of change which is almost as great as the increase in Apple market cap. So who will be left picking up the pieces? Why the Consumer Financial Protection Bureau, funded by none other than Ben Bernanke, and headed by the same Richard Cordray that Obama shoved into his spot over Republican protests, when taking advantage of a recessed Congress.

"What we are likely to see over the next few months is a lot of private education lenders rethinking the product, particularly if it appears that the CFPB is going to become more activist," says Kevin Petrasic, a partner with law firm Paul Hastings.


"Historically there's been a patchwork of regulation towards private student lenders," he adds. "The CFPB allows for a more uniform and consistent approach and identification of the issues. It also provides a network, effectively a data-gathering base that is going to enable the agency to get all the stories that are out there."


The CFPB recently began accepting student loan complaints on its website.


"I think there's going to be a lot of emphasis and focus … in terms of what is deemed to be fair and what is over the line with collections and marketing," Petrasic says, warning that "the challenge for the CFPB in this area is going to be trying to figure out how to set consumer protection standards without essentially eviscerating availability of the product."

And with all private players stepping out very actively, it only leaves the government, with its extensive system of 'checks and balances', to hand out loans to America's ever more destitute students, with the reckless abandon of a Wells Fargo NINJA-specialized loan officer in 2005. What will be hilarious in 2014, when taxpayers are fuming at the latest multi-trillion bailout, now that we know that $270 billion in student loans are at least 30 days delinquent which can only have one very sad ending, is that the government will have no evil banker scapegoats to blame loose lending standards on. And why would they: after all it is this administration's sworn Keynesian duty to make every student a debt slave in perpetuity, but only after they buy a lifetime supply of iPads. Then again by 2014 we will have far greater problems (and for most in the administration, it will be "someone else's problem").

For now, our advice - just do what Jamie Dimon is doing: duck and hide for cover.

Oh, and if there is a cheap student loan synthetic short out there, which has the same upside potential as the ABX did in late 2006, please advise.


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Sun, 04/08/2012 - 04:33 | 2325788 NewWorldOrange
NewWorldOrange's picture

Once they're underwater they can put their degree to work, weaving baskets.

Sun, 04/08/2012 - 00:26 | 2325582 KickIce
KickIce's picture

Doesn't that apply to almost everything?  Home, healthcare and auto; every big ticket item we purchase and government has their fingerprints all over it.

Sun, 04/08/2012 - 00:39 | 2325602 LetThemEatRand
LetThemEatRand's picture

Because We the People are bailing out the banks and other lenderss.  You think it's socialism?  We're being forced to make good on bad loans because the fucking oligarchs don't want to take a loss.   Privatize the gains, socialize the losses.  Rich get richer, middle class turns poor, poor get poorer.  Get it?

Sun, 04/08/2012 - 01:10 | 2325627 Saro
Saro's picture

"You think it's socialism?"

Actually, it's fascism: the blending of corporate and state power.  And corporations can privatize profits and socialize losses only because they operate with the full force of the state backing them.  The state, infact, is what brought corporations about in the first place.

Disregard government; acquire freedom.


Sun, 04/08/2012 - 02:52 | 2325701 GoinFawr
GoinFawr's picture

Could you please direct me to this magical place in history where power didn't love a vacuum?

Sun, 04/08/2012 - 04:37 | 2325791 StychoKiller
StychoKiller's picture

Easter Island, thataway... --------------------------------------------->

Sun, 04/08/2012 - 05:10 | 2325806 KickIce
KickIce's picture

1776.  I think there was the attitude that disputes should be resolved at the individual level and that and if you didn't like a product you could take your business elsewhere.  (Otherwise known as capitalism.)  Our current mentality is that at each perceived injustice we feel that government must step in to fix it which is why we are now smothered in regulation. 

Sun, 04/08/2012 - 16:41 | 2326576 GoinFawr
GoinFawr's picture

ok great, 1776; good times in the Americas, if you were white. But now that we are in 2012, can you please point me in the direction of the indigenous populations left to be robbed/genocided in order to support the ever expanding requirements of your 'capitalism'.

Sun, 04/08/2012 - 17:10 | 2326585 KickIce
KickIce's picture

Learn some history, the Founders didn't outlaw slavery because they thought it would go away on itsr own.  Several "non white people" played prominent roles in the Revolution.  In 2012 I unfortunately share your view.

Sun, 04/08/2012 - 17:39 | 2326627 GoinFawr
GoinFawr's picture

"Learn some history"-goodness gracious was that ever ironic. Did you mean the version you've apparently taken hook line and sinker, or the stuff based on actual historical record?

 Calling David Pierre, calling David Pierre: cleanup on this thread required.

 This one is labouring under the misapprehension that I'm  the one who needs a refresher.

Q. Of the first five presidents, how many 'owned' slaves while POTUS?


Sun, 04/08/2012 - 18:18 | 2326684 KickIce
KickIce's picture

I'm well aware they owned slaves and we can argue treatment all day.  But look up the role of blacks in the American Revolution - Beck has some good shows on this topic.

Sun, 04/08/2012 - 18:29 | 2326709 GoinFawr
GoinFawr's picture

No we can't 'argue their treatment all day', seeing as the fact of their existence obliterates your initial point regarding 'abolitionists' and the founding fathers, who were most certainly leading by example.

And this doesn't even scratch the surface of the genocide/robbery of indigenous populations that also contributed to making possible your alleged 'halcyon days' of capitalism.

OTOH, if you were as you say 'well aware' of all these egregious injustices when you chose 1776 as the apex of what you call capitalism, that just makes you disingenuous.

Sun, 04/08/2012 - 19:34 | 2326801 KickIce
KickIce's picture

No I do not agree with slavery but my point was just because they were slaves doesn't mean they were mistreated, not all owners were a-holes.  That being said, I have read enough accounts that state they we're treated well to feel comfortable in my position.

Indians, yeah, no doubt we should have treated them better.

I chose 1776 because it setup a government that freed us of tyranny and setup one that was unique from any other.  Obviously the execution of that plan has been far from perfect and that is why we find ourselves FUBARed today.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government,.."

It's a shame this was not executed better.

Sun, 04/08/2012 - 13:33 | 2326321 GeezerGeek
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The Garden if Eden, before Eve was created.

Sun, 04/08/2012 - 06:37 | 2325842 barroter
barroter's picture

"Disregard government;"...while you're at it, DISCARD business tyranny as well. 

When libertarians go full throttle against BUSINESS as well, and not just gov't, I'll listen.

Sun, 04/08/2012 - 08:11 | 2325913 TWSceptic
TWSceptic's picture

"Business tyranny" can only exists through government.


In the end, govt is to blame for all problems.

Sun, 04/08/2012 - 10:42 | 2326076 Marco
Marco's picture

Tyranny can exist any time a necessary resource is in short supply and you don't own any ...

Government is nothing more and nothing less than a land owner.

Sun, 04/08/2012 - 12:26 | 2326211 Saro
Saro's picture

Government is the gun by which corporations enslave you.

Remove their gun, and they have no power.

Sun, 04/08/2012 - 16:32 | 2326569 GoinFawr
GoinFawr's picture

Well, there are guns, and then there are guns.

Sun, 04/08/2012 - 04:37 | 2325789 StychoKiller
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Yet somehow, you "think" that Ayn Rand supported such notions?  Reedin' compreehenshun wuz not yer strong soot, waz it?

Sun, 04/08/2012 - 10:13 | 2325816 KickIce
KickIce's picture

So what's your solution, more government/legislation?  These are the same oligarchs that turn our politicians into puppets and either write the laws in their favor or buy off the system.  What about Glass-Steagel, do you think are representatives had our welfare in mind when they overturned it?  Same with NAFTA or Bush's no child left behind?  What do you think has destroyed more lives, the Civil War or the Welfare program?

Sun, 04/08/2012 - 11:11 | 2326106 LetThemEatRand
LetThemEatRand's picture

You do realize that in the same paragraph that you advocate less government, you use an example of eliminating a good regulation (Glass-Steagel) as an example of why government is bad.  So basically you want more government, just the right kind.  Government with proper checks and balances can do good and what all Randers fail to realize is that they are advocating turning over the keys to the guys doing the corrupting.  Take away elected government and they will surely replace it with something much worse.  Ask history.

