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The First Crack: $270 Billion In Student Loans Are At Least 30 Days Delinquent

Tyler Durden's picture





 

Back in late 2006 and early 2007 a few (soon to be very rich) people were warning anyone who cared to listen, about what cracks in the subprime facade meant for the housing sector and the credit bubble in general. They were largely ignored as none other than the Fed chairman promised that all is fine (see here). A few months later New Century collapsed and the rest is history: tens of trillions later we are still picking up the pieces and housing continues to collapse. Yet one bubble which the Federal Government managed to blow in the meantime to staggering proportions in virtually no time, for no other reason than to give the impression of consumer releveraging, was the student debt bubble, which at last check just surpassed $1 trillion, and is growing at $40-50 billion each month. However, just like subprime, the first cracks have now appeared. In a report set to convince borrowers that Student Loan ABS are still safe - of course they are - they are backed by all taxpayers after all in the form of the Family Federal Education Program - Fitch discloses something rather troubling, namely that of the $1 trillion + in student debt outstanding, "as many as 27% of all student loan borrowers are more than 30 days past due." In other words at least $270 billion in student loans are no longer current (extrapolating the delinquency rate into the total loans outstanding). That this is happening with interest rates at record lows is quite stunning and a loud wake up call that it is not rates that determine affordability and sustainability: it is general economic conditions, deplorable as they may be, which have made the popping of the student loan bubble inevitable. It also means that if the rise in interest rate continues, then the student loan bubble will pop that much faster, and bring another $1 trillion in unintended consequences on the shoulders of the US taxpayer who once again will be left footing the bill.

From Fitch:

Fitch believes most student loan asset-backed securities (ABS) transactions remain well protected due to the government guarantee on Family Federal Education Program (FFELP) loans. The Federal Reserve Bank of New York recently reported that as many as 27% of all student loan borrowers are more than 30 days past due. Recent estimates mark outstanding student loans at $900 billion- $1 trillion. Fitch believes that the recent increase in past-due and defaulted student loans presents a risk to investors in private student loan ABS, but not those in ABS trusts backed by FFELP loans.

Why is the bubble starting to pop now?

Several macroeconomic factors are putting pressure on student loan borrowers. The main ones are unemployment and underemployment. The Bureau of Labor Statistics estimates the current unemployment rate for people 20 to 24 years old at nearly 14% and for those 25 to 34 years old, 8.7%. Underemployment is difficult to measure for these demographics, but it is likely having a negative impact.

Actually, no: the unemployment for 18-24 year olds is 46%. Yup: 46%.

A month ago, Zero Hedge readers were stunned to learn that unemployment among Europe's young adults has exploded as a result of the European financial crisis, and peaking anywhere between 46% in the case of Greece all they way to 51% for Spain. Which makes us wonder what the reaction will be to the discovery that when it comes to young adults 18-24) in the US, the employment rate is just barely above half, or 54%, which just happens to be the lowest in 64 years, and 7% worse than when Obama took office promising a whole lot of change 3 years ago.

 

And while technically this means 46% are unemployed, or the same percentage as in Greece, the US ratio, which comes from Pew, shows the ratio as a % of the total population: a very sensitive topic now that every month we see another 250,000 drop off mysteriously from the total labor force. However, unlike those on the trailing age end, young adults by definition are the labor force in their age group demographic, so it would be difficult to explain away this horrendous number by claiming that ever more 24 year olds are retiring. Although, yes, we agree that some may be dropping out of the labor force in order to go to college, incidentally the locus of the latest credit bubble, where they meet a fate worse even than secular unemployment: they become debt slaves of the Federal System, with non-dischargable debt at that, which even assuming they can get a job would take ages to pay back!

 

But wait: there's more - of all age groups, this is the one that has actually seen its wages drop the most under the Obama administration.

 

So not only are they unemployed, young adults are at least poor.

 

Net result: double the change, zero the hope.

But fear not dear banks: taxpayers got your back, as usual.

However, we believe that ABS trusts backed by FFELP loans are unlikely to be affected by employment trends, as they are at least 97% backed by the federal government. In addition, recent securitizations have been structured more robustly and many have backup servicing agreements.

Even so, Fich is covering its bases nonetheless:

While FFELP loans are largely protected from these trends, private student loan ABS trusts, especially those that were structured aggressively and with less stringent credit standards before the recession, are expected to continue experiencing high defaults and ratings pressure. Fitch will continue to monitor these political and macroeconomic factors as they evolve and will determine any impact they may have on ABS trusts.

And as a courtesy reminder to our young up and coming "thinkers", this is $270 billion in debt that can not be discharged. Go ahead - file for bankruptcy - see what happens.

The question then is - what is the student loan version of the ABX trade. After all if Bernanke is willing to blow another bubble, someone has to be able to profit when this latest soon to be failed attempt at central planning.

Finally, here are some more perspectives on the student loan bubble direct from the New York Fed's blog.

StudentLoans1

StudentLoans2

    The average outstanding student loan balance per borrower is $23,300. Again, there is substantial heterogeneity in balances of individual borrowers. The median balance of $12,800 is roughly half the average level, which indicates that a small fraction of people have balances significantly higher than the median. About one-quarter of borrowers owe more than $28,000; about 10 percent of borrowers owe more than $54,000. The proportion of borrowers who owe more than $100,000 is 3.1 percent, and 0.45 percent of borrowers, or 167,000 people, owe more than $200,000. The distribution also varies by age group: for example, borrowers between the ages of thirty and thirty-nine have the highest average outstanding student loan balance, at $28,500, followed by borrowers between the ages of forty and forty-nine, whose average outstanding balance is $26,000 (see chart below).

StudentLoans3

    How much difficulty are borrowers having paying back their debts? Of the 37 million borrowers who have outstanding student loan balances as of third-quarter 2011, 14.4 percent, or about 5.4 million borrowers, have at least one past due student loan account. Together, these past due balances sum to $85 billion, or roughly 10 percent of the total outstanding student loan balance. To put this in perspective, the same 10 percent rate applies on average to other types of household delinquent debt, including mortgages, credit cards, and auto loans. Does this mean that the prospects for student loan delinquencies are similar to those for the household debt in general, and thus no special attention is warranted? (See chart below.)

StudentLoans4

    Unfortunately, this is not the case—some special accounting used for student loans, not applicable to other types of consumer debt, makes it likely that the delinquency rates for student loans are understated. In the case of federally backed loans, which represent a majority of total lending, repayment is deferred until the student graduates from school and can then be pushed back by another six-month grace period. How do these student loans in deferment or grace periods show up on credit reports and contribute to the delinquency statistics? Given that no payment is necessary until graduation, these deferred student loans are not included in the past due balance but they are included in the total balance from which the delinquency rate is derived. This may help explain the low proportion (12.6 percent) of borrowers with past due student loans among those under thirty years old, compared with 16.9 percent among those between the ages of thirty and thirty-nine, since many of the younger borrowers are still in school and don’t yet have to make any payments.

    To address this potential bias in calculating delinquency statistics, we exclude individuals who appear to be temporarily exempt from making payments because they are in school or newly graduated from school. These are students who, as of third-quarter 2011, owed as much as or more than they did in the previous quarter while maintaining a zero past due balance. We will be able to make our inference more precise when loan-level panel data are available, but this is our first-cut analysis given the available data. We warn that there is room for misclassification in this analysis. For example, there could be borrowers who are subject to the income-based repayment plan whose payment fell short of the accrued interest, resulting in a balance that increased. Recall that this exercise looks at the student loan borrowers who have a balance as of third-quarter 2011; therefore, those who had taken out a loan at one point but paid it off before third-quarter 2011 are not accounted for.

    From this exercise, we find that as many as 47 percent of student loan borrowers appear to be in deferral or forbearance periods, and thus did not have to make payments as of third-quarter 2011. Specifically, 17.6 percent of borrowers had exactly the same balance in the third quarter as in the second quarter of this year, and 29.1 percent increased their overall student loan balance by taking on new originations or accruing interest to the balance.

