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Guest Post: Student Debt Malinvestment

Tyler Durden's picture


Submitted by John Aziz from Azizonomics

Student Debt Malinvestment

Student debt levels continue to soar. In 2012 they hit $1 trillion for the first time ever.

But college education isn’t reaping the rewards it once did.

According to the Associated Press:

About 1.5 million, or 53.6 percent, of bachelor’s degree-holders under the age of 25 last year were jobless or underemployed, the highest share in at least 11 years.

And real wages have fallen for recent college graduates — although this has been part of a broader trend of falling real wages in the general population:

So why is student debt still soaring?

The crucial factor is that student debt isn’t like other debt — it cannot be discharged simply through bankruptcy.


There’s no incentive for private lenders to be particularly careful in who they lend money to, because they know that there’s no way that whoever they lend the money to will ever be able to get rid of the debt short of dying.

But just because a loan is nondischargeable doesn’t mean that the loanee will be able to repay. With labour conditions for recent graduates still quite awful, student debt defaults have climbed. The Washington Times notes:

The number of borrowers defaulting on federal student loans has risen substantially, highlighting concerns that rising college costs, low graduation rates and poor job prospects are getting more and more students over their heads in debt.

The national two-year cohort default rate rose to 8.8 percent last year, from 7 percent in fiscal 2008, according to figures released Monday by the Department of Education.

That means that more unemployed former students will end up being hounded for debts that they cannot afford to repay, yet cannot discharge through bankruptcy. If those debts had been accrued at the roulette wheel, though, they could.

It wasn’t always this way.  Until 1976, all student loans could be discharged in bankruptcy. Until 1998, student loans could be discharged after a waiting period of five years.  In 1998, Congress made federal student loans nondischargeable in bankruptcy, and, in 2005, it similarly extended nodischargeability to private student loans.  Since 2000, student loan debt has exploded, and private student loans have grown even faster.

This presents a bigger problem than simply sending people to college who end up unemployed or underemployed. It means that capital is being misallocated. If debt for education cannot simply be discharged through bankruptcy, as other debt can be, private lenders will tend toward offering much more of the nondischargeable debt, and less of dischargeable debt. This means that there is less capital available for other uses — like starting or expanding a business. If the government’s regulatory framework leans toward sending more people to college, more people will go (the number of Americans under the age of 25 with at least a bachelor’s degree has grown 38 percent since 2000) — but the money and resources that they are loaned to do so is money and resources made unavailable for other purposes.

The efficient allocation of capital demands that lending is undertaken based on the real underlying market conditions. To ensure that this is the case, the bankruptcy rules for debt should be universal so that loan applications are considered on merit. This should mean that student loan debt should be dischargeable under the same bankruptcy conditions as other debt. More discerning lenders would likely mean less student lending — but would also mean that potential students would have to think harder about the decision to study, and be able to justify to themselves and to a lender why they are choosing to study (or why they are choosing to study a particular subject), instead of choosing to work, or choosing to start a business.


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Mon, 09/03/2012 - 18:38 | 2758832 Meesohaawnee
Meesohaawnee's picture


Mon, 09/03/2012 - 18:42 | 2758836 Michael
Michael's picture

How much more evidence do we need the whole shithouse is going to go up in economic flames?

Mon, 09/03/2012 - 18:59 | 2758875 AlphaDawg
AlphaDawg's picture

true dude, its turned into a shitshow

tick, tick, tick

my money is on pensions being the black swan.


Mon, 09/03/2012 - 19:20 | 2758918 I think I need ...
I think I need to buy a gun's picture

one of the writers not to long ago said student loan debt helps pay for our federal budget,,,,,i have no idea how true that is but interesting if it does,,,,,,,,,

Mon, 09/03/2012 - 19:47 | 2758962 Manthong
Manthong's picture

College administrators and professors aren't stupid.

They know how to get in on the front end of a good government bubble and milk it for all it’s worth..