Sun, 04/08/2012 - 11:20 | 2326120 KickIce
KickIce's picture

No, I'm advocating correct government, I do believe there are good laws that must be uniformly applied.  Also, they replaced Glass-Steagel with Dodd-Frank so net-net we came out with more ineffective legislation.

Sun, 04/08/2012 - 14:11 | 2326385 malek
malek's picture

Are you able to distinguish between less and none?

And yes, less is more than none but that doesn't make him or anybody a big-government supporter.

Didn't you get the notice? The 2000 page Dodd-Frank is supposed to be today's better replacement for Glass-Steagall. You seem to be proposing even more "regulation" than we have today.

Sun, 04/08/2012 - 17:05 | 2326596 KickIce
KickIce's picture

I get the feeling that he/she thinks capitalism = anarchy.  The Founders understood the need for basic laws otherwise there would be no need to setup the Judicial branch.  But they also understood that Lady Justice should be blind, a Republic succeeds only when laws apply to all and or applied uniformly.

Sun, 04/08/2012 - 08:09 | 2325908 TWSceptic
TWSceptic's picture

Actually government is bailing out the banks and regulating the market (corporatism & fascism). The pricate sector is not to blame, in any shape or form.


You sound like one of those 99% ers. You understand half of the problem, but the most important half you ignore. You should be protesting the government, not the banks.

Sun, 04/08/2012 - 11:14 | 2326109 LetThemEatRand
LetThemEatRand's picture

The private sector is not to blame for corrupting government?  It's all government's fault?   I seem to remember a similar mentality when it comes to rape victims....  Let's get rid of all the women.  They are to blame for the rape epidemic.

Sun, 04/08/2012 - 11:36 | 2326144 tmosley
tmosley's picture

It's more like saying porn is to blame for the rape epidemic.  Remember, it is the GOVERNMENT doing the raping, with these corporations suggesting who they rape.

But you are an idiot, so I doubt you will see the complete and utter failure of your metaphore, and instead find some way to blame it all on Ayn Rand.

Sun, 04/08/2012 - 00:55 | 2325611 Shock and Aweful
Shock and Aweful's picture

Your answer is a bit simple

Government, in and of itself is not the problem....for anything.

However, government, whose sole purpose is to support, initiate and enforce laws and programs for the betterment of corporations and their monied interests is.  And this student loan issue is no different.

The "evil" government is only doing what they have been permitted to do, or ordered to do by their corporate masters.  Do you really think that the people in the capitol are as incompetent as they seem?  Don't you think that if it were just sheer incompetence, that every once in a dumb luck, they would pass some law that would actully be a postive, or do some real good for the average person?  I therefore make the case that it is by design, and that can only mean ONE thing....our government has been co-opted by, and therefore is nothing more than an extension of..... the corporation. can keep voting one party in and one party out all you want.  You can bitch about Obungo or Bush...and you can continue to call one a socialist and then call the other a fascist (which would be closer to the truth)....but you will never get anywhere. 

Nothing will ever change or improve until we take on a real responsibility over OUR government ... which means doing MORE than bitching .... and means that you will have to quit expecting that voting every 2 years is all the vigilence it takes to keep a republic from going the way of Rome.

So, if you really want to blame someone for the mess we are in....if you are an adult now....then you need to look no futher than your goddamn self.  This shit-storm has been brewing for at least the last 30 years.  Most of you over 50 have been enjoying the excess that was created by the work and wealth (REAL WEALTH) created from 1870 - 1970.  You got to live the highlife on the credit-rating of your grandparents and their parents.  And while you partied and said to yourself "We are in a new paradigm of endless prosperity"... the forces of greed, coruption and glutony were turning a nation that once honored hard work into a group of cut-throat individualists who thought it was their RIGHT to be rich...and that their individuality was the most important virtue anyone in a "free society"" could have   (and how does one become an individual in America?  By buying it of course!!)

So....fuck worrying about student loans...that's just a sideshow.  We are truly fucked....and not just because we are in debt (in terms of paper money - that can be fixed easy - just ask Ben) We are fucked because we have sacrificed our sense of community, integrity, prudence and diligence on the alter of Mammon.  hahahaha  (say I'm fucking liar)


Sun, 04/08/2012 - 03:59 | 2325768 Mary Wilbur
Mary Wilbur's picture

Fuck your lazy ass. I worked hard, didn't live on credit, didn't own a car until I was in my thirties, didn't buy a (modest) house until my husband and I saved enough to make a down payment large enough so we afford the monthly mortgage payments, and didn't buy a lot of consumer crap because we didn't have the money. Your problem is you have gotten everything you ever wanted in life without having to work for it. But that is not your fault. Minimum wage laws prevent teens from finding jobs because they're value as workers is lower than the minimum wage. 

Sun, 04/08/2012 - 09:18 | 2325977 centerline
centerline's picture

Hey dumbass - the poster was talking in general.  You are the exception when it comes to personal finance.  Got it?  But, it is not just about finance, is it?  How about community, family, environment, social responsibility, etc.?  

Sun, 04/08/2012 - 10:16 | 2326042 KickIce
KickIce's picture

But I'm entitled to free babysitting, er education.

Sun, 04/08/2012 - 13:55 | 2326356 GeezerGeek
GeezerGeek's picture

You say "Government, in and of itself is not the problem....for anything." Then you proceed to claim that "government is only doing what they have been permitted to do, or ordered to do by their corporate masters." Actually, neither government nor corporations are to blame, as neither exists without the people working within them. So really it is people that are the root of the problem. People can be corrupted. People can grasp after money, power, fame, sex, etc., so as long as institutions are controlled by people there will be abuses of power, corruption, and so on. Blaming government exclusively is obviously wrong, because corporations in the past were quite willing to brutalize and even murder employees in the absence of government restraints. Governments obviously can inflict even greater harm on the citizens - think Stalin, Mao, Hitler, Pol Pot. The best we can hope for is a government strong enough to restrain private power structures - gangs, drug cartels, corporations, etc. - but not so strong it can control/restrain the individuals' freedoms.

Sun, 04/08/2012 - 02:50 | 2325695 Die Weiße Rose
Die Weiße Rose's picture

As a young german Student, after having completed my german education through the College and then the excellent Heidelberg University in Germany, I was then drafted to then serve for 2 years as a Soldier in the NATO.

I had no interest in serving as a Soldier in any Army, for various (to me) valid and intelligent reasons and experiences. However we had NATO conscription rules in Germany back then (not so now) So I ventured out to Australia and was shocked to learn, that Students in the US and UK and also in Australia had to pay for their own Education.

These Priorities seem to be completely wrong, in the US and UK to serve as a Soldier seems to be a "honorable" career-move supported by so-called "Patriots" and Politicians who are of the "US good - Everyone else bad" mentality, while in reality taking the lazy way out to grow their always greedy and hungry Defence Industry and sending young Kids into Conflicts that have been created by their own Governments to get cheap Oil and illegally invade Resource-rich and strategically placed sovereign nations to help US and UK "multinational" conglomerates ripp off the rest of humanity. Let me remind all those young Kids who are so eager to "fight a war on terror" that you are a likely candidate to become a terrorist, as many a Vet has found out, returning home from Iraq and Afghanistan with PTSD, (just ask Bradley Manning or check out the Helicopter Gunship Video of Soldiers acting worse than terrorists against civilians )

Education and Health plays only a minor role in all their thinking.These socalled "Patriots" and Politicians are thinking only of one thing: to monetize, to make Profits, to exploit, to commercialize, to capitalize on all aspects of human endeavour, especially education, since these players want to be "in Control" of any Information and Technology produced by an commercialized and Industrialized Education. (Universities sponsored by large commercial Enterprize)

What kind of Education System is really being offered by todays monetized and commercialized Universities ?

The so-called "Patriots" and Politicians believe strongly that Education should not be free, but that Education is now their own privileged Intellectual Property!

year after year, No matter what! Never mind free Health-care or free Education, never mind World - Peace !