    We then recalculate the proportion of borrowers with a past due balance excluding this group of borrowers. We find that 27 percent of the borrowers have past due balances, while the adjusted proportion of outstanding student loan balances that is delinquent is 21 percent—much higher than the unadjusted rates of 14.4 percent and 10 percent, respectively (see charts below).

StudentLoans5

StudentLoans6

    In sum, student loan debt is not just a concern for the young. Parents and the federal government shoulder a substantial part of the postsecondary education bill. Moreover, the student loan delinquency picture is not fully captured in the broad statistics since a significant proportion of borrowers and balances are not yet in the repayment cycle. The implications of this last fact for future changes in the student loan delinquency rate are a very important area of research.

    Given that student loans are an indispensable tool for educational advancement, this form of debt will remain a critical policy focus for generations to come. Going forward, we will continue to monitor the student loan market with new data each quarter, and we will try to provide useful information on the landscape of student debt.

 


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Sun, 03/25/2012 - 20:52 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Ima anal sphincter said:

Well......I guess sense you're not going to get shit, you might as well learn some skills. Do you know how to grow food? Can you fix a car? How about plumbing? Build ANYTHING? Gut a deer?....................Guess not.

+++ a lot

I never gutted a deer, but I can grow food in raised beds that I built, do basic auto repair, fix other things, do basic plumbing, do electrical work (unlicensed, but fuck it, it's my house), dig trenches by hand with a shovel, do basic stonemasonry, reload ammunition, and build things that I'm too cheap to buy.

I must admit that I'm not very good at video games. If I run out of projects, maybe I'll have time to hook up the Super Nintendo 16-bit console and finish up where I left off with Final Fantasy III.

My company stole my retirement. My government stole my future S.S. My paycheck is robbed before I get it and after when I go to the store.

Understood. At least you have the perspective to understand just how severely those fucking fuckers are fucked.

I'm planning on taking care of my own.

Same here.

I hope you have someone to "take care" of you.

If your only "skills" are in public relations, political science, sales, marketing, or financial fuckery, you have a grim future.

If you're in marketing, you really should just kill yourself now:

http://www.youtube.com/watch?v=mCUOEoPucJ8

 

Sun, 03/25/2012 - 21:45 | Link to Comment Ima anal sphincter
Ima anal sphincter's picture

unlicensed, but fuck it, it's my house

Thanks for the response. Technically it's your house, but under our current system it will never be truly yours. Don't wana pay your taxes.....kiss it goodbye.

I wanted to replace a couple doors. I had to get a city PERMIT to do it. What did that permit cost me??? More than $100. FOR WHAT?

I built a shed, replaced my C/B box, and put in a gas stove.....I didn't get approval for any of it and won't for any repairs in the future. As far as I'm concerned "My Government can stick it, because it ain't my government anymore.

I sure wish everyone would "just say no" to taxes, as has been screamed on this site before. If we all did it at the same time....the ponzi DIES.

Mon, 03/26/2012 - 01:40 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Ima anal sphincter said:

I wanted to replace a couple doors. I had to get a city PERMIT to do it. What did that permit cost me??? More than $100. FOR WHAT?

I built a shed, replaced my C/B box, and put in a gas stove.....I didn't get approval for any of it and won't for any repairs in the future. As far as I'm concerned "My Government can stick it, because it ain't my government anymore.

Good for you. My ditchdigging involved running electric to the garage (75 feet from the house). I didn't rent a trencher because I'm too cheap. It wouldn't have helped anyway because the soil here is glacial till with a lot of clay and some big ass boulders were right in the path. I just had to break out the spud bar and either pry them up or bust off chunks.

With all that going on, I accidentally forgot to get a building permit or have it inspected by an electrician. Oops. I did it all to the latest NEC specs, though, and even over-engineered it a little, with a new subpanel in the garage and a few other things. It's probably safer than the wiring in most of the bubble-era houses.

Maybe I'll get around to getting a permit and having it inspected someday. By then, the national debt might be paid off too.

 

Sun, 03/25/2012 - 22:12 | Link to Comment Cathartes Aura
Cathartes Aura's picture

loving the exchange, up votes for you both!

we've all been herded towards "specialising" in something, supposedly to be paid more than others, but really all it's done is create mutual dependencies between humans - you do my plumbing, I'll do your electrics, and he can fix my car - passing the monies around and around, so that the monies can be taxed over and over and over. . .

when I come across multi-taskers such as yourselves, I smile - because you're not programmed to seek out someone else to "assist" you - this is not to say that adding other skilled folks to your network isn't well worth the effort made, just that we can all use some self-reliance upgrades. . . and then maybe go out and. . . (ohmygawd). . . share.

Sun, 03/25/2012 - 22:38 | Link to Comment Ima anal sphincter
Ima anal sphincter's picture

Road Kill Man ( meant in a good way),

During our last hurricane, Ike. We were without power for 8 days. I was ready, I have a big-ass generator that I modified for tri-fuel operations. Right from the get-go, I tied into my gas meter and had an unending supply of power.  Do you know what I did with some of that? Strung extension cords to two neighbors. The look on their faces was unforgettable when I showed up with that cord.

I try to fix things myself because it saves me some of my precious money. Many things are outa my skill level and I'll bring in somebody to knock those out. The kids are learning, but (just like me) it takes a forced situation that MUST to be corrected to hone your skills.

I think most Americans are going to be forced to learn some of this stuff pretty dang quick, whether they like it or not.

Mon, 03/26/2012 - 00:17 | Link to Comment Cathartes Aura
Cathartes Aura's picture

yeah, it's not easy to watch many people struggle with just learning the basics in their own care 'n' maintenance - so many are used to whipping out the plastic whenever a hiccup presents itself, rather than work their way into and out of a situation.

and I empathise, because those who are "employed" are a constant juggling act, their "free" time is precious, and it's easier to pay to "fix" whatever is annoying them - but it's a form of training that won't serve them in the long run, enforced helplessness.

kudos to you for utilising the utilities - creative adaptation is the main skill going forward, IMHO - and I'll just add, true leaders aren't self-appointed, they're the types who step up, git 'er done, and attract the following. . .your neighbours know you.

peace.

Mon, 03/26/2012 - 08:14 | Link to Comment johnnynaps
johnnynaps's picture

Funny. I have a unique knowledge of how to grow certain crops indoors and out. I have become a lot more handy in my 30's here using the internet for relatively simple car repairs. Oddly, my new career is one that has been around for thousands of years, I can effortlessly do in my "retirement years" and won't be offshored. And because I was able to see that this corrupt system was doomed to fail 10 years ago I have certain assets that might make people want to take care of me. You sound disgruntled and obviously were blind to the ponzi if you are complaining about lost ponzi fiatsos.

Sun, 03/25/2012 - 17:56 | Link to Comment Kali
Kali's picture

California used to have free state college for residents before Reagan became guv not.  Students used to get grants based on need and scholastic achievement until Reagan became presidunce, he's the one that changed grants to loans. A lot of boomers never paid anything for their education.  Tuition used to be affordable working part-time or summer jobs.  I don't see where the under 30 want anything different.

Oh and I forgot, many employers used to offer tuition reimbursement if you studied something that was relevant to your job.  That kinda bit the dust when Reagan made tuition reimbursement taxable income.  He was also the one that phased out Social Security payments to children whose parent(s) died while they were in college.

Sun, 03/25/2012 - 18:22 | Link to Comment JLee2027
JLee2027's picture

Not Reagan. Student Loans began in 1965 under a Democrat. Guess who.

Sun, 03/25/2012 - 18:33 | Link to Comment Kali
Kali's picture

Wrong.  I lived it while working my way through college, I remember. Student loans may have started in 1965, but grants were phased out totally by Reagan.   Reagan was the most anti-education president ever.  . 