Mon, 09/03/2012 - 20:20 | 2759035 nmewn
nmewn's picture

Preach it brother...and the babes in the woods lapped it up like kittens from their professors.

I've often wondered, what would happen to a society when they finally discover, just about everything they have ever been taught, is a lie. 

Mon, 09/03/2012 - 19:48 | 2758963 CompassionateFascist
CompassionateFascist's picture

When the Jew rules...the moneylender rules. Debt slavery.

Mon, 09/03/2012 - 19:57 | 2758985 Gully Foyle
Gully Foyle's picture


My thought is a reset to global digital currency.

Money is just numbers on a computer somewhere, pretty simple to declare a day one where everyone switches to digital currency.

Mon, 09/03/2012 - 20:58 | 2759098 Michael
Michael's picture

I"m voting for complete and total worldwide economic collapse, cause it's gonna be the winner.

Mon, 09/03/2012 - 20:24 | 2759046 Mithril
Mithril's picture

Hell the Fedral Reserve will give you free money without allowing you to pay it back to the tune of +16 Trillion....To foreign and US Banks! End the Fed
Results comming in from US Senator Sanders.

Mon, 09/03/2012 - 21:10 | 2759122 DosZap
DosZap's picture

but the money and resources that they are loaned to do so is money and resources made unavailable for other purposes.


Yes,it will enslave them to their graves in this Bankruptcy here.

Tue, 09/04/2012 - 00:31 | 2759410 logically possible
logically possible's picture

"But the money and resources that they are loaned to do so is money and resources made unavailable for other purposes"

How we ever going to start another housing bubble?

Mon, 09/03/2012 - 18:42 | 2758840 ZeroAvatar
ZeroAvatar's picture

These educated, unemployed individuals will be able to work off their debts.  BE ALL YOU CAN BE, BITCHEZ!

Mon, 09/03/2012 - 19:03 | 2758889 Ray1968
Ray1968's picture

At least mine are paid off. Thank God for that.

Mon, 09/03/2012 - 19:23 | 2758929 r00t61
r00t61's picture

The "Cannon Fodder" loan forgiveness program. 

Ask a government bureaucrat about how you can sign up, today.

Tue, 09/04/2012 - 01:33 | 2759225 RECISION
RECISION's picture

The Aztecs had a similar sort of programme.

For the greater good... something you could really put your heart into...

Mon, 09/03/2012 - 18:45 | 2758841 vast-dom
vast-dom's picture

now take that table and adjust it for the average student debt 2011 vs all other years = adjusted wages WAY LESS TODAY!!!!!!!!!!!!!

Mon, 09/03/2012 - 18:56 | 2758874 pursueliberty
pursueliberty's picture

At current rate of inflation of education it will only contiue to spread.  Well, that and wage deflation


Mon, 09/03/2012 - 18:45 | 2758842 francis_sawyer
francis_sawyer's picture

PhD's in beer pong bitchez!

Mon, 09/03/2012 - 19:37 | 2758949 infinity8
infinity8's picture

I always preferred "quarters" (off my big nose ramp). I prefer the weight of the coin and to be seated when I get my drink on. 

Mon, 09/03/2012 - 18:46 | 2758844 magpie
magpie's picture

Nationalize universities. Problem "solved"

Mon, 09/03/2012 - 18:55 | 2758873 covsire
covsire's picture

They are for all intents and purposes nationalized already.  You cannot graduate without being inundated with hundreds of hours of liberal and communist propanda.  Nationalizing them wouldn't change anything other than risk a backlash from the parents who are too ignorant to know what is really going on in colleges today.

Mon, 09/03/2012 - 19:16 | 2758914 Vendetta
Vendetta's picture

what's really going on in colleges today... tell us.

Tue, 09/04/2012 - 07:21 | 2759614 Sofa King Confused
Sofa King Confused's picture

I have a daughter in college and try to explain to her what is really going on in the world with the banksters, corporations, corupt politicians, the illusion of a stock market and lying news media and she looks at me like I am a fucking wacko.