There are those who always believed that Education should be free for anyone,

Education is a fundamental Human right for any self-respecting free Nation.

Education should Not be monetized by Bankers and Politicians

to instead enslave people who seek to better themselves into financial Debt.

Education is Not a Privilege, free Education Is a basic fundamental Human Right!

Free Education is a Right worth fighting for.


Sun, 04/08/2012 - 03:22 | 2325730 GoinFawr
GoinFawr's picture

nonono, you've got it all backwards, haven't you been reading the comments?

Gov't education=bad

Commercialized education=good

Because even though a democratically elected gov't is specifically mandated with protecting the interests of the electorate, it always always always always is out to do just the opposite, especially in the field of education; whereas a private company whose only mandate is to 'keep it in the black', will always always always provide the highest level of instruction regardless of whether or not it is in the company's best interests to do so, just because.

And I'll have you know the US budgeted ~50 BILLION fiatscos last year for public education, that's almost 1/20th of what they spent on 'defense'! Good god what do you libs wants?!?!?!?

Sun, 04/08/2012 - 06:41 | 2325845 Market Efficien...
Market Efficiency Romantic's picture

There is a difference between gov't subsidized learning or gov't subsidized stundent lending and a public infrastructure in the sense of provision of a common good. The former takes an individual perspective, the ladder a collective one.

Commercial education adds a far more dangerous interest to the game. Commercial means, offering courses on whatever offers the greates payoff and reducing course offers regarding less commercially relevant aspects. That sure is not in the interest of society as a whole and enters lots of blindspots into the knowledge of the educated.

For that kind of commercial education, set up corporate universities. That way, student would at least get a sense that there is a content bias.

Sun, 04/08/2012 - 03:28 | 2325736 FlyPaper
FlyPaper's picture

Thank you WR;) for your interesting views on education.

In the US, education is not a "human right."  However,we, in the US, pay to educate through grade 12 via our public systems as an educated population is greatly to our national benefit.  One does not need a "right" to do the right thing.

University level education at State Universities is paid for substantially by tax dollars, and partially by tuition.  

The system is further designed in most States to provide a 2-year "Associates" degree, generally at a much lower tuition level.


Paying for something yourself, like your tuition, is an incredibly important step in learning the value of an education.  People value the things they have to work for.   Demanding a "right" to extract your tuition from someone else's pocketbook is a self-centered Socialst concept, born largely in German thinking extending back to Marx and the great Kaiser.  (And we all know how that turned out).

>> So, WR:), please do your research so you at least "look" like a University-educated individual instead of a socalist patsy, who is pissed off because he was drafted.






Sun, 04/08/2012 - 04:49 | 2325798 NewWorldOrange
NewWorldOrange's picture

The best education comes from self-education. And although I have two degrees NOT in underwater basket weaving, it's always been much easier for me to get a job by just walking into small businesses and selling myself than to send out a bunch of resumes to corporate bureaucrats looking for an impressive piece of paper.

Sun, 04/08/2012 - 23:20 | 2327170 Die Weiße Rose
Die Weiße Rose's picture

Fly Paper, obviously you have no clue about German History.

besides, I changed my mind about US and UK education

I now think anglophile Cretins should pay double for their education !

When it comes to socialist Patsies, you in the US (and UK) should know!

The US is totalitarian state of a Government sponsored Corporate Socialism, with those endless "Stimulus" and "bail-outs" mostly seen in the US and UK and most people here on ZH are Stimulus addicts who scream for a "smaller" US Government , while at the same time aggressively supporting that US state sponsored Socialism (as long as the Fed keeps Stimulus Money flowing, Taxes stay low,China manufactures Apple I-Pads at Foxconn and the Gold-Price goes up ) I have never seen so many anglophile Socialists as here on ZH. Most of you are stimulus addicts, you are here because you want a free ride ! This is the anglophile mutual admiration Society here on ZH and anyone who thinks outside the Box will be labelled a liberal or a socialist or a Marxist or a Nazi or a Black or a White.

Yes, this is the anglophile mutual admiration Society here on ZH,

with not one original thought or idea !

Why are you all here ? Is it so you can pretend you got it all figured out,

while at the same time expecting the world to give you a free ride ?

well guess what -

Time to get off the Food-stamps,

time to get off the Government sponsored  Socialist Stimulus for Banks and Corporates !

you Americans have been brainwashed by Hollywood fairytales and dreams of World Domination for too long, so it comes as no surprise that some sense of Reality will need to be restored ! Time to wake up and smell the flowers !

So yes, since stupidity is neither a right nor a privilege

ignorant Cretins should pay double for the benefit of a higher Education

if only to make this world a better and safer place.



Tue, 04/10/2012 - 00:02 | 2330390 Die Weiße Rose
Die Weiße Rose's picture

FlyPaper, here is some free education for your research, since you seem to have a rather one-sided view

about German History and free German Universities

(and how msm-momos all think they 'know' how that turned out).

The White Rose (German: die Weiße Rose) was a non-violent, intellectual resistance group in Nazi Germany, consisting of students from the University of Munich and their philosophy professor. The group became known for an anonymous leaflet and graffiti campaign, lasting from June 1942 until February 1943, that called for active opposition to dictator Adolf Hitler's regime.

The six most recognized members of the group were arrested by the Gestapo and beheaded in 1943. The text of their sixth leaflet was smuggled by Helmuth James Graf von Moltke out of Germany through Scandinavia to the United Kingdom, and in July 1943 copies of it were dropped over Germany by Allied planes, retitled "The Manifesto of the Students of Munich."[1] Another member, Hans Conrad Leipelt, who helped distribute Leaflet 6 in Hamburg, was executed on January 29, 1945 for his participation.

Today, the members of the White Rose are honoured in Germany amongst its greatest heroes, since they opposed the Third Reich in the face of death.

these German Students paid the highest price

to fight for free education, to fight for free German Universities free.

(free from politics, free from commercial enterprise)


Sun, 04/08/2012 - 03:47 | 2325755 Mary Wilbur
Mary Wilbur's picture

Where did you get the idea that education, health etc. is free? There are no free lunches. Taxpayers are paying for it. Education is not a fundamental human right. It is a priviledge. Only the spoiled consider education to be theirs by what? divine right. 

Mon, 04/09/2012 - 00:17 | 2327222 Die Weiße Rose
Die Weiße Rose's picture

Mary Wilbur, maybe you should get out more -

why do you think so many Americans study in free German Universities ?

no tuition fees levied at German universities for either German students or foreign nationals....

Still, there are a couple of things you should be aware of: 1) You need to pass a German proficiency exam before you can enroll. It requires a fairly high level of German and you will need a good deal of formal study before you can pass it. You need to do this in either your home country, or in Germany, at a language school (which will charge tuition).

The Humboldt University of Berlin (German Humboldt-Universität zu Berlin) is Berlin's oldest university, founded in 1810 as the University of Berlin (Universität zu Berlin) by the liberal Prussian educational reformer and linguist Wilhelm von Humboldt, whose university model has strongly influenced other European and Western universities.

Humboldt University is a state university with a large number of students (37,145 in 2003, among them more than 4,662 foreign students) after the model of West German universities, and like its counterpart Free University of Berlin.

A little History

The Freie Universität Berlin was founded by students and scholars on December 4, 1948, with the support of the American Allies and Berlin politicians as a response to the persecution of students critical of the system at Humboldt University in the Soviet sector of the divided city of Berlin. These students and scholars wanted to study and carry out research at the Freie Universität, free of political influence. Thanks to generous donations from the United States, the Freie Universität was able to construct several new central building complexes including the Benjamin Franklin university clinic complex and the Henry Ford Building, the central lecture building. Based on its founding tradition, the Freie Universität’s seal to this day bears the Latin terms for Truth, Justice, and Liberty. In 2007, the Freie Universität dedicated a monument to the founding students who were murdered by the Soviet secret service. The university presents its Freedom Award to personalities who have made a special contribution toward the cause of freedom.

it might come as a surprise to some of you, but there have been free Universities in Europe -

long before America was even discovered.