Sun, 03/25/2012 - 19:06 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Reagan was the most anti-education president ever.

Not exactly. Carter was the most anti-education president ever. He's the one that established the Department of Education.

Reagan was the most pro-loan president ever. He beat Carter by criticizing Carter's tax and spend philosophy. When Reagan took office, he implemented a borrow and spend philosophy, which is responsible for the wealth and prosperity we enjoy today.

 

Sun, 03/25/2012 - 19:36 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Fourth Stooge for President.

Sun, 03/25/2012 - 20:17 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

.

Fourth Stooge for President.

Only if I get to drive the tractor on the dope farm.

 

Sun, 03/25/2012 - 22:19 | Link to Comment Cathartes Aura
Cathartes Aura's picture

4thStooge-ing,

Reagan was the most pro-loan president ever. He beat Carter by criticizing Carter's tax and spend philosophy. When Reagan took office, he implemented a borrow and spend philosophy, which is responsible for the wealth and prosperity we enjoy today.

I see what you did there.  and agree.

here's to you getting that tractor.

Sun, 03/25/2012 - 19:12 | Link to Comment Acorn10012
Acorn10012's picture

Ever hear of a Pell grant?

Sun, 03/25/2012 - 19:55 | Link to Comment Kali
Kali's picture

OK, 4th stooge, will give you that.  Pell grants are almost impossible to get unless you are totally piss poor, forget it if you have a job and they don't give you much.  It was a different time back then.  For those of us who worked our way through college, avoiding loans, Reagan was a disaster.  But, back then, only good students were accepted into college or qualified for assistance.   I had to "earn" my grants/scholarships with excellent grades and work to earn tuition reimbursements/summer/part-time wages.  Kids today don't stand a chance of that.  It was difficult back then too.  Inflation was MUCH higher, but I will say, jobs were still pretty easy to get.  So, if you had good grades and were willing to work it was possible to get a college degree and keep the debt to a minimum.  I was only forced to get student loans when I transferred from cheap community colleges to a private engineering school to finish my BS.  By then, most grants/scholarships were very hard to get if you had any income and tuition was too expensive to finance with a part time or summer job.  I had to work a full time 3rd shift chemist job my last year of engineering school.  I know very few people nowadays that have the work ethic to attend school full time and work full time too.

Sun, 03/25/2012 - 22:27 | Link to Comment Cathartes Aura
Cathartes Aura's picture

good points made Kali.

anyone who doubts this turning of education into a costly escalator to nowhere need look no further than Britain, who has only recently turned to high-priced tuitions funded by student debt, from a grant-funded model based on effort and grades.

their education standards have also tumbled while the costs skyrocket - along with any notion of "work ethic" - familiar, eh.

Mon, 03/26/2012 - 00:05 | Link to Comment geekgrrl
geekgrrl's picture

Your experience was very similar to mine. First two years at community college, and received my BS from a private engineering uni shortly after Reagan departed the presidency. I actually qualified for Pell grants, but I didn't receive the full amount. I think it was less than half the maximum. I also won several scholarships, one based on merit, and another from the company where my mother worked at the time (a small defense firm sucking on the public tit).

The one difference is that I had the luxury of not having to work during school, although I did summer jobs every year and did an internship as part of my studies. I ended-up finishing the BS with something like $16k (at 11%) in debt, and I felt fortunate at the time to be finishing because tuition had jumped from a little over $4k to $10.5k in the three years it took to complete the degree. Then I took a decent job at a company that offered tuition reimbursement, and used it to get my masters. That was a great deal, much better than the 401k's that started to replace traditional pensions. 

Anyway, it's not like I got an improvement in my education with the jacking of the tuition, so it was pretty obvious at the time that student loan lending ---> massive inflation in tuition. It's almost a postulate, or a lemma, or some sort of fundamental truth that is beyond examination by mainstream media.

Sun, 03/25/2012 - 15:51 | Link to Comment SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

Anyone, how can i short the coming student loan bubbles? should i look to short call options/ long puts on privte student financing companies? long puts on for profit unis?

Sun, 03/25/2012 - 15:58 | Link to Comment Conman
Conman's picture

Short appl, the favorite company of overly burdened indebted students.

Sun, 03/25/2012 - 16:01 | Link to Comment SheepleLOVEched...
SheepleLOVEcheddarbaybiscuits's picture

wait you mean people wll stop buying $2000 facebook machines?

Sun, 03/25/2012 - 16:05 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Don't insult the trendy Mac buyers who spent 3000 dollars to go on facebook. Its wrong.

Sun, 03/25/2012 - 16:14 | Link to Comment JenkinsLane
JenkinsLane's picture

Good luck with that.

Sun, 03/25/2012 - 15:57 | Link to Comment Catullus
Catullus's picture

When a quarter of the loan market is not performing, thhe market should not clear. There's no way around this.  There's no level of interest the bank to charge to make this loan profitable.  AND most of them are Prime + on the interest rate in the lowest interest rate environment possible.

 

Sun, 03/25/2012 - 16:00 | Link to Comment Monedas
Monedas's picture

All education to the internet !  Turn the brick and mortar campuses into FEMA camps for those who can't make it in the free market ! A student loan of $1000 dollars would cover your internet education for a doctorate !  Public education should go the way of Blockbuster ! We don't need it ! Bad example !  I have more respect for Blockbuster than ALL public education !

Sun, 03/25/2012 - 16:15 | Link to Comment jse111
jse111's picture

Great idea! Kind of a reverse Socratic learning experience with tremendous interpersonal attention and constant interactive learning disassociation as a bonus.

Hey, the price as stated is wonderfully attractive and everyone knows that the axiom regarding one getting what one pays for to be ridiculous hyperbole. Regarding my personal student loan that I used to buy new wheels and voluminous quantities of high quality smoking dope, the money was well spent.

(sarc) 

 

Sun, 03/25/2012 - 16:43 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Good Idea.  Obamas Education Czar should axe a few underperforming universities like the Car Czar scrapped Pontiac, and Saturn.

Sun, 03/25/2012 - 15:58 | Link to Comment Seasmoke
Seasmoke's picture

snap, crackle, pop

Sun, 03/25/2012 - 15:58 | Link to Comment Red Heeler
Red Heeler's picture

Graffiti spotted in subway restroom:

Don't be like me, I were a high school dropout.

Not me, I goed to college.

Sun, 03/25/2012 - 16:03 | Link to Comment Banksters
Banksters's picture

Trav is pissed his 4 year degree in  erotic self message hasn't paid off.    

Sun, 03/25/2012 - 16:19 | Link to Comment WoodMizer
WoodMizer's picture

Erotic self Message:

I am so hot for me right now, I got a boner the size of Forida while shaving this morning.

Sun, 03/25/2012 - 17:47 | Link to Comment SoCalBusted
SoCalBusted's picture

Watch where you are shaving!

Sun, 03/25/2012 - 19:55 | Link to Comment francis_sawyer
francis_sawyer's picture

Was the graffiti next to the glory hole?

Sun, 03/25/2012 - 16:00 | Link to Comment bugs_
bugs_'s picture

students are expected to learn.  it looks like some have begun to.

it would have been better to NOT turn to Pharaoh to fund your "education", its a pity that more didn't learn that in high school.

Sun, 03/25/2012 - 16:05 | Link to Comment WoodMizer
WoodMizer's picture

Rarely is the question asked; is our children going to pay.

Sun, 03/25/2012 - 16:03 | Link to Comment WoodMizer
WoodMizer's picture

The Occupation of Wall Street is going to become a career.

Debt sefrdom wins, peons fail.

Sun, 03/25/2012 - 16:22 | Link to Comment Belarusian Bull
Belarusian Bull's picture

That's all peons do - fail. They wouldn't be peons otherwise...

Sun, 03/25/2012 - 16:11 | Link to Comment bayoutrader
bayoutrader's picture

Goldman Sachs will be selling both sides of the ABX trade but will invest in the winning side of the trade for it's own account, to be sure!