Hmm....Maybe I am.

Tue, 09/04/2012 - 06:46 | 2759584 Colonial Intent
Colonial Intent's picture

"You cannot graduate without being inundated with hundreds of hours of liberal and communist propanda"

Your village called, their idiot is missing.

Mon, 09/03/2012 - 21:49 | 2759136 LMAOLORI
LMAOLORI's picture



When you nationalize institutions like Universities or Banks you Socialize the LOSSES. Anyone who is for people being able to write off the student loans guaranteed by the Federal Government in bankruptcy is FOR further enslaving their own children.

Mon, 09/03/2012 - 18:46 | 2758845 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

Want to stop the rising college tuition scam? Start with student loans. Two easy steps would stop this crap.

1) Allow students to discharge debt in bankruptcy

2) The gov't would not back the default. If a student fails to pay, the lender gets nothing.

Watch student loans quickly decrease in volume.

Mon, 09/03/2012 - 19:01 | 2758888 AlphaDawg
AlphaDawg's picture

u watched the video in this atricle and repeated it in an executive summary. insightful

Mon, 09/03/2012 - 19:41 | 2758952 BurningFuld
BurningFuld's picture

With you 100%. The USSA is one screwed up country.

Mon, 09/03/2012 - 20:39 | 2759079 Ricky Bobby
Ricky Bobby's picture

You must be one of those "FREE MARKET TERRORIST"!

Mon, 09/03/2012 - 21:53 | 2759213 Sabibaby
Sabibaby's picture

but what happens to the bank when the student fails to pay on the loan goes into bankruptcy? Will the bank need to be bailed out by tax payers?

People don't seem to learn from their mistakes when there are no consequences for their actions.

Tue, 09/04/2012 - 06:12 | 2759571 FrankDrakman
FrankDrakman's picture

The reason student loans aren't dischargeable is some sharpies back in my day realized that you could live high off the hog at school - getting student prices for everything, and borrowing it all - and then immediately file for bankruptcy after college, when the only possessions you had were your clothes, a few milk cartons of LP's, and maybe a beat up car. Lenders caught on, eventually, That's when they made the loans non-dischargeable for five years. So the next group of sharpies just realized that you live poor for five years, maybe travel a bit, but certainly move around a lot so the bill chasers can't find you. Then you declare bankruptcy.

So, if you want to know why today's kids are saddled with undischargeable debt, once again you can look at the boomers for the reason. We truly are the 'most selfish' generation.

Tue, 09/04/2012 - 13:50 | 2761099 Bob Sacamano
Bob Sacamano's picture


And while "private lenders will tend toward offering much more of the nondischargeable debt" -- It very simple folks, DON'T ACCEPT THEIR OFFER.  No one puts a gun to anyone's head to borrow money.   Stop borrowing. 

Mon, 09/03/2012 - 18:46 | 2758847 fonzannoon
fonzannoon's picture

After all that has gone on.....if you have a 17yr old who is a half ass student with no real ambition who managed to get themselves accepted to college and you green light them to take on 150k in debt, you deserve what you get at this point. I hope this problem corrects itself as people wake up and start making different decisions.

Mon, 09/03/2012 - 18:59 | 2758881 gbresnahan
gbresnahan's picture

It blows my mind when I see people featured in the news who have 6 figures in student loan debt and their major was something like, oh, Culinary Arts.  Even if things worked out, 6 figures in debt.  They're never paying that off, and I do not feel bad for them at all.

Mon, 09/03/2012 - 19:00 | 2758883 pursueliberty
pursueliberty's picture

My mom has a friend whose grand daughter is seriously borderline slow.  6 years of college later, she is a junior who cannot go to school because she is maxed out on student loan debt due to the fact she is still a junior.  She will never pay back her loan, she just took a 30hr/wk $8/hr job.

Point is, she should have never gone to college, she would be making $10/hr at the same job she is working at now, maybe be asst. manager even.