Sun, 04/08/2012 - 04:14 | 2325778 Colonial Intent
Colonial Intent's picture

You are casting pearls before swine here mate:-)

TPTB want their populations to be weak and uneducated, how do you think they stay in power.

Look what happens when people have access to the internets, they wise up regardless of creed or color, they stop drinking the kool aid and start asking questions, TPTB need to control the interwebs to stop them.

Harry Tuttle (coz the internet is a series of tubes.....)


Sun, 04/08/2012 - 04:43 | 2325794 StychoKiller
StychoKiller's picture

Public Education == Brainwashing via Govt-supplied Propaganda

Check out: "Some Lessons from the Underground History of American Education" by John Taylor Gatto, found in "Everything You Know is Wrong",  ISBN 978-1-56731-637-7, pgs 274-287

Sun, 04/08/2012 - 07:24 | 2325868 Ganja Jane
Ganja Jane's picture

Taxpayer Funded Government Sponsored Corporate Indoctrination Centers.

Sun, 04/08/2012 - 07:24 | 2325869 Ganja Jane
Ganja Jane's picture

Taxpayer Funded Government Sponsored Corporate Indoctrination Centers.

Sun, 04/08/2012 - 05:55 | 2325825 Sandmann
Sandmann's picture

You weren't drafted into NATO but into the Bundeswehr. If you didn't want to be conscripted you should have married to avoid being drafted or have studied in Berlin. You could have worked in a hospital or old people's home instead. Noone drafted you into NATO - that is pure political polemic

Free Education is a Right worth fighting for.


What does that mean ? So @fight@ for it - write a few pamphlets and slogans - it must work - it aways has !

Tue, 04/10/2012 - 00:16 | 2327260 Die Weiße Rose
Die Weiße Rose's picture

Sandman - The Bundeswehr is part of the NATO you dope !

and mandatory conscription in Germany was actually

the American occupiers and their Allies Cold-War scheme

imposed on young Germans like me to support their new Master-Plan.

So fuck off NATO and all US War - mongers !

Get your terrorist Missiles and genocide Drones out of Germany and Europe !


Sun, 04/08/2012 - 09:17 | 2325974 Sean7k
Sean7k's picture

Nice rant. I would suggest that liberty is a fundamental human right and as long as we have the liberty to pursue the acquisition of knowledge in any particular subject, regardless where it leads, and then use that knowledge for our economic benefit (without someone requiring a degree, though some standards would be helpful for some professions).

There is no such thing as free education outside of this construct. If someone wants to sponsor a student's quest, that is another matter. When we ascribe zero cost (or delay the cost) we provide little incentive to make commercial use of our education. 

Worse, we create an atmosphere where costs become related to the amount of funding that is made available- see the medical community and hospitals. 

Liberty and the protection of private property are the bedrock of opportunity for all classes. History has proven this- it is the Elites that would have us suffer under all other directives.


Why was this placed under sandmann? I was replying to Wie uber rose?

Sun, 04/08/2012 - 11:09 | 2326105 LarryDavis
LarryDavis's picture

Du hast Recht. 

Mon, 04/09/2012 - 01:05 | 2327288 Lednbrass
Lednbrass's picture

And if your nation had been forced to pay the full cost of its military defense on its own for the last 60+ years instead of sponging off of the US, do you think a free university education would have been possible?

It will be interesting to see what happens in Germany when your volunteer forces follow the same path they have in the US- very disproportionate representation from particular geographic regions. Here it is the South that produces a hugely outsize portion of the military, for you I think it will be the Osties.

Sun, 04/08/2012 - 07:34 | 2325876 Gully Foyle
Gully Foyle's picture

I'm confused as to why people blame the educational system for so called lack of education. The parents are to blame.

Where the fuck did personal responsibility go? First you pawn your kids off to the system, so you can do fuck all with your own time, then you bitch about the system you allowed. It isn't even that you allowed it so much as ignored the children and the system because your own self worth is so weak you need to pursue shit that makes you feel good about yourself.

If your kids are losers it's your own goddamned fault. If the system is fucked it's your own damn fault for not being involved. At least those Christian wackos who fucked up various school systems had the balls to get elected to the fucking school board.

Instead the majority of you asshole losers decide to merely piss and moan about how bad things are.

Look in the fucking mirror.

And why beholdest thou the mote that is in thy brother's eye, but considerest not the beam that is in thine own eye?

Sun, 04/08/2012 - 09:33 | 2326003 centerline
centerline's picture

Bravo.  But, there is more at play.  Since the 70's, it has been the frog in boiling water analogy.  So many things converging on a small window of time... I can't even begin to list them all.  Suffice it say the end result is a breakdown in the family structure, as well as community structure.  Now coupled with panic - because most people "feel" the "dream" of a better future slipping away but can't - quite - put - thier minds around why.  Shit is accelerating right into oblivion.

I agree in principle that people need to look in the mirror.  But, unfortunately, it won't do any good.  Most people completely lack the skills to question thier own behavior on the basis of how the world has shaped them.  Of the few that can, I will bet the majority only finds blame instead of making changes.  

Sun, 04/08/2012 - 14:26 | 2326413 GeezerGeek
GeezerGeek's picture

Suggesting that "the parents are to blame" without exception is simply wrong.

These days, in most parts of the world, families exist in the larger context of communities and ultimately governments. It is impossible in such circumstances to raise one's child in isolation, and the effects of interaction with elements external to the family can have undesirable effects. People who have tried to isolate themselves, or who have tried to counteract these external elements have, in many instances, been persecuted - even prosecuted - by government authorities. In certain European countries, I've read, home schooling is essentially a criminal act. In the U.S. it is mandatory that children attend school of some sort, so unless you are willing and able to home school, some group is going to be able to infect children with ideas you might find objectionable  How would you overcome this? Even the best of parents - whatever that means - sometimes fail to raise children who aren't - as you put it - losers.

I find the inclusion of a mini-rant about "those Christian wackos who fucked up various school systems" oddly justaposed with the closing quote from the Bible. Would you care to elaborate about the former? I've never read about Christians forcing all students to become Christians - not that that's possible anyway - or anything close.

Sun, 04/08/2012 - 09:58 | 2326024 rbg81
rbg81's picture

Hmmm....let me think.  This is all unfolding in an election year right?  I'll wager that Obama will "solve" this manufactured crisis by announcing a moratorium on student loans.  Or a reduction in interest rates to 0.01% or some ridiculously low number (like the interest rate paid on CDs).  After all, if deadbeat homeowners can squat in their houses, why should students have to actually pay for their degrees (or 4-5 year long vacations from reality)?  This will once again energize the student voting base to rally to his side.  Not to mention women, who will think "what a nice, generous man".  The fact that he's being generous with Other Peoples Money will escape them, but they we're talking logic here.  Of course, these relief measures will inevitably expire about 1 year or so after his reelection--fake out, bitches!.

Honestly, American politics has become such a sick joke that its almost funny.

Sun, 04/08/2012 - 15:02 | 2326453 Cathartes Aura
Cathartes Aura's picture

ahhh yes, you've touched on the latest voter-nerve. . .

Not to mention women, who will think "what a nice, generous man".

the fact that "women" are deserting the Party of Body Legislation, female bodies specifically. 

how perfect is this storm, how well played by both political "sides" - and eagerly imbibed by all those who align themselves with phony "gender" roles.

ahh, but no, it CAN'T be a political ploy - it's just e-motional wimmenz who can't see the RIGHT side.



Sun, 04/08/2012 - 11:54 | 2326188 Jack Burton
Jack Burton's picture

A good point! We need to know how education got this expensive, and how college campuses turned into five star party resorts.  I had a kid go to college and it was an expensive five year party. In my day we joined the military and then used GI bill benefits to help pay for what was already a very reasonable price for a 4 year state college.

Sun, 04/08/2012 - 12:39 | 2326210 vast-dom
vast-dom's picture

Yes. But government IS the banks and the banks ARE governement -- they are simply all subzidized entities of themselves (a la everyone is Tyler and Tyler is me and) as paid for by tax-payers and imaginary printing of imaginary fiat all hedged against more derivatives in debt. 