By the way, with all of the unemployed young people who is going to pay for my Medicare and Social Security? Does this mean that I must work until death? I guess so. But wait, because I'm successful my taxes are going up too. This is beginning to get depressing. Why didn't I marry for money instead of for love like all of my "happy" friends?

Sun, 03/25/2012 - 22:34 | Link to Comment Cathartes Aura
Cathartes Aura's picture

most people marry to fit in, peer pressure, family pressure, etc.  some do for money, true.

 

what ever happened to just being with a person whose company you enjoy, until you don't?

Sun, 03/25/2012 - 16:04 | Link to Comment dwdollar
dwdollar's picture

I've paid off 4 student loans recently from 4 different lenders and not 1 has sent a pay-off confirmation yet. If they think they can pull some shenanigans later down the road and claim I haven't paid some bankers are going to die. That's a promise. The NSA can log this message.

Sun, 03/25/2012 - 16:17 | Link to Comment JenkinsLane
JenkinsLane's picture

Might I suggest you send them follow up letters instead asking for written confirmation?

It's always best to check whether doors are unlocked before kicking them down.

Sun, 03/25/2012 - 16:22 | Link to Comment Seasmoke
Seasmoke's picture

here is hoping for some shenigans then

Sun, 03/25/2012 - 18:24 | Link to Comment JLee2027
JLee2027's picture

Being free from debt slavery is not what they want. 

I've paid off 4 student loans recently from 4 different lenders and not 1 has sent a pay-off confirmation yet

Sun, 03/25/2012 - 19:34 | Link to Comment Marc_W
Marc_W's picture

Whoa there son, apparently you don't know what the situation is.  DHS has declared banks to be "critical infrastructure."  And you just made a terroristic threat against the bankers.  Undoubtedly a Situational Awareness Report (SAR) will be sent from the central intelligence analysis center to your local Law Enforcement Fusion Center whereupon your telecommunications will be tapped, data mined, and profiled for the next few months to make sure you aren't up to something.

 

And check under your car for GPS trackers.

Sun, 03/25/2012 - 16:15 | Link to Comment praxis
praxis's picture

IN addition to the high unemployment rate of young people its also the fact that gas prices are rising and have been jacked up for months.  The rising price of petrol is draining everyones pockets.  No onw expecta another crash but how can the "recovery" continue when everyones bottom line is being sucked dry?  And please god before the crash can you allow the miners and the HUI to run so we can get out and stock up on physical... 

I really think its important for the TOTUS to start railing against the evil oil speculators for ruining our recovery.  OR how bout this one: wow the recovery must be solid...since things are so much better the demand for gas is increasing and that's why prices are rising... 

Sun, 03/25/2012 - 16:15 | Link to Comment Dedwards
Dedwards's picture

The most important numbers in the trust remits is not the 30-day delinquency numbers, but rather the 210-day delinquency and the history of forbearance rates!  these are the drivers of default, not so much the 30 day

Sun, 03/25/2012 - 19:59 | Link to Comment francis_sawyer
francis_sawyer's picture

Well... there's 219 days left until the 2012 election...

So by that measure, if nobody pays until then, then Obama can just forgive all the loans & win himself another 4 years...

See how easy politics is?

 

Sun, 03/25/2012 - 16:19 | Link to Comment AU5K
AU5K's picture

Obama, 2013: 

As part of my "Making Student Loans Affordable" proposal, former students now in the workforce who are burdened with a higher payment than they can reasonably afford can write off a portion of the debt to an amount they can afford. 

Our education department is here to help with credits, funded by taxpayers in the upper income brackets, to pay down the loan. 

No longer will students have to suffer at the hands of predatory lenders years after college.

Sun, 03/25/2012 - 16:20 | Link to Comment Seasmoke
Seasmoke's picture

become a public employee, 4 years quicker to defined benefits and pension paid by taxpayers

Sun, 03/25/2012 - 17:47 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Bad idea. Much better off being a farmer or mechanic. Most public employees are about to get canned when the US defaults and everyone that has future promises to be payed in dollars will be sorely disappointed.

Sun, 03/25/2012 - 19:36 | Link to Comment Marc_W
Marc_W's picture

Other than being a member of the parasite bankster class the only jobs worth having in the U.S. are indeed government jobs.  Easy work, no stress, "bankers hours", extremely high pay, awesome benefits, long vacations, and a pension!

 

White males need not apply.

Sun, 03/25/2012 - 22:40 | Link to Comment Cathartes Aura
Cathartes Aura's picture

I gave you a down vote based on this:

White males need not apply.

plus some pretty annoying whining about everyone else but your fave meme - yourself - in recent posts over the past week or so. . .

are you saying that "white males" are not employed by government?  really????

Sun, 03/25/2012 - 16:23 | Link to Comment sessinpo
sessinpo's picture

From Article

"The question then is - what is the student loan version of the ABX trade. After all if Bernanke is willing to blow another bubble, someone has to be able to profit when this latest soon to be failed attempt at central planning."

 

Comment:

The answer is easy. Some like Paulson will get together with a bank and package GBSL (Government Backed Student Loans) just like MBS (Mortgage Backed Securities). Sell the GBSL to the public (other hedge funds, pensions, and retail customers) while taking the short side of it.

Sun, 03/25/2012 - 16:38 | Link to Comment navy62802
navy62802's picture

Isn't that exactly what Student-Loan Asset-Backed Securites (SLABS) are?

 

Check out the Education Investment Group, which specialize in hawking these things...

http://www.educationinvestmentgroup.com/

This company was started by 3 former vice presidents of Sallie Mae's corporate financial department.

Mon, 03/26/2012 - 08:32 | Link to Comment sessinpo
sessinpo's picture

navy62802

Isn't that exactly what Student-Loan Asset-Backed Securites (SLABS) are?

 

Check out the Education Investment Group, which specialize in hawking these things...

http://www.educationinvestmentgroup.com/

This company was started by 3 former vice presidents of Sallie Mae's corporate financial department.

 

Comment:

Not quite. As your post indicates, former people from Sallie Mae created SLABS. SLABs are actually a part of Sallie Mae so enjoy the benefits of being a government sponsored entity, (GSE) or at least partial. BTW, your link took me to EIG, Educational Investment Group. That is simply a private investment firm, LLC, that did/does advisement work for Sallie Mae.

 

In my proposed scenario, you take a GSE product, in this case student loans (as opposed to mortgages on house), and totally privatize it. That is the difference and part of the scam. That is exactly what the banks do to avoid additional scrutiny while at the same time claiming the safety of the investment because it has to do with a GSE. Catching on yet?

 

Sun, 03/25/2012 - 16:26 | Link to Comment navy62802
navy62802's picture

For many of those who took out student loans, it wouldn't matter if the interest rate were 0% or even negative. Without well-paying jobs, they won't be able to avoid default on these loans. The only reason I care about this is that I and every other taxpayer are probably going to end up footing the bill for this crap. Otherwise, I'd say screw it ... these people were dumb enough to take on massive amounts of debt without any idea how they'd pay it back. But I have the sneaky suspicion that we are all going to pay for this shit.

Sun, 03/25/2012 - 16:26 | Link to Comment Monedas
Monedas's picture

You need 1,300,000 cubic meters of water to make a "Whaleburger" !

Sun, 03/25/2012 - 17:23 | Link to Comment Hulk
Hulk's picture

and 3 teaspoons of olive oil...

Sun, 03/25/2012 - 18:30 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Where's the damn beef? 

Sun, 03/25/2012 - 23:12 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Thats exactly what we will be asking when we all will have to eat White Castles in our future.  We will be giving our all beef patties to China and Saudi Arabia for crap computers and oil prices that they have jacked up.

Sun, 03/25/2012 - 16:27 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Don't worry, the student loan debt is transitory. The dollar is also transitory so when the dollar goes, student loan debt will disappear too.

