Guest Post: Risk And The Indentured Servitude Of Student Loans

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Thu, 12/22/2011 - 14:40 | 2004692 GeneMarchbanks
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Obama will rescue them. Probably by offering government jobs to pay off the loan.

Thu, 12/22/2011 - 14:45 | 2004730 AldousHuxley
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where most law degreed liberal arts majors get jobs nowadays anyway.


In some dysfunctional countries, quarter of the graduates got a job with the university they graduated from!


Talk about a ponzi scheme.....


Look at how much "private" non-profit universities donate to political candidates and promote slave research labor on H1B (PhDs in STEM for $35,000 which is less than a truck driver's wage). Time to tax universities and cut off government subsidies.

Thu, 12/22/2011 - 15:52 | 2005040 MachoMan
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The pay, when considering student loan forgiveness and other perks (e.g. health insurance), can be much higher with .gov...  aside from the whole "no responsibility" thing (certainly a good perk).

Thu, 12/22/2011 - 16:05 | 2005097 AldousHuxley
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competition is for suckers!


private workers are like gladiators who get a "prize" if they manage to kill each other only to live to fight another day.


public workers are spectators in a gladiator match....they don't get the glory of victory, but have the security of enjoying the competition without having to participate in such a brutal cutthroat activity.


elites are the ones making the bets on a gladiator

and wall st. workers are the bookies


there is the loyalty oldmoney folks writing the rules of the game at the very top


and of course immigrants and foreign laborers are slave class where they do real productive work but can't afford to pay to see the gladiators.

Thu, 12/22/2011 - 16:11 | 2005116 tarsubil
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Wow, what a comparison. Disturbing and hard to deny. No one wants to admit where they stand.

Thu, 12/22/2011 - 22:53 | 2006217 Harlequin001
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So wehat happens if they don't pay? The banks will bankrupt them? Evidently not, so don't pay.

Set up a trust and have the trustee buy your next house, car clothes and everything else. Set up a company and contract for income through that, take a company credit card, it doesn't even need to be a domestic company; there may be no tax benefits but so what? You don't even need to use a professional trustee.

Give the State and the lender the middle finger and go forth, as they say.

When there's no way out, stop looking...

When there's no way to pay, stop trying. Bankruptcy doesn't matter overseas, go figure...

Thu, 12/22/2011 - 23:32 | 2006306 jeff montanye
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really.  widen your horizons.

Fri, 12/23/2011 - 03:39 | 2006579 Harlequin001
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In what way?

Fri, 12/23/2011 - 11:05 | 2007021 Bicycle Repairman
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A series of perfect metaphors.  Now pardon me while I grab my armor and sword. 

Thu, 12/22/2011 - 18:33 | 2005584 halflink123
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No they don't get jobs. Haven't you read anything about the job market for lawyers? It's terrible. 


No one's getting jobs now. Wake the fuck up.

Thu, 12/22/2011 - 15:44 | 2005008 Henry Chinaski
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This is not news to ZH readers, but student loans are just another racket that funnels money to the banksters and academia so they can pay off the politicians who will protect the racket.  It's no wonder TOTUS nationalized the student loan program.  Look at Obamas top election contributions. When you apply for a student loan, you get inducted into the banking system, not just for student loans but for credit cards, debit cards, the whole shebang... 

2008 Presidential Election:

Barack Obama
University of California $1,648,685
Goldman Sachs                 $1,013,091
Harvard University          $878,164
Microsoft Corp                 $852,167
Google Inc                          $814,540
JPMorgan Chase & Co   $808,799
Citigroup Inc                       $736,771
Time Warner                      $624,618
Sidley Austin LLP              $600,298
Stanford University         $595,716
WilmerHale LLP                 $550,668
Columbia University       $547,852
Skadden, Arps et al         $543,539
UBS AG                                $532,674
IBM Corp                             $532,372
General Electric               $529,855
US Government               $513,308
Morgan Stanley                $512,232
Latham & Watkins           $503,295

*Groups in bold also cited in the Sanders Report on conflicts of interest at the Federal Reserve:


Thu, 12/22/2011 - 16:01 | 2005076 LasVegasDave
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What a shock!  Govt. sponsors something and private enterprise angles in to make a profit.  Can't be!!!!