Mon, 09/03/2012 - 21:17 | 2759052 nmewn
nmewn's picture

She should consider a different identity...a fresh start, just sayin.

I'm past honoring contracts with thieves of all descriptions.


Would the government-banker troll like to address what the meaning of all basic contracts are or just roll through with a junk?...I won't hold my breath ;-)

Tue, 09/04/2012 - 07:52 | 2759600 Ghordius
Ghordius's picture

nmewn, how about the "statist" troll that says that among the many regulations a banking system needs there should be something that prevents the exploitation of the weak? as this is done in several countries?

or the "social conservative" troll that says that debt negotiations of people below the age of thirty should be with the involvement of their families, best paired with the father having to be part in cause and co-liable? and of course with the right to veto if he thinks this is not opportune?

or the "european-classical-liberal" troll that says together with the "european-socialist" troll that nearly-free university education at gov expense - paired with selection of the best and closed numbers - should be the normas this is done in several countries, too?

or the "european-socialist" troll that says that if the US would have tariffs and would tax the inter/trans-national corporations then there would be enough blue collar / middle-class jobs in the country so that an university degree would not be that important for the future of the young?

I could go on and on and on... ;-)

nevertheless, I like your approach. America used to be the place where you were allowed to try, to fail and to retry. too bad that this right of default without social downfall has been taken away from the student loans. it's astonishing, I'd say, and very slanted against the younger generations

Mon, 09/03/2012 - 22:38 | 2759274 MeBizarro
MeBizarro's picture

That's true but look at the overall numbers.  This is a basic breakdown in the economy functioning properly when you have roughly ~50% of college graduates finding employment commensurate with their educational level.

Mon, 09/03/2012 - 18:46 | 2758849 monopoly
monopoly's picture

It will blow up. Just not yet. Banksters get richer and our youth gets poorer. Amerika!

Mon, 09/03/2012 - 18:48 | 2758850 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

A college education should be helpful to society at large, since a literate citinzenry is essential for a functioning Republic.

The downside is that a college education has been co opted by the Debt Machine, promises of riches in parallel with debt enslavement, all facilitated by the ultimate facilitator, the Government.

Mix in the entitlement ethos where college is more a party than anything else, ok its a spa and resort as well, and we have the unfortunate outcome of semi literate graduates who can't figure out how they wound up with no work and crushing loans, all with the continued belief that they deserve a corner office at some point.

Mon, 09/03/2012 - 19:55 | 2758979 CompassionateFascist
CompassionateFascist's picture

Kids used to "get literate" in grades 1-4. Phonics and all that. Now they go to college just to learn (remedial) English. The universal, TU-inflicted JewMarxist dumb-down.

Mon, 09/03/2012 - 18:47 | 2758851 I am Jobe
I am Jobe's picture

Blame the inbred parents for this crap.

Mon, 09/03/2012 - 20:04 | 2758998 Gully Foyle
Gully Foyle's picture

I am Jobe

Bingo, we have a winner.

Do you know this story?

In 1986 Signithia Fordham co-authored, along with Ogbu, a study which concluded that some African American students in a Washington, D.C., high school did not live up to their academic potential because of the fear of being accused of "acting white." Ogbu further echoed these findings in his 2003 book Black American Students in an Affluent Suburb: A Study of Academic Disengagement (which summarized his nine-month research on the educational gap between white and African-American students in the Shaker Heights City School District located in the upscale Cleveland suburb of Shaker Heights, Ohio). He concluded that these students' cultural attitudes hindered their own academic achievement and that these attitudes are too often neglected by parents, educators and/or policymakers.

Rich, Black, Flunking  Cal Professor John Ogbu thinks he knows why rich black kids are failing in school. Nobody wants to hear it.


Ogbu concluded that the average black student in Shaker Heights put little effort into schoolwork and was part of a peer culture that looked down on academic success as "acting white." Although he noted that other factors also play a role, and doesn't deny that there may be antiblack sentiment in the district, he concluded that discrimination alone could not explain the gap.