Sun, 03/25/2012 - 16:28 | Link to Comment Frastric
Frastric's picture

Goodbye credit bubble no 3! Give it a year or two and this shit gets real!

Sun, 03/25/2012 - 16:29 | Link to Comment digalert
digalert's picture

I saw a TV ad recently with a has-been starlet, pumping online degree assistance program. Encourages everyone to join her. She's getting her degree online majoring in...Liberal Arts! How does the future look for a career in liberal arts look?

Sun, 03/25/2012 - 19:39 | Link to Comment Marc_W
Marc_W's picture

I've seen that, it was pretty funny.  Obviously the target demographic is unemployed young single women.  And after they get their awesome degree in "Liberal Arts" (or English, the other one they like) they will continue to be unemployed young single women.  Only slightly older and in an infinitely worse economic situation.

 

And that's about the time I scoop them up off of backpages.com.  But if they're over 22 then they can go to the retirement home.  Ain't got no love for grannies.

Sun, 03/25/2012 - 21:00 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

That commercial is funny, but not nearly as funny as this one:

http://www.youtube.com/watch?v=HvlkdyTstlI

Your tax dollars at work. The punch line is at the very end.

 

Sun, 03/25/2012 - 16:30 | Link to Comment Yen Cross
Yen Cross's picture

 Student loan= 3rd Mortgage.  Tell me I'm wrong. I dare ya!

Sun, 03/25/2012 - 16:35 | Link to Comment Seasmoke
Seasmoke's picture

these kids are going to be scared to shit of debt, they will never be buying houses

Sun, 03/25/2012 - 16:44 | Link to Comment Yen Cross
Yen Cross's picture

 I agree with you Seasmoke. I'm talking about the already " desperate indebted" , that really matter.

Sun, 03/25/2012 - 19:40 | Link to Comment Marc_W
Marc_W's picture

Wrong.  The primary point is to indoctrinate young people into a life of debt based indentured servitude.  The way to "buy" anything is by assuming a debt.

 

If you've got a massive student loan and an auto loan already, what's a little more debt?  Pile it on!  After all, as long as you never miss a pay check, or get sick, you can "afford" it!

Sun, 03/25/2012 - 16:36 | Link to Comment praxis
praxis's picture

Student Loan Forgiveness Act of 2012 recently introduced into the house

 

1) lowers interest rates

2) debt forgiveness after 10 years

http://www.forgivestudentloandebt.com/content/student-loan-forgiveness-act-2012-hr-4170-bill-text

Sun, 03/25/2012 - 18:54 | Link to Comment Dingleberry
Dingleberry's picture

Yeah...I read that article.  And about its chances for passage, and all two or so sponsors who will co-sign it. No way in hell it even makes it to a vote. The banksters don't lose...ever!!!

Sun, 03/25/2012 - 16:38 | Link to Comment DosZap
DosZap's picture

That this is happening with interest rates at record lows is quite stunning and a loud wake up call that it is not rates that determine affordability and sustainability

No common sense...................when you have a degree, and NO JOB,NO hope for one, how can you not be in default, or behind in payments. Look for this to SkyRocket.

Afternoon Delight

Sun, 03/25/2012 - 19:41 | Link to Comment Marc_W
Marc_W's picture

Student loan rates have been locked in at 6 to 7 percent for over a decade now.

Sun, 03/25/2012 - 16:37 | Link to Comment JW n FL
JW n FL's picture

 

 

For every one that doeth evil hateth the light, neither cometh to the light, lest his deeds should be reproved.

The seventh form of insanity is that there is no greater killer of jobs than elite financial fraud. Such fraud epidemics can hyper-inflate bubbles (as they did in the U.S. and several European nations) and cause severe financial crises and recessions. The resulting Great Recession has cost over 10 million Americans their existing or future jobs in this crisis. It has cost over another 15 million people their existing or future jobs in Europe. The JOBS Act is so fraud friendly that it will harm capital formation and produce additional job losses. It may appear to be an oxymoron designed by regular morons, but that underestimates the abilities of the lobbyists that drafted this bill. They are not morons. They are doing faithful, clever service to their fraudulent clients. That makes them more dangerous.


http://neweconomicperspectives.org/2012/03/the-only-winning-move-is-not-to-play-the-insanity-of-the-regulatory-race-to-the-bottom.html#comment-7973


http://dallasfed.org/assets/documents/fed/annual/2011/ar11.pdf

Choosing the Road to Prosperity

Why We Must End Too Big to Fail—Now


Ending the Bubbles.. of the Elite.. like "Student Loans" that enslave young people in debt that will never, ever go away.. the education a young person yearns for the More Power! the Elite then ensures a more obedient debt slave.. playing the game the way it was designed for them to play..

 

I would make note that the New Global Elite are soon to have no choice but to stir the pot.. loose the poor unto the poor.. so as to ensure the blinding light does not shown down upon them in their lairs.

 

http://www.theatlantic.com/magazine/archive/2011/01/the-rise-of-the-new-global-elite/8343/

 

Sun, 03/25/2012 - 16:40 | Link to Comment dolph9
dolph9's picture

If you are one of those American "suckers" out there who does the right thing, pays taxes, doesn't go into too much debt, and saves money, then yes, you will pay dearly and will be impoverished by our ongoing currency collapse if all you have is some digital money in the bank or a pension, or something like that.

If, on the other hand, you refuse to be a sucker and buy physical gold and silver, you will, at the very least, preserve your wealth.  You may even end up benefitting enormously.

The only way you can "lose" in gold and silver is if the government outlaws ownership and transaction in some way.  But here's the deal...the government can't do without simultaneously losing its legitimacy.  If the government bans it, it's a tacit admission that in fact it's worth alot.

So all that would do is drive it underground.  You would still have wealth, but it would be risky to display or spend it.

Given all of the above, I think the most prudent thing to do is to stay mainly in metals.  Keep some cash on the side, work on acquiring tangible, durable goods.

Make them actually come to and physically break into your home and steal what you have.  Don't let them do it by a currency collapse or bank holiday, or something like that.

Sun, 03/25/2012 - 16:49 | Link to Comment Rick Masters
Rick Masters's picture

I'm a big fan of silver for varoous reasons but I would think twice before acting as if there is zero risk other than government interference.

Sun, 03/25/2012 - 19:44 | Link to Comment Marc_W
Marc_W's picture

Waiting for gold to dip below $1650 then dumping about 60% of my net worth into gold.

Sun, 03/25/2012 - 22:04 | Link to Comment JW n FL
JW n FL's picture

 

 

silver out performs gold.. 9 out of 10 times.

I own Both.

A monster box a day.. keeps the doctor away!

Sun, 03/25/2012 - 16:43 | Link to Comment yogibear
yogibear's picture

The banksters loaded the youth down with huge debt with the government backing the loans. If this didn't occur tuition wouldn't be so outragious. Many young borrowers will be saddled with school debt for decades. Time for the youth to revold against this fraud. 

Sun, 03/25/2012 - 17:19 | Link to Comment I am Jobe
I am Jobe's picture

Damn, u really think they will wake up. Too busy tweeting and playing on the iphone
The media brainwashed Americans for the longest time and the stupidity is now inbred.

Sun, 03/25/2012 - 16:56 | Link to Comment El Gordo
El Gordo's picture

What better way to enslave a generation of the best and brightest than to load them down with debt,  Let's face it, the government owns them lock, stock, and barrel.  Why do you think BO took over the student loan program to begin with.  An entire generation with only government service to look to while the rest are on welfare since there will be no other jobs.  When it's all over, this will be the real highlight of the BO administration and it's program to destroy America.