Well, that is as good an excuse as any not to pay back your student loans!

"They tricked me, see, I really shouldnt have gone to college, cant do nuthin with the education they gave me, so fuck the lenders, Im not payin!"

Paying your mortgage is optional in America. Why not add student loan repayment to the list.

Thanks to thieving bankers, corrupt politicians and half brained parasites America is toast.

Thu, 12/22/2011 - 16:08 | 2005105 tarsubil
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So it is morally wrong to exit from a contract like a mortgage? Are you one of these people that equates killing with murder? Might as well equate speaking with lying (I know that is true for you here, but it isn't all the time).

Thu, 12/22/2011 - 16:23 | 2005151 LasVegasDave
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whose morals?  yours?

Were the home buyers immoral for buying more house than they could afford?  Or for not understanding what they were signing?  Or for using taxpayer money (via FNMA) to subsidize their home purchase?

You pays your money, you takes your chances

Thu, 12/22/2011 - 16:25 | 2005160 tarsubil
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What the heck, the bank gets the house if they did their job correctly and the person doesn't pay. If that ends up screwing the bank because it took part in fraud on a massive scale so the value of the house was fraudulent, screw the bank. The person has every right to walk away! There is nothing immoral about that. You are an idiot!

Thu, 12/22/2011 - 17:58 | 2005439 LasVegasDave
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and if the bank bargained for recourse debt, what then?

Since when is enforcing a debt immoral?

Thu, 12/22/2011 - 18:35 | 2005589 halflink123
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The key point is that it's NOT DISCHARGEABLE.

Do you know the difference between "recourse" debt and "nondischargeable" debt? Holy shit...

Thu, 12/22/2011 - 17:37 | 2005384 Omen IV
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no one  - including the students  - has to pay back on any bank loan of any kind - the banks are there to be taken down - they have committed massive fraud - the houses in many cases are worthless and the upkeep and taxes horrendous - if the banks dont want the properties screw them - if enough students just say: hell no we wont pay - they have millions of people to go after - impossible task  - civil disobedience is the answer to tyranny - bring on the chaos


Thu, 12/22/2011 - 16:21 | 2005142 TheSilverJournal
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Most of these student loans will never get payed back and they should be counted in the national debt along with all of the other off balance sheet debt which much of won't be payed back, which would have put the US over the 100% debt / GDP long ago.

Thu, 12/22/2011 - 14:39 | 2004695 mayhem_korner
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In the "student" loans racket, the students are a simply a transfer vehicle for the gubbmint to subsidize university administrators & teachers.

Thu, 12/22/2011 - 14:41 | 2004704 GeneMarchbanks
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Transactionism at its purest.

Thu, 12/22/2011 - 15:14 | 2004881 AldousHuxley
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The moonies have figure that one out long time ago. They own a univerisity in the east coast. They have revenue raising operations in eastern soviet bloc where poor people are prime for religious brainwashing. How do you transfer money from Russia into US without IRS detecting?


You have one of your brainwashed deciples in Russia go to church owned college in US. This person is poor so they can't afford it, so you give them a "scholarship" from church branch in Russia. This person takes the money into US and "pays" church owned school a tuition. Church owned school transfers the money back into church banks. Tada! have transferred $30,000/year legally! multiply that for 100 "scholarships" and easily a $3M/year money laundering scheme per country.


By the way moonies paid big bribe to ivy league school so their kids can get in. And they own majority of fish suppliers to top sushi places.


Church checking account is just a non-profit tax-exempt bank account for the moonies business just like the MORMONS who is about to get their chosen one become president of the USA.

Thu, 12/22/2011 - 21:01 | 2005995 mkkby
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Don't cry for the students.  They made their choice freely.  They could have gotten a useful degree or planned to learn a trade.  Instead, many took the "easy" money to party for a few more years instead of growing up.