Imagine if you could pay for your groceries like that? A student's gotta eat....

Sun, 04/08/2012 - 21:20 | 2326973 island
island's picture

However, clearly the "student loan game" is just another way for the banksters to pillage the populace.  Do you think the banksters will lose money on these loans.  No way.  Jack and Jill Taxpayer will be taxed to keep the bankers whole. 

When will people wake up?  The game is the same over and over.

Sat, 04/07/2012 - 23:41 | 2325512 bugs_
bugs_'s picture

the higher education bubble will pop afterwards - enrollments will drop off - i'm sure the school budgets aren't hedged for this.

Sun, 04/08/2012 - 00:14 | 2325562 tenpanhandle
tenpanhandle's picture

Wonder where they'll shunt the disappearing work force when becoming a paid for student is no longer an available avenue, maybe the Obama civilian security forces or cannon fodder in the Mid-East oil/killing fields.  I have very little respect for todays student population and don't much care.  Their follow der leader attitude will take them to the very chains they decry in their various forms of unrest.  Welcome to the real world and at the same time say goodbye to the world you chumps. 

Sun, 04/08/2012 - 00:14 | 2325563 MachoMan
MachoMan's picture

No budgets are hedged for contraction...  they're all based on ever increasing markets...  of inputs...  of demand...  it's crazy.

Give school administrators the power to spend other peoples' money and...  well, the rest is history.

Expect a desperate attempt to stuff more chinese students into the gap left by americans in 5, 4, 3....

Sun, 04/08/2012 - 10:21 | 2326051 bugs_
bugs_'s picture

I think this is already occuring.  Most higher education operations have already become immigration machines running at high gear and lowering standards to maintain the flow.  I just don't know that they can run at an even higher gear so there will be no option to stop the contraction other than TARP for Universities.

Sun, 04/08/2012 - 15:45 | 2326511 Cathartes Aura
Cathartes Aura's picture

add to that the fact that "in state" students pay a lesser fee for their servicing, while "foreign" students pay full fare - uni-versities are just following the money, for profit institutions, funneling fiat via the student body.

Sun, 04/08/2012 - 00:32 | 2325592 veyron
veyron's picture

They are: UPenn, Caltech and a few other schools started issuing 100 year bonds.  Long enough to weather the cycle.

Sun, 04/08/2012 - 04:54 | 2325802 NewWorldOrange
NewWorldOrange's picture

Then again, higher education has never had much problem with huge classroom sizes.

Sat, 04/07/2012 - 23:41 | 2325513 Seize Mars
Seize Mars's picture

Right on. If Uncle Sham weren't pushing the financing, prices would drop, and quickly. School would be affordable and...gasp...better.

Sun, 04/08/2012 - 00:02 | 2325546 LetThemEatRand
LetThemEatRand's picture

Sure.  There are lots of for profit online universities that would love to take you money.  Great education and all you need to do is pay and say how long you were online listening to the classes.  

Sun, 04/08/2012 - 07:45 | 2325886 BidnessMan
BidnessMan's picture

Yeah, and employers like me automatically drop any resume listing these schools into the circular file that gets emptied every night .....  

Sun, 04/08/2012 - 02:16 | 2325682 Moomah
Moomah's picture

Oh, haven't you heard that college level professors are so underpaid it's a national crime? That college tuition should go up even more in order to compensate them in accordance with other industries of their elite skills and education? Not sure what industry that might be but the education gig is a pretty good one in my estimation. Summers off, short work days, teaching assistants to do all the heavy lifting, spring breaks, Christmas breaks ... sabaticals to travel and find themselves. 

Sun, 04/08/2012 - 17:14 | 2326601 The Alarmist
The Alarmist's picture

Yeah, poor profs ... In some places, like CA, they are only earning on average. in the low six-figures.

Sat, 04/07/2012 - 23:42 | 2325516 LetThemEatRand
LetThemEatRand's picture

Gee, I wonder why Bush decided to make sure that student loans cannot be wiped in Bankruptcy.

Sat, 04/07/2012 - 23:52 | 2325531 tmosley
tmosley's picture

I could have sworn that student loans became non-dischargable in the 70's.

But hey, whatever perpetuates your illusions of two seperate and distinct parties that don't have the exact same agenda, using the exact same means to reach the exact same ends.

Sat, 04/07/2012 - 23:56 | 2325538 LetThemEatRand
LetThemEatRand's picture

Both parties suck.  But Bush privatized the rule, asshole.

In order to have a student loan discharged, a debtor must show that it would be

an undue hardship to pay the loan.  Prior to 2005, the undue hardship standard applied only to

loans made or guaranteed by the federal government, but the Bankruptcy Abuse Prevention and

Consumer Protection Act of 2005 (BAPCPA) amended the law to include private loans as well.

Sun, 04/08/2012 - 00:20 | 2325568 SgtSchultz
SgtSchultz's picture

Sorry, didnt see that someone also posted the same link.

Student loans were dischargeable in bankruptcy prior to 1976. With the introduction of the US Bankruptcy Code (11 USC 101 et seq) in 1978, the ability to discharge education loans was limited. Subsequent changes in the law have further narrowed the dischargeability of education debt.

The exception to discharge for private student loans evolved over time. Prior to 1984, only private student loans made by a "nonprofit institution of higher education" were excepted from discharge. This was intended to protect the National Defense Student Loan Program (NDSL), the predecessor to the Perkins Loan Program. Those loans were made by colleges using a revolving loan fund created using matching federal contributions. The Bankruptcy Amendments and Federal Judgeship Act of 1984 made private student loans from all nonprofit lenders excepted from discharge, not just colleges, by striking the words "of higher education". The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 expanded this to include all "qualified education loans", regardless of whether a nonprofit institution was involved in making the loans.

Sun, 04/08/2012 - 04:48 | 2325797 StychoKiller
StychoKiller's picture

What's a Bankster to do?  They can't repossess yer brain (although, in most cases, it's not doing the student much good, except keeping their haid from imploding -- this is easily proven by the fact that said student pursued an unmarketable Liberal Arts degree in the first place!)

Sun, 04/08/2012 - 01:12 | 2325629 Saro
Saro's picture

Ironically, that change probably caused more private investment into student loans.

(Not that it matters whether you end up a slave to a bank or to the government.  There's not much of a difference these days anyway.)

Sun, 04/08/2012 - 06:40 | 2325844 barroter
barroter's picture

Privatize everything...sure, that's the panacea to SAVE us all.  I DON'T BELIEVE IT.

Tue, 04/10/2012 - 15:03 | 2326608 GoinFawr
GoinFawr's picture

Unbeliever! An heretic! Persecute the heathen! Don't you know that once we privatize all the libraries (those egregious copyright disdainers) you will never again have a hard time finding (for a small rental fee) a copy of that new 'bestseller' on Oprah's list? All the shelves will be full of 'em!

Sun, 04/08/2012 - 00:01 | 2325543 Jackfish
Jackfish's picture


While you are certainly correct about the sham 2 party system, the BK law was substantially revised in 1984 to close out any chance of the debt being discharged.

Student Loan Bankruptcy Exception

The US Bankruptcy Code at 11 USC 523(a)(8) provides an exception to bankruptcy discharge for education loans. This page provides a history of the legislative language in this section of the US Bankruptcy Code.

Student loans were dischargeable in bankruptcy prior to 1976. With the introduction of the US Bankruptcy Code (11 USC 101 et seq) in 1978, the ability to discharge education loans was limited. Subsequent changes in the law have further narrowed the dischargeability of education debt.

The exception to discharge for private student loans evolved over time. Prior to 1984, only private student loans made by a "nonprofit institution of higher education" were excepted from discharge. This was intended to protect the National Defense Student Loan Program (NDSL), the predecessor to the Perkins Loan Program. Those loans were made by colleges using a revolving loan fund created using matching federal contributions. The Bankruptcy Amendments and Federal Judgeship Act of 1984 made private student loans from all nonprofit lenders excepted from discharge, not just colleges, by striking the words "of higher education". The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 expanded this to include all "qualified education loans", regardless of whether a nonprofit institution was involved in making the loans.