Sun, 03/25/2012 - 17:04 | Link to Comment Atomizer
Atomizer's picture

 

 

Present:

CFPB: U.S. Student Loan Debt Reaches $1 Trillion 

Past: TARP and student loans

 "Deficits" and "surpluses"

* During the federal government's 2010 fiscal year (October 1, 2009 - September 30, 2010[167]), the national debt rose from $12.0 trillion to $13.6 trillion, thus increasing by $1.6 trillion.[168]

* The White House,[169] USA Today,[170] Reuters,[171] and other government and media entities reported that the 2010 federal "deficit" was $1.3 trillion.

* The difference between the national debt increase of $1.6 trillion and the reported deficit of $1.3 trillion is attributable to the following accounting practices:

• When calculating the reported deficit, the federal government merges the finances of all federal programs into what is called the "unified budget." Hence, the deficit does not account for the intergovernmental debt that arises when programs such as Social Security loan their surpluses to the federal government.[172]

• When the federal government lays out money for programs such as TARP and student loans, the outgo is not fully counted in the deficit. The deficit reflects only what the government expects to lose or gain on these loans.[173] [174]

* PolitiFact, a Pulitzer Prize-winning project of the St. Petersburg Times to "help you find the truth in politics,"[175] wrote that there were "several years of budget surpluses" during Bill Clinton's presidency. This same article cites the rise in "national debt" during the tenure of George W. Bush.[176]

* Using the same criterion PolitiFact applied to Bush's presidency (change in gross national debt), the national debt rose every year of Clinton's presidency:

http://www.justfacts.com/nationaldebt.asp

Sun, 03/25/2012 - 17:03 | Link to Comment Monedas
Monedas's picture

Anyone surprised not paying back his student loan will be treated to an Obamacare frontal lobotomy at no charge !   Anyone surprised payng back his student loan will receive intensive psycho-therapy....courtesy Obamacare !  You decide !

Sun, 03/25/2012 - 17:04 | Link to Comment Piranhanoia
Piranhanoia's picture

Hey,  I have this idea.  We want to have smart kids so they can do all the neat things for the future.  Why don't we give them an education for free if they can cut the studies?

Hell, that would be logical and create jobs and fuck banks.

Sun, 03/25/2012 - 17:05 | Link to Comment I am Jobe
I am Jobe's picture

Isn't  posting on FB considered emplyment or texting? Just thought I would ask.

Sun, 03/25/2012 - 17:05 | Link to Comment Sutton
Sutton's picture

.

Sorry Kids.  Getting a degree in Afro(anything)-Sociology-Sports marketing Studies from  NorthWestCentralState and graduating with 6 Figures in debt=NO FUTURE

Sun, 03/25/2012 - 17:09 | Link to Comment I am Jobe
I am Jobe's picture

How about Classical Studies or Gen Ed? Does that count. College Achievement- Slept with the FB team , spring break in FL and drank every night , and got my worthless Degreee. How stupid can parents be......

Sun, 03/25/2012 - 22:54 | Link to Comment Cathartes Aura
Cathartes Aura's picture

sports.  

get degreed in the sport of your choice.  why don't folks ever mention this genius move? 

Sun, 03/25/2012 - 17:08 | Link to Comment devo
devo's picture

Short Apollo Group

Sun, 03/25/2012 - 17:28 | Link to Comment delacroix
delacroix's picture

diplomaxpress.com            this looks pretty affordable

Sun, 03/25/2012 - 17:11 | Link to Comment I am Jobe
I am Jobe's picture

Hey MBA's will be driving Cabs and mowing lawns soon.

Sun, 03/25/2012 - 17:12 | Link to Comment Amish Hacker
Amish Hacker's picture

What kind of system forces its young adults into perpetual debt enslavement if they want a college education?

Our educational system needs a complete reset. The model of instruction created by Khan Academy (http://www.khanacademy.org/ ) holds great promise, imo. Online classes would eliminate almost all the fixed costs of a bricks-and-mortar-and-ivy degree. Sixty Minutes did a segment on Khan recently, so maybe the idea is gaining traction.

Sun, 03/25/2012 - 17:15 | Link to Comment I am Jobe
I am Jobe's picture

The kind that does no thinking and procreate and then pass on the same stupidity?

Sun, 03/25/2012 - 17:20 | Link to Comment mr. mirbach
mr. mirbach's picture

Khan Academy is an excellent source,  but look at the growing open courseware network - http://www.ocwconsortium.org  and check this too: http://www.saylor.org/

 

Knowledge is vastly more important than a sheepskin.

Sun, 03/25/2012 - 19:25 | Link to Comment Amish Hacker
Amish Hacker's picture

Agreed. Never let your schooling get in the way of your education.

Sun, 03/25/2012 - 17:28 | Link to Comment gwar5
gwar5's picture

Lot of bubbles out there. I'm curious to see how they'll roll them out for maximum salesmanship to the public. Will they start with the big ones right away again like housing? Or, start with the little ones again like Greece and work their way up? 

 

Sun, 03/25/2012 - 18:15 | Link to Comment SoCalBusted
SoCalBusted's picture

This one (student loans) is a good one to have just before the election - a great way to mobilize Obama's base of young people and minorities.  "Higher Education is a Right".

Here in California, in absolute terms, the community colleges are very inexpensive, but not sustainable.  They are now predicting very high percentage increases in tution costs and the students are protesting- they always reference the high percentage increase but not the dollar amount (makes for better press).  When you listen to these "students" on TV you can see that they are clearly on the entitlement train.

It now takes students 4 years to graduate with a 2 year degree because the demand is too high for the classes they need.  There is one school that is attempting to increase the price for certain classes at certain times and is being threatened with a lawsuit.

So far, the response to this problem by the state is to cut back on the classes they offer, but not change the price.  BTW the presidents of these institutions are making $250K-$500K/year.

Looks like what government run health care will turn into.

Sun, 03/25/2012 - 17:30 | Link to Comment Monedas
Monedas's picture

Sandra Fluke (pronounced fluck!) is 30 days late on her period because she couldn't afford contraceptives !  Student loans should cover books, room and board and condoms !

Sun, 03/25/2012 - 17:44 | Link to Comment I am Jobe
I am Jobe's picture

How about IPADS and IPHONES?

Sun, 03/25/2012 - 18:31 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Yes Ipads are covered as long as you spend at least 8 hours a day studying facebook or twitter on it.

Sun, 03/25/2012 - 17:32 | Link to Comment All_Is_Well
All_Is_Well's picture

"as many as 27% of all student loan borrowers are more than 30 days past due."

The number could be moore than 270 billion depending on what the 27% late-payers owe

Sun, 03/25/2012 - 18:09 | Link to Comment MissCellany
MissCellany's picture

Thanks for pointing this out. Surprised I had to read down this far before someone said it.

Also, where's the link to the actual Fitch story, for clarification? The only Fitch links I can find in this post just go to Fitch's homepage, not to any actual article.

Sun, 03/25/2012 - 17:32 | Link to Comment hotrod
hotrod's picture

Clearly predatory lending to the innocent. College kids think they are all going to get 6 figure jobs and set the world on fire. Lending to those that have no idea what the abysmal job market is like with unemployment and low wages is despicable.  Of course they all think they can pay it off easily. I would have back in my college days.  Do I hear lawsuit to reduce/forgive loans?  For all of you that already paid for your education well,  Suckers.  Kind of like home loan forgiveness/reduction, where was mine, paid mine off the old fashion way by investing in gold.  Today it is best to pile on any type of loan and keep your assets.  If you get a job and can pay them off great,  If not,  plead hardship get it all reduced. 

Sun, 03/25/2012 - 17:46 | Link to Comment I am Jobe
I am Jobe's picture

Why College Students Don’t Understand Student Loans
http://www.washingtonmonthly.com/college_guide/blog/why_college_students...

Screw this, where are the parents in the decision making process. O I forgot they are as dumb and they breed stupidity.

Sun, 03/25/2012 - 18:44 | Link to Comment BidnessMan
BidnessMan's picture

Kids don't have to tell parents .....