To those who whine "they were duped" -- they knew better.  Deep down everyone knows a degree in culinary arts, fashion merchandising or art history ain't gonna pay off the loan.

Thu, 12/22/2011 - 14:43 | 2004711 cranky-old-geezer
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Student loans: The new subprime.

Thu, 12/22/2011 - 14:50 | 2004750 mayhem_korner
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Hyperinflation: like the soon-to-be USD, a college degree is a worthless, $200,000 piece of paper.

Fri, 12/23/2011 - 11:00 | 2007009 Tangurena
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One of the older students in my class has college age children herself. She said that she was required to co-sign her childrens' student loans and put herself into debt bondage forever.


I suspect that the final act will be to make student loan debt inheritable, and thus ensure the slavery of future generations. Hope you liked that degree in underwater basketweaving, as your grandchildren will be sold into slavery to pay for it!

Thu, 12/22/2011 - 14:43 | 2004715 dizzyfingers
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Wasn't student loan fix in the health care bill, and didn't Obama fix it a few weeks ago; pay not over 10% of annual income (whether $5,00 or $500K) for 20 years, then they're finished? I'm sure we read that article.

If not, go to grad school on Sallie then don't collect a paycheck. 

Thu, 12/22/2011 - 15:12 | 2004870 Hohum
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You mean income based repayment?  I think you can get the balance forgiven at the end of 20 years.  Of course, the forgiven debt is treated as income by the IRS.  Go IBR, get a tax bill!

Thu, 12/22/2011 - 15:29 | 2004940 Peterpaul
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And that will be a hell of a tax bill, too! If you "paid off" $4,000 a year (10% of your income at the average wage) on a $100,000 loan at 8%, in twenty years or so you are gonna owe about $150,000. So, with a tax bill now at about 39% of that, you would still owe Uncle Sugar almost $60,000! Thus, you might have written off $90,000, but you still end up paying $80k ($4k x 20 years) plus $60k (and interest) to the IRS. Thus, your debt still covers the loan principle and decent interest.

And to think, you end up paying $140k plus for a loan that cost the entity nothing!

Thu, 12/22/2011 - 15:29 | 2004941 Peterpaul
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And that will be a hell of a tax bill, too! If you "paid off" $4,000 a year (10% of your income at the average wage) on a $100,000 loan at 8%, in twenty years or so you are gonna owe about $150,000. So, with a tax bill now at about 39% of that, you would still owe Uncle Sugar almost $60,000! Thus, you might have written off $90,000, but you still end up paying $80k ($4k x 20 years) plus $60k (and interest) to the IRS. Thus, your debt still covers the loan principle and decent interest.

And to think, you end up paying $140k plus for a loan that cost the entity nothing!

Thu, 12/22/2011 - 16:00 | 2005073 ebworthen
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Most of the student loans can't be paid, and won't be paid.

The income and the savings are just not there.

Thu, 12/22/2011 - 16:27 | 2005169 rbg81
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Relax.  Its just another mechanism to compel them to be productive citizens of the Empire.

Thu, 12/22/2011 - 14:45 | 2004727 SilverIsKing
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Everyone will be off the hook when the dollar goes to zero.

Thu, 12/22/2011 - 14:52 | 2004752 cranky-old-geezer
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Yep, paying off a $100,000 student loan will be easy when bread costs $100,000 a loaf.

Thu, 12/22/2011 - 14:53 | 2004762 SilverIsKing
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When bread costs $100,000 a loaf, student debt will disappear.

Thu, 12/22/2011 - 15:01 | 2004811 mayhem_korner
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Yes...just send your loaf to the Student Loan Administration.  Come to think of it, I think I'll send 'em a loaf now.

Thu, 12/22/2011 - 15:18 | 2004897 SilverIsKing
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Yes, pinch one off and Fedex for morning delivery please.

Thu, 12/22/2011 - 15:36 | 2004976 James-Morrison
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I don't have a loan.  So send 'em an extra loaf for me.

Thu, 12/22/2011 - 16:01 | 2005074 CH1
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When bread costs $100,000 a loaf, student debt will disappear.