Sun, 04/08/2012 - 00:05 | 2325551 LetThemEatRand
LetThemEatRand's picture

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 expanded this to include all "qualified education loans", regardless of whether a nonprofit institution was involved in making the loans.

There's your critical change that fucked the large majority.  Bush.  Republican Congress.  Cheney still had his own heart, such as it was.  Yes, Dems also suck.  

Sun, 04/08/2012 - 00:23 | 2325578 CaptFufflePants
CaptFufflePants's picture

Yeah and the same Republican Senate, Congress, White House, and Justice department, created the TSA.

Anyone here who is for small government, and liberty, who defends the Bush admins and the Republican leadership are complete and utter idiots.


They have subverted more liberties from 1994 to 2006 than any previous rein of power by a political majority in the history of the United States.

Sun, 04/08/2012 - 13:01 | 2326263 knightowl77
knightowl77's picture

You don't go far enough...under Obama and the Dems the Patriot Act was extended and expanded...The NDAA allows the Prez to order the military to arrest Americans and hold them indefinitely...Obama has decided that he has the power (peace prize and all) to kill Americans with drones anywhere in the world...the current FBI director "isn't sure" whether or not Obama has the power to order the killing of Americans here on our soil....The TSA are buffoons....DHS and a lot of other Feds are a real threat

Sun, 04/08/2012 - 15:50 | 2326519 Cathartes Aura
Cathartes Aura's picture

continuity of governance. . . there are no sides, but in your minds, artificially created.

just like the invisible lines drawn around "nations" which are magically removed and re-drawn whenever "they" like.

Sun, 04/08/2012 - 01:01 | 2325617 tmosley
tmosley's picture

Arbitrary bullshit, and you KNOW IT.

You know damn well that most students get FEDERAL loans which have been non-dischargable for DECADES.  Students have been totally fucked for decades.  Things have only gotten worse recently as the fed pumped more money into that bubble, and the government enabled it.

But here you are trying to play partisan bullshit.  Your blaming of Bush is like blaming Bernanke for what Greenspan did, and worse, implying that Bernanke is ANY FUCKING DIFFERENT from Greenspan.

Sun, 04/08/2012 - 06:55 | 2325851 malikai
malikai's picture

+1 - It never made any difference in the big picture. The reality is that however you look at it, this shit was set in motion in the 70s, and both the blue and red wings of the corporatism party have been playing their part.

Sun, 04/08/2012 - 09:25 | 2325987 Sean7k
Sean7k's picture

All this started the day a group of people gave one person the power to rule them with coercive force. Once the template was created, all governments have used it to give minority positions a majority of the benefits.

It matters not the construction. Blaming parties, generations, political theories or any other panoply of propaganda is useless. 

Sun, 04/08/2012 - 00:18 | 2325571 Demonoid
Demonoid's picture

Under the Bankruptcy Code passed in 1978 (along with the 1979 and 1984 modifications), student loans were made nondischargeable for at first only five years, and then seven years. After that waiting period, student loans were only excepted from discharge in Chapter Seven proceedings, not Chapter Thirteen cases. That would be Carter (and Reagan for the second mod).

In Chapter Thirteen actions, debtors were required to pay only a fraction of the principal - as little as one percent of their loans in some Chapter Thirteen cases. Such rare but glaring cases brought politicization, with calls to "stop the rampant abuse."

Congress amended the Bankruptcy Code again 1998. That would be Clinton. In this amendment, the provision limiting nondischargeability to the first seven years after a student loan becomes due was completely wiped out.  Since 1998, federal student loans can only be discharged in bankruptcy if the debtor can show that repayment of the student loans would constitute an "undue hardship" on the
debtor and his dependents.

In a further amendment in 2005, private student loans were swept into the same nondischargeable regime as federal loans. This was under Bush.

When the bubble starts a poppin', I expect a Constitutional challenge to be mounted, under the theory that nondischargeable student loans violate the 13th amendment.

Judge for yourself:

Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Involuntary servitude refers to a person held by actual force, threats of force, or threats of legal coercion in a condition of slavery – compulsory service or labor against his or her will. This also includes the condition in which people are compelled to work against their will by a "climate of fear" evoked by the use of force, the threat of force, or the threat of legal coercion (i.e., suffer legal consequences unless compliant with demands made upon them) which is sufficient to compel service against a person's will.
When the government is scaring people by garnishing their Social Security and Disability checks for something they did forty or fifty years earlier, I'd say the Constitutional standard is being met. (Yes, this is already happening.)



Sun, 04/08/2012 - 02:16 | 2325683 Dasa Slooofoot
Dasa Slooofoot's picture

Section 1. Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.



I hate the system and all, but entering into a loan agreement is NOT involuntary servitude. 

Sun, 04/08/2012 - 03:51 | 2325761 icanhasbailout
icanhasbailout's picture

Getting brainwashed and coerced into a uniquely non-dischargable "loan" that was pressed into your hands the moment you could legally ink a contract, with all efforts made to make sure you did not understand a damn thing you were signing, sure as hell IS involuntary servitude.

Coercion by fraud is no more of a legit way to form a contract than is coercion by force.

Sun, 04/08/2012 - 05:10 | 2325808 NewWorldOrange
NewWorldOrange's picture

Those who secure these loans know damn well the loan is not dischargeable. They make that patently clear when you get the loan and it's common knowledge for at least most of that demographic pursuing those loans. And even if not, if they think society has some moral obligation to discharge a private contract they entered into, then they not worthy of a loan to begin with. If you can't or won't repay it as agreed, don't agree to it so you can later push it off on the taxpayers.

Sun, 04/08/2012 - 05:34 | 2325817 icanhasbailout
icanhasbailout's picture

"Moral obligation"? That's pretty funny, given that the lenders can and do default on contractual obligations as a simple business decision, and manage to override contractual obligations in their favor, virtually at will (e.g. bailouts, MF Global, etc.) Which TBTF bank was it that defaulted on a major high rise because it had bought in at a bubble price and was looking at a massively underwater position by staying in?

There's no such thing as a "moral obligation" to an amoral institution. Change the last letter of the first word, however, and I might then agree with the premise.

Sun, 04/08/2012 - 07:44 | 2325883 mendigo
mendigo's picture

I think "you have a moral obligation" translates roughly to "here is what I want you to do". The loans are a part of their education - they think they are scamming the system but in fact the loans are inflating the cost of education and subsidizing the educational bureaucracy and banks. Much like healthcare.

Sun, 04/08/2012 - 13:06 | 2326269 knightowl77
knightowl77's picture

BS, these are the same people that think a girl can have an abortion at the age of 12 without her parent's knowledge. That she is perfectly capable of making that decision...but at 18 isn't capable of making an informed decision about a college loan????? Give me a break...You cannot have it both ways

Sun, 04/08/2012 - 10:37 | 2326069 tmosley
tmosley's picture

Right, it's slavery.

You can't say that you can't sell yourself into slavery.  That is a common phrase, and was in fact the case for most of human history.

The thing is that contracts are not the end-all-be-all of human existance.  Contracts are important, and people who don't honor contracts should be trusted less than those who do.  But that doesn't mean that you can't walk away from them.  And you certainly shouldn't have the government playing the role of loan shark collector, taking money straight out of your paycheck to pay off that debt.

Sun, 04/08/2012 - 03:38 | 2325744 Calmyourself
Calmyourself's picture

Was that anexecutive order then or actually written and passed by a fully Democratic Congress?  Bush, Bush, Bush you sound like Obango sotero or maybe his drunken Uncle..

Sat, 04/07/2012 - 23:43 | 2325517 Tom Green Swedish
Tom Green Swedish's picture

You mean all those idiots can't go to college now?

Sun, 04/08/2012 - 01:05 | 2325621 tmosley
tmosley's picture

They can go to college.  They just can't pay for it.

Don't worry.  Obama checks are in the mail.  Unlimited free education for everyone is a fundamental human right, as are loans to cover all the expenses.  Fed dollardumptrucks will take care of all of that.