Sun, 03/25/2012 - 18:32 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Reminds me of when I went to college and they were all hocking credit cards to me.  

Sun, 03/25/2012 - 17:39 | Link to Comment Monedas
Monedas's picture

A friend put his daughter through a BS degree in electronic engineering at USC, now she's doing her internship (?) to finish her degree in Pharmacology from UCSF.....soon she'll get a $10/hr job at a CVS pharmacy ! No student loan....he paid for it in after tax income ?  Don't cry for him, Argentina, he's been hoarding silver for 40 years !

Sun, 03/25/2012 - 17:44 | Link to Comment I am Jobe
I am Jobe's picture

Good for him.

Sun, 03/25/2012 - 17:44 | Link to Comment libertus
libertus's picture

and.....its gone. So long higher ed in its current from. It is finished! Let's party! I don't mean to toot my own horn, but I did say that this was coming back in 2009. If you want proof read this....

http://vermont.academia.edu/RobertSkiff/Papers/1296007/Blowing_the_Last_...

Sun, 03/25/2012 - 17:47 | Link to Comment I am Jobe
I am Jobe's picture

wanna bet Taxpayers will have to eat this shit of rhte fags and whores coming out of college and think they need the 6 figure jobs. F this shit.

Sun, 03/25/2012 - 17:53 | Link to Comment sabra1
sabra1's picture

this is $270 billion in debt that can not be discharged.

transfer all your debt to the big banks credit cards, then file for bankruptcy! see, no more debts!

Sun, 03/25/2012 - 18:00 | Link to Comment pursueliberty
pursueliberty's picture

Can you pay student loan payments with a credit card?

 

Why couldn't you get out and pay them all off with a couple cards, and file BK on the cards?

Sun, 03/25/2012 - 18:06 | Link to Comment dwdollar
dwdollar's picture

Most people (the ones in real trouble) don't have a few thousand in student loans. They have tens of thousands or more.

Sun, 03/25/2012 - 18:33 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Yes you can there is a credit dealer with a free shirt next to every building.

Sun, 03/25/2012 - 18:50 | Link to Comment Dingleberry
Dingleberry's picture

Yes but even banks are not going to give kids 60k credit limits. The credit cards usually dole out a few grand, maybe more, and give kickbacks to the university. When a kid checks out of the school bookstore, there will inevitably be a few credit card solicitations in the bag, along with the rceipt.

Sun, 03/25/2012 - 19:10 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

I had 38,000 dollars in credit limit before the banks started hampering down.  I made less money a year than that.  Giving a student who is unproven a 60,000 dollar loan is stupid.

Sun, 03/25/2012 - 19:30 | Link to Comment Marc_W
Marc_W's picture

Yes, I did pay off my student loan with a credit card for the "cash back."  Then I paid off the credit card that month.

 

My student loan was in the 4 digit range and I paid it off within 18 months of starting my first post-college job.

Sun, 03/25/2012 - 18:19 | Link to Comment Dre4dwolf
Dre4dwolf's picture

Lol so what? the students were essentially used to counterfeit money, my CUNY university is enrolling BUMS off the street (really homeless people) as students so that they can inflate the currency / counterfeit it by creating a loan.

 

(every time a loan is made / created the credit/money/ etc is created (inflating the money supply) the people who get to spend that money first before the inflation kicks in are the net beneficiaries.

 

(If a student takes out a 40,000$ student loan, the bank (in this case the school) gets to "create" 40,000$ out of nothing with which it can use to pay its teachers/buy supplies/give bonuses to the board of directors.

The best thing is these loans are "deposits" so they are recorded as "assets" on the schools/banks books.

Where is the risk? the school/bank takes no risk in creating the FIAT currency... the only ones harmed are the students who have to "pay back" these exorbitant loans in an environment where there are no jobs waiting for them after they graduate... and the rest of the population who losses buying power.

 

 

Im not bullshitting you on any of this... this is actually how it works! Its the same thing with car loans, home loans, mortgages, business loans, credit card loans... etc.... the students/"borrowers"  signature is in itself MONEY... (read modern money mechanics and two faces of debt (the publications of The Federal Reserve on "Fractional Reserve Banking".... ) its all in there... out in the open.

 

The funny thing is the more loans (deposits) the bank takes on, the more that it can further leverage those deposits ( all banks are levereaged something like 98 Cents out of the dollar).

 

Debt = Deposits = Reserves = Allows you to make more Debt/Money (money and debt are the same thing, because money represents Debt and Debt represents money) there is always more debt than money to pay it back so its impossible for there ever to be a "pay off " of the debt without someone or some city/country defaulting.

 

The only way one country in the EU for example can ever pay off a debt / is for another country to default/make a payment late.

So greece is actually in the position it is in ATM at no fault of its own (really)... because its a systemic "design" problem of the monetary model... that causes the shortage of funds to pay the debt obligations in the first place.

 

But  you already knew that didn't You? because this system is designed to strip nations / people of their freedom and make them tenants in their own country.

Sun, 03/25/2012 - 23:05 | Link to Comment Cathartes Aura
Cathartes Aura's picture

cue vigorous applause!

Sun, 03/25/2012 - 18:09 | Link to Comment Walt D.
Walt D.'s picture

The real effect of this is going to be on the colleges themselves. They have jacked up tution fees, salaries etc. They are dependent on students being willing to go into debt. This looked OK when rates were low and job prospects upon graduation were good. College loans can not be discharged in bankruptcy, so as people see 50% unemployment/under-employmnet rates for new graduates, enrollment will probably drop off. This will be a disaster for colleges, many of whom are stuck with paying 6 figure retirement benefits. 

Sun, 03/25/2012 - 18:16 | Link to Comment dwdollar
dwdollar's picture

Better hope the college professors around here miss that. They'll be all over your ass with smug, passive aggressive innuendos about how ignorant you are.

Sun, 03/25/2012 - 18:17 | Link to Comment imapopulistnow
imapopulistnow's picture

The homeownership pipeline has been shut off.  Cannot save for a downpayment when discretionary income goes to pay off student loans.  Cannot buy a house when you're delinquent on student loan payments.

Sun, 03/25/2012 - 18:24 | Link to Comment Dre4dwolf
Dre4dwolf's picture

Isn't it the law that you have to "wait" 5 years after graduating to declare bankruptcy for a student loan?

They changed the law because all the rich peoples kids were going to the best schools on student loans and declaring bankruptcy the day they graduated so that they could start with a "fresh start".

Sun, 03/25/2012 - 18:40 | Link to Comment Marc_W
Marc_W's picture

That's because rich people are smart.  They work within the confines of the law, not silly notions of peasant morality and "ethics."

 

Anyone that thinks paying a student loan for 20 or 40 years is "honorable" is a fucking tool and deserves to be poor.

Sun, 03/25/2012 - 18:11 | Link to Comment JLee2027
JLee2027's picture

A 100% debt wipeout and Reset with a new currency is envitable.

I would suggest buying and hoarding Silver coins and Silver eagles.  If the Government won't stop this mess, the People must.

 

Sun, 03/25/2012 - 18:21 | Link to Comment Dre4dwolf
Dre4dwolf's picture

But that doesn't solve the problem it will only delay it if you use the same debt based currency model (the same thing will happen again)... and again repeating every 5 ~ 10 years until the either the POPULATION decreases or the ENERGY (oil) INCREASES to fuel GROWTH.

Sun, 03/25/2012 - 20:59 | Link to Comment JLee2027
JLee2027's picture

And a return to sound money...

Happy?

Sun, 03/25/2012 - 22:23 | Link to Comment TuesdayBen
TuesdayBen's picture

And that new currency will exist only on servers...

Mon, 03/26/2012 - 02:24 | Link to Comment JLee2027
JLee2027's picture

Electronic money should be virtually outlawed, if you ask me. It's just a way to control people and pretend to balance a nations accounts w/o actually moving anything. 