Sadly, it won't.

The whores in DC will just reset loan values, ex post facto.

The laws will be passed and the banksters protected, in the name of all that is holy.

Thu, 12/22/2011 - 15:36 | 2004875 Hohum
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Problem is many student loans have variable rates.  Uh-oh!

Thu, 12/22/2011 - 15:21 | 2004905 Catullus
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Except many of the student loans have variable interest rates. Killer.

Thu, 12/22/2011 - 14:45 | 2004729 Yardstick of Ci...
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Tyler, would you please tag this post with "student loans." I like to keep all these posts at my fingertips to send to younger generations believing that student loans are "no big deal."  Thanks.

Thu, 12/22/2011 - 18:06 | 2005466 NotApplicable
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In case it doesn't get tagged, you might just have to remember "Sallie Mae" as well.

I've found Gary North to be an invaluable source on this topic. Although, since he writes a lot of stuff from a hardcore Christian perspective, some people might not be receptive to his ideas (even though they are still applicable, as his focus on debt slavery and wasted time (as compared to an apprenticeship where you learn while you get paid))

Here's one of his articles over at

Thu, 12/22/2011 - 14:48 | 2004743 nodhannum
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Amen, we have a winner.  I live in the glorious peoples demoKratic republic of Chapel Hill, home of the UNC.  If one goes to Whole Foods during the day, one would think they are attending a reunion of the "3.SS-Panzer Division Totenkoph" for all the BMWs and Mercedes in the parking lot with profs buying "organic junk" at triple the price of Harris Teeters.  You got it mayhem_korner, the left elites that care so much for the downtrodden feeding at the governments trough.


Thu, 12/22/2011 - 14:55 | 2004776 ffart
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Hey that's not fair, those SS troopers actually had to work for a living.

Thu, 12/22/2011 - 15:34 | 2004965 daveeemc2
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you are uninformed. Go read up what certified organic means.

Me personally, i am not as hip as you. I personally dont like to eat stuff grown from my neighbors toilet

If you prefer farmers using human sewage ( on farm fields, then please, by all means, continue to ignore labels.  Go read up on HR254 - Sewage Sludge Notification( and EPA Title 40, Section 503 - Land application of sewage sludge($FILE/503-032007.pdf).  Its real, its happening, and u dont have a clue.

I think it is directly related to all the MRSA in meat, and ECOLI in raw cookie dough. 

Enjoy the stomach craps, that, of course, is if u survive.

Its amazing what your government doesnt tell u, no?

Thu, 12/22/2011 - 16:01 | 2005079 ebworthen
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Soylent Green next.

Thu, 12/22/2011 - 16:30 | 2005185 Rearranging Dec...
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I think its ironic you bring this up given your avatar. He had a bit about being proud to eat food off of the floor and only washing his hands after a number two.

Thu, 12/22/2011 - 17:16 | 2005335 DaveyJones
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not sure Whole Foods is not a hypocrite in this arena as they continue to refuse to label the food they sell that is genetically modified. I am the first one to fear modern industrial food but Whole Foods could be more consistent

Thu, 12/22/2011 - 18:34 | 2005587 Lednbrass
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Youre both a bit off and overstating things here.

Getting certified organic isnt a bad thing and it does prevent chemical and sewer sludge usage, but not being certified hardly means it is grown with sewer waste which is not common practice though it does happen.  As it stands, organic certification is set up to benefit the very large farms (generally using illegals) with its 20 page application and $600 annual fee that pushes small farmers out of the market.

On the flip side, organic certification does require that you use animal waste if you want any hope of growing with sufficient yield to make it financially viable.  Be clear that you are eating food grown the majority of the time in untreated cow, horse, and chicken shit/piss as opposed to treated and processed human shit/piss.

No matter which way you go, there is excrement involved.  Nitrogen doesnt magically appear, and while using crop rotation and nitrogen fixing green manure in the winter can help it comes down to shit or chemicals- and since you cant use chemical fertilizers and get certified organically it comes down to animal crap and urine.

In the end, its a pick your poison.

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