Sun, 04/08/2012 - 07:58 | 2325897 Gully Foyle
Gully Foyle's picture


"I have indeed two great measures at heart, without which no republic can maintain itself in strength: 1. That of general education, to enable every man to judge for himself what will secure or endanger his freedom. 2. To divide every county into hundreds, of such size that all the children of each will be within reach of a central school in it." --Thomas Jefferson to John Tyler, 1810. ME 12:393


“The only thing more expensive than education is ignorance.”

Benjamin Franklin

Sun, 04/08/2012 - 10:42 | 2326075 tmosley
tmosley's picture

You're right.  Let's make PhDs manditory.  Once everyone is a doctor, everyone will be rich!  It's the only way to ensure our national security!  WOn't someone think of the 30 year old CHILDREN!?

Those quotes referred to PRIMARY schooling.  A bit different from college.  And they certainly weren't forcing people to go into massive debt to do it, nor were they inflating costs with federal involvement.

Sun, 04/08/2012 - 13:10 | 2326281 knightowl77
knightowl77's picture

tmosley  is right

this is about Primary education and paid for and directed by the local communities...The Feds were NEVER to be involved in education...

Sun, 04/08/2012 - 14:46 | 2326438 GeezerGeek
GeezerGeek's picture

The Feds were NEVER to be involved in education, or retirement planning - Social Security - or healthcare - Medicare and Medicaid. Or boatloads of other stuff. The Constitution is dead. Get over it.

Nowadays the Feds have the right to make you do anything they want - or at least they think they do. In fact, I recently read a quote attributed to Ruth Bader Ginsberg regarding Obamacare (it was so attributed by a letter writer in a very liberal newspaper in the county that includes Debbie Wasserman-Schultz): "It's not your free choice just to do something for yourself. What you do is going to affect others in very negative ways." If this quote is accurate - and knowing how liberals think makes me believe this is - then we are no longer free agents, but functionaries of the state.

Ginsberg may be on to something, actually. Imaging saying to someone that making bad lifestyle decisions will or may have an adverse effect on others. Can the government prohibit obesity? Smoking? Out-of-wedlock sex? Religious inclinations? Walking without a helmet? Liberals would never admit it, but they probably would love that kind of power.

Sun, 04/08/2012 - 16:00 | 2326533 Cathartes Aura
Cathartes Aura's picture

y'know, I up voted your post, you're making good points - but the "liberal" tag kind of spoils your message,

Liberals would never admit it, but they probably would love that kind of power.

this seems to imply that "conservatives" DON"T want this power too - and we know differently, don't we???

identify the culprit as "government" or something that doesn't create artificial "sides" in people's minds - because otherwise, that just plays into "their" collective hands.


Sat, 04/07/2012 - 23:46 | 2325521 lolmao500
lolmao500's picture

Damon is having enough fun as it is with the food stamps...

Sun, 04/08/2012 - 00:15 | 2325565 Unprepared
Unprepared's picture

Indeed, it is entertaining for the man sitting on a chair to watch others dancing when music has stopped.

Sat, 04/07/2012 - 23:47 | 2325524 FXPortent
FXPortent's picture

Largesse on the part of universities will soon be as absurd as strippers selling real estate.

This one will be an interesting event to watch unfold.

All those professors will not be happy at all.

Sun, 04/08/2012 - 02:05 | 2325667 UP Forester
UP Forester's picture

I guess it'll turn into "Those that can, do, and those that can't, don't have tenure anymore...."

Sun, 04/08/2012 - 05:19 | 2325811 NewWorldOrange
NewWorldOrange's picture

I suspect they'll keep the staff on and just increase classroom size. Higher ed has never had much problem doing that. The Fed will just monetize the debts, and during Obamination's next term we'll probably see Obamaed (made retroactive. Don't worry if you have a lot of student loan debt. Your bailout is coming, if for no other reason that to appease OWS or whatever offshoot/variant of that is surely coming.)

Sun, 04/08/2012 - 03:48 | 2325757 icanhasbailout
icanhasbailout's picture

Can't wait for the day some of these horrific excuses for professors end up on the unemployment line, and get to explain to the guy hiring for Arby's that in their previous job they recommended forced medication of everyone who disagrees with them.

Sun, 04/08/2012 - 05:21 | 2325813 NewWorldOrange
NewWorldOrange's picture

"and get to explain to the guy hiring for the Federal bureaucracy"

Fixed it.

Sun, 04/08/2012 - 07:45 | 2325885 Zero Debt
Zero Debt's picture

The ones who really benefit from the "Education-Industrial Complex" are the universities themselves.

Sat, 04/07/2012 - 23:48 | 2325525 phungus_mungus
Sat, 04/07/2012 - 23:49 | 2325528 libertus
libertus's picture

This is the end of higher education and we know it. Thank god I am only 5 months until my doc defense. Then I can start my own business. This fall is going to be epic. It is very interesting that now the Federal Government will be the only ones makign the loans, but still there will be a lot of money to be made servicing this debt. 

I would recommend checking out Blowing the Last Bubble. We predicted the fall and even the way it was going to happen. three years ago I had a talk with a couple of senior administrators about the need to create their own financing group to get the capital to finance their own loans...they said I was way to gloom and doom. Now they will be scrambling to get their shit in line before the loan market freezes. 

So much for all those tenured profs...they will be getting some pink slips or else teaching more kids in their classes for less pay.

Sun, 04/08/2012 - 00:17 | 2325569 MachoMan
MachoMan's picture

Wait, you mean there isn't a free lunch afterall?

This is going to cause us to question what exactly is education...  and frankly, why it is so expensive relative to experience, when the former is never a substitute for the latter...

Sat, 04/07/2012 - 23:53 | 2325533 trustee
trustee's picture

Most of the state schools in FL are running on extremely tight budgets with a good portion of them having shortfalls for the upcoming academic year. If education financing dries up, enrollment will plunge sending these schools into a tailspin. This is going to get very interesting. 

Sun, 04/08/2012 - 07:31 | 2325873 BidnessMan
BidnessMan's picture

While the state schools in Florida are having their funding from Tallahassee slashed, don't agree enrollment will plunge. Tuition is about 20% of private universities and out-of-state rates.  ( I know - my daughter graduated last year from UF, and a son currently at UCF ).  Private universities and the on-line schools like Apollo and Phoenix are exposed to plummeting enrollment, and their students will flock to inexpensive state schools.  If they can get admitted -- which they probably can't.  They would have gone to a state school if they could have gotten admitted. There is a huge pool of kids who would be glad to go to a state school if there was an open spot for them. 

That said, these schools are hugely overloaded with administration like all the others.  Way overdue for a big scale-back in overhead, which is happening. My guess is 50% of the admin positions could disappear tomorrow and 1) no one would notice; and 2) the quality of education would go up.     

Sat, 04/07/2012 - 23:53 | 2325534 Dre4dwolf
Dre4dwolf's picture

The govt thought by handing out free money , more people would go to school.

All they did was raise the cost of tuition so that its impossible to go to school without taking on huge debt.


Good Job Govt, now why dont you and Obama go suck a donkey @#%@

Sat, 04/07/2012 - 23:54 | 2325535 Xibalba
Xibalba's picture

Everyone needs a degree like everyone needs a 4bedroom house.  Learn something instead of reading about it...and *hint* you don't learn it unless you do it.  University of Phoenix is more likely to get you run off than hired...but then you'll learn that lesson when it's time.   

Sun, 04/08/2012 - 00:31 | 2325591 dolph9
dolph9's picture

Except if you're black, and then if you managed to stay 4 years at a podunk college in the South with a C average as a sociology major, you have your pick of affirmative jobs at the corporations and federal government, where they need token hires to fend off the NAACP and Jewish lawyers.

Sun, 04/08/2012 - 14:52 | 2326443 GeezerGeek
GeezerGeek's picture

We know Obana did not go to "a podunk college in the South". Unfortunately, we have no idea what his GPA was.