Sun, 03/25/2012 - 18:18 | Link to Comment altinvestors
altinvestors's picture

Liberalism at its finest.

Sun, 03/25/2012 - 18:32 | Link to Comment Dre4dwolf
Dre4dwolf's picture

Liberals are monetarily illiterate , they don't know how to manage money so they prefer the solution of inflating/counterfeiting their problems away (cant afford it? print money!)

LOL

Republicans are just as illiterate (in office with the exception of Ron Paul because he knows WTF is going on) , but atleast they understand you cant keep getting deeper and deeper into debt forever.

 

Obama is actually (more or less) doing what he should to keep the system going, (but the real question shouldn't be "how to keep things working" it should be "how can we create a new system that actually works given the environment".

Its like we are stuck in a room filling with water, if we dont find a solution we will drown in debt.

The liberals are turning the faucet on faster so we can drown and get it over with already.

And the republicans are trying to bail the water out with a spoon (tossing it right back in the same spot where they picked it up)

we need one smart ass to come in and change the model, someone whos gona blow a hole in the wall , drain the water (pent up debt/energy staling the economy) and route the flow of water (debt/money) in more constructive places...

Its really a systemic / environmental issue.

 

Sun, 03/25/2012 - 18:34 | Link to Comment Tom Green Swedish
Tom Green Swedish's picture

Why do they need to charge so much?  Don't they have television contracts with the networks?

Sun, 03/25/2012 - 18:37 | Link to Comment Marc_W
Marc_W's picture

My advice to any young person starting out with nothing in America is to take on a massive student loan debt load, get a top quality education, and then leave the U.S. never to return.  And refuse to even answer the calls about your 6 figures in student loan debt.

 

This advice is especially true for a young white man that is being actively discriminated against in academia and the work place.  There are no scholarships for white men.  There are no affirmative action job quotas to meet for white men.  This country doesn't want you white man.  So why do you remain loyal to it?  Because of your family?  Talk to them on Skype as you're making your fortune overseas.  They can come visit you.

 

The game board is rigged against you, white man.  So we are constrained to kick over the gaming table.

Sun, 03/25/2012 - 19:49 | Link to Comment kekekekekekeke
kekekekekekeke's picture

wrong

https://fmafe.org/ maybe you should donate

I know lots of successful white men who are doing just fine. Don't whine about a system working against you when it's just that YOU are inadequate.

Sun, 03/25/2012 - 20:02 | Link to Comment Marc_W
Marc_W's picture

Oh I'm doing quite fine, I just had to work twice as hard as any minority to get where I am.  And I work twice as hard to maintain my place at the table.  I'm easily in the top 5% of people my age throughout the U.S. in terms of both salary and net worth.

 

While my black co-workers sleep on the job (when they aren't watching TV or browsing espn.com), I'm engineering solutions to complex problems and keeping the whole operation moving forward, along with the other white men in the office.  But, that's the white man's burden I suppose, to carry civilization forward while the mud people feast on the abundance of white society.

Sun, 03/25/2012 - 20:11 | Link to Comment kekekekekekeke
kekekekekekeke's picture

thanks for keeping that 7-11 open for me brah

Sun, 03/25/2012 - 18:38 | Link to Comment Threeggg
Threeggg's picture

I am 6K away from paying off my sons 80K debt for College.

Call me a sucker !!!!!!!!!!!   WTF > ? Loan/Debt forgiveness !

You tell me now, I could have saved that money for retirement ?

Bullshit.............the whole ball of wax is gonna come down !

Sun, 03/25/2012 - 18:41 | Link to Comment Marc_W
Marc_W's picture

YOU paid for HIS college loans?  80K?

 

Yea, you're a fucking moron.

Sun, 03/25/2012 - 18:49 | Link to Comment Threeggg
Threeggg's picture

Not his loans genius, I paid for his College out of pocket. From what I am reading here, I should of had him take out loans so that they could be forgiven and paid for by "You"

All paid for as he has no debt.

Thanks...................................Pop's !

Sun, 03/25/2012 - 19:16 | Link to Comment Marc_W
Marc_W's picture

Yes, you should have.  The system feeds on people like you that follow peasant morality.

 

Under the law the course of action with the largest positive outcome would have been defaulting on loans.  People much, much richer than you have had their children do exactly this.  Because they follow the "law", not the morality of the peasant/slave.

 

Then you could have given your son 40K and he could have traveled around the world chasing women and partying for a few years until he was really ready to settle into a career.  The vast majority of young adults leaving college at 21 or 22 years old are not really looking forward to being some office schlub for the next 45 years.

 

You both sound like tools.  But, again, the system feeds on people like you.

Sun, 03/25/2012 - 19:49 | Link to Comment Threeggg
Threeggg's picture

Marc,

You sound like a privledged azzhole that never did a days work in his life ! and from your words, you have been mating with a certain reject poster here "that everyone loves"

Question: Did you swallow ?

Sun, 03/25/2012 - 20:06 | Link to Comment Marc_W
Marc_W's picture

Pretty bold assumptions there chump.

 

I hope you and your loved ones die painfully of cancer and your son gets murdered by negroes.

Sun, 03/25/2012 - 18:57 | Link to Comment Dre4dwolf
Dre4dwolf's picture

Im sorry to hear that, you really should of just taken out a student loan in his name and not paid it off/delayed paying anything towards it for as long as possible.

 

Theres really nothing the student loan enforcers can do to make you pay the loan back (besides annoying calls).

 

You are a "sucker" in view of the "bigger picture".

I guess you can take solice in the fact that you are one of the few honorable people left in this country... but when theres 1 honorable guy for every 10 million ... whats the point?

This is why Obama is winning with his socialist agenda, because the system has been rigged for 40 years to benefit the super rich/legally attuned class, and now the middle class is catching on to the loopholes and "cheat codes" that the rich have been using for decades... theres a scramble by the establishment to close the loopholes/kick down the ladder of "success" before anymore people can climb it.

 

The rich are rich because they played dirty by taking advantage of the laws on the books which they themselves lobbied to have put in place... *you cant benefit from a law unless you know about it.

 

=/ sorry to hear you wasted 80,000$

Sun, 03/25/2012 - 19:20 | Link to Comment Marc_W
Marc_W's picture

That's right!  American culture and society is CORRUPT and rotting from the top down, and bottom up.  The few "honorable" folks stuck in the middle are being vampirized by the parasites at both ends of the economic ladder.

 

Without this jackass paying $80K out of pocket, in addition to all the taxes he surely pays, all those Hispanic anchor babies couldn't go to college for free.

Sun, 03/25/2012 - 22:03 | Link to Comment devo
devo's picture

Having paid off my loan in full, I can say you'll get satisfaction from meeting your responsibility, even if it turns out you didn't have to.

Sun, 03/25/2012 - 18:41 | Link to Comment no life
no life's picture

The committee believes recent student loan delinquencies are transitory...

Sun, 03/25/2012 - 22:14 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

.

The committee believes recent student loan delinquencies are transitory...

...because they'll soon be moving into the default category.

 

Sun, 03/25/2012 - 18:46 | Link to Comment Dingleberry
Dingleberry's picture

Predicting this impending crisis takes about as much prescience as predicting the sun will rise tomorrow. The student loan fiasco has been building for quite some time, with completely predictable results. These kids are hosed. No way in hell they are getting out of their debts. The private banksters tack on fees and higher interest the nanosecond they go into a late payment status. Sallie Mae acts like the IRS when it comes to collecting. But don't think for a minute these kids did not know what they were doing. Some did not, but most did.  They were raised on the "consumerist" model. Use today.....pay tomorrow. They could have picked cheaper schools....but no. They had to inflate their egos and go to private, out of state ones, or ones with big sports stadiums. And going to Europe or Australia to "study" for a semester.  If you offered these kids a million bucks in student loans, they would take it. They don't care.  Tomorrow doesn't exist to them, except they become fabulously rich when the graduate.

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