Sun, 04/08/2012 - 08:03 | 2325901 Gully Foyle
Gully Foyle's picture


Except many employers respect the fact that distance at home learners can actually thrive on their own without the motivation of a structured classroom environment.

In other words, those learners have the substance to educate themselves despite working full time and lacking the support social network offered by a college.

Now, I think you should shut the fuck up because you insulted a group of people you should have been applauding.

Sun, 04/08/2012 - 10:30 | 2326057 Stax Edwards
Stax Edwards's picture


We are sorry to hear about your online purchase of a wothless education.  Your comment that 99.7% of the posters here are idiots makes a whole lot of sense now.  Sorry about your luck.  

BTW, why spend so much time debating a group that is virtually all mentally inferior to yourself?  This speaks volumes about you sir.  Thanks for playing.

Sun, 04/08/2012 - 14:59 | 2326448 GeezerGeek
GeezerGeek's picture

Maybe GF is looking up the ladder and thinking he's looking down.

As for the "social support network offered by a college": do you think he was referring to drinking buddies? I personally had not just a social support network but also an academic support network, all within a group of 40 fraternity brothers. The latter was, ultimately, much more useful.

Sat, 04/07/2012 - 23:55 | 2325536 Triple A
Triple A's picture

pop goes the weasel

Sat, 04/07/2012 - 23:59 | 2325539 wee-weed up
wee-weed up's picture

Many of the young'uns who drank the Kool-aid in 2008 are now much wiser about the lies of this corrupt Admin.

Amazing how no jobs and high debt will give one a severe bitch-slap of reality up side the head.

Sun, 04/08/2012 - 02:20 | 2325685 RECISION
RECISION's picture

Yes, that No-Jobs is a killer.

So, if the Banks don't want to finance students anymore - is that their way of telling us there is No-Future either?

Sun, 04/08/2012 - 00:01 | 2325544 BooMushroom
BooMushroom's picture

First one to defect wins, right? Prisoner's Dilemna, Bitches!

Sun, 04/08/2012 - 00:03 | 2325547 Mr. Lucky
Mr. Lucky's picture

I met a 23 year old man the other day.  He had told me that he graduated as a double poltical science major and was 30K in debt.  I met him on a job site where he was replacing windows and fixing wood rot.  Good thing he has a marketable skill.

Sun, 04/08/2012 - 00:24 | 2325579 Unprepared
Unprepared's picture

I heard windows 8 was totally different ... oh, you mean actual windows. At least the broken window argument has a tangible application for someone.

Sun, 04/08/2012 - 15:02 | 2326456 GeezerGeek
GeezerGeek's picture

I used to do Windows, from verison 1.0 onward. Also did DOS, OS/2 and Unix, until my most recent employer ended my job and forced me into retirement. (Excellent timing for me, as I was just shy of 65 when the job ended.) Now I do windows only when my wife tells me.

Sun, 04/08/2012 - 08:05 | 2325904 Gully Foyle
Gully Foyle's picture

Mr. Lucky

Or he refused to move to where he could actually be employed.

Maybe he is just a lazy fuck who would rather live in the parents basement and party with his buds.

You took a small section of your experience with him and extrapolated out to the rest of the world.

You made false assumptions and now you choose to continue the practice.

Sun, 04/08/2012 - 09:38 | 2325997 Mr. Lucky
Mr. Lucky's picture

He also complained that he was not able to find a job in his chosen field because all "the 50 year olds would not retire."  He also elaborated that if he went on to get a Masters and go deeper in to debt he could get a job teaching political science in a college.  So not only did he graduate with an over priced usless degree; he has a poisoned mind as well.  I apologize for not telling the whole story.

I may or may not respond.  I have a productive life out side of Zerohedge.

Sun, 04/08/2012 - 00:06 | 2325552 scatterbrains
scatterbrains's picture

I noticed a shit ton of "get your degree"  postings on craigslist recently.. it seems the crooks have fully infiltrated the "get your degree at home" market and are turning over every stone looking for idiots to fleece

Sun, 04/08/2012 - 07:53 | 2325891 Zero Debt
Zero Debt's picture

It's not just the Fed pimping their paper assets

Sun, 04/08/2012 - 00:08 | 2325555 ugmug
ugmug's picture

Another example of 'unionized tenure' turning into another GM money does grow on trees especially the wood pulp of a student loan contract.


Sun, 04/08/2012 - 00:32 | 2325593 LetThemEatRand
LetThemEatRand's picture

Really?  Unions are to blame?  Douche.

Sun, 04/08/2012 - 03:54 | 2325763 Calmyourself
Calmyourself's picture

Funny, the shop you own is not unionized..  Do it tomorrow have a nice organizing vote and do it.. 

Sun, 04/08/2012 - 00:11 | 2325559 the 300000000th...
the 300000000th percent's picture

It has to end eventually, better now than later. That seems to be the theme with these manipulated business cycles as well, its time to take our lumps. Its been an over inflated lie for a while now that EVERYBODY at the age of 18 should be forced into college even though most of them just wanna smoke pot and live in mom's basement. For a while we enjoyed a real need for more educated people to fill white collar positions rapidly growing in this country, but I think that window closed a long time ago. Now we just sell the lie and we crank out herds of youngsters every year with no office building for them to go work in. Greenspan traded the dot com bust for the housing boom so we were able to "skip" a few downsides of a few business cycles, but now it has all caught up with us. None of this scares me as much as the impending Muni default Tsunami waiting to come ashore. Ahoy!!!

Sun, 04/08/2012 - 00:11 | 2325560 ShortTheUS
ShortTheUS's picture

I've learned more about economics from reading the 'Hedge than any class ever could teach me.

Sun, 04/08/2012 - 02:08 | 2325671 UP Forester
UP Forester's picture

No shit.  The two things I learned in Econ101 were:


1) Common sense doesn't work well in Econ101

2) "D" is for Done

Sun, 04/08/2012 - 16:10 | 2326543 Cathartes Aura
Cathartes Aura's picture

this is truth for me as well ShortTheUS, thankfully, as "taking a class" would no doubt leave my mind and pocket that much emptier. . .

Sun, 04/08/2012 - 00:16 | 2325567 lolmaster
lolmaster's picture

It's not a true bubble until dumb euroasians are buying synthetic CDO cubeds

Sun, 04/08/2012 - 00:28 | 2325589 Unprepared
Unprepared's picture

Most have US-graduates in their management teams and boards.

Sun, 04/08/2012 - 02:39 | 2325699 Donnie Duvanie
Donnie Duvanie's picture

And it causes a donimo-like collapse of an entire set of nations.

Sun, 04/08/2012 - 00:17 | 2325570 X.inf.capt
X.inf.capt's picture

popped the bubble, huh...

which means they were able to get out before the floor started falling in...or made the floor fall in...

just another way to extract wealth from the pensions, 401k's, and the small investors...

i really dont like these people...

Sun, 04/08/2012 - 00:19 | 2325574 thc0655
thc0655's picture

Alright, already! Nuff said.  How does an amateur like me short this whole disaster?

Sun, 04/08/2012 - 00:19 | 2325575 williambanzai7
williambanzai7's picture

Instead of providing publicly financed education we hook our younger generations with nondischargeable loans so fat cat PhDs can collect ever increasing salaries.

Fuck them!

Sun, 04/08/2012 - 00:27 | 2325585 dolph9
dolph9's picture

You've got your head in the sand if you think PhDs are the problem.

It's the banks and their footsoldiers, the business administrators.

Sun, 04/08/2012 - 00:53 | 2325610 gaoptimize
gaoptimize's picture

Academic vanity has destroyed NASA and almost every other thought-intensive Government subsidized enterprise in the USA.  Absolutely NO CONSIDERATION OF ROI.  Vainly publishing for colleagues and kissing ass for tenure.  Encouraging mindless undergrads to pursue worthless degrees and building up an outrageously expensive cost structure around providing them.  Academia should be ashamed of itself.  PhD = Piled higher & Deeper

Sun, 04/08/2012 - 06:43 | 2325846 barroter
barroter's picture

Am quite sure the Banksters are very happy with kids paying through the nose for their loans. 

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