"The black parents feel it is their role to move to Shaker Heights, pay the higher taxes so their kids could graduate from Shaker, and that's where their role stops," Ogbu says during an interview at his home in the Oakland hills. "They believe the school system should take care of the rest. They didn't supervise their children that much. They didn't make sure their children did their homework. That's not how other ethnic groups think."

It took the soft-spoken 63-year-old Nigerian immigrant several years to complete his book, Black American Students in an Affluent Suburb: A Study of Academic Disengagement, which he wrote with assistance from his research aide Astrid Davis. Before publication, he gave parents and school officials one year to respond to his research, but no parents ever did. Then Ogbu met with district officials and parents to discuss the book, which was finally published in January.

The gatherings were cordial, but it was clear that his conclusions made some people quite uncomfortable. African-American parents worried that Ogbu's work would further reinforce the stereotype that blacks are intellectually inadequate and lazy. School district officials, meanwhile, were concerned that it would look as if they were blaming black parents and students for their own academic failures.

But in the weeks following the meetings, it became apparent that the person with the greatest cause for worry may have been Ogbu himself. Soon after he left Ohio and returned to California, a black parent from Shaker Heights went on TV and called him an "academic Clarence Thomas." The National Urban League condemned him and his work in a press release that scoffed, "The League holds that it is useless to waste time and energy with those who blame the victims of racism." The criticism eventually made it all the way to The New York Times, where an article published prior to the publication of Ogbu's book quoted or referred to four separate academics who quarreled with his premise. It quoted a Shaker Heights school official who took issue with the professor's conclusions, and cited work by the Minority Student Achievement Network that suggested black students care as much about school as white and Asian students. In fact, the reporter failed to locate a single person in Shaker Heights or anywhere else with anything good to say about the book.

Mon, 09/03/2012 - 18:48 | 2758853 Poor Grogman
Poor Grogman's picture

ZH is the best free education out there.

A generation has been sold unnecessarily into serfdom....

Mon, 09/03/2012 - 18:48 | 2758854 monopoly
monopoly's picture

And why do we pay Administrators $150,000 +. And college costs as posted at Zero Hedge have gone up far more than any commodity or food item. Amazing.

Mon, 09/03/2012 - 19:03 | 2758890 pursueliberty
pursueliberty's picture

That is a huge problem with all levels of education.  Superintendents making $125k at school districts with a few hundred kids. 

Mon, 09/03/2012 - 19:28 | 2758933 seek
seek's picture

Indeed it is. About 10 years ago our local district held a bond override election because they desperately needed $5M for classroom construction, or so they claimed.

The principal of the school spent $2.5M on his new office. For real. Marble, mahogany, literally gold-plated bathroom fixtures.

When is was discovered, he was let go. No criminal prosecution, blacklisting, anything. He was working at another local district in weeks.

A few years later I met a (new) member of the school board who was venting about how anti-spending everyone in the district was, and how hard it was to find money, so I explained the score to her. If private financing had been available to the district, god knows how bad the damages would have become.But that's exactly the case for many large universities.

Educational spending it insane, and sadly it's not going to professors or students or education -- it's going to administrators, landholders and construction companies building insanely overpriced facilities and kicking some of the "profit" back to the legislators and admins, and the expense is all on the backs of students and taxpayers.

Mon, 09/03/2012 - 19:44 | 2758956 insanelysane
insanelysane's picture

Awesome.  Got in an argument with one of my kids friends' parents about me being anti spending.  Do I hate the kids or something?  Our district spends $10k per year per kid and the state average is about $13k.  I say how do you know that it doesn't actually cost $8k per kid to educate.  Where is the data?  If you spend millions on administrators that goes into the total amount per student but doesn't give the students crap.  

This year the district is charging a user fee for sports and clubs in high school.  A month before school starts, the administrators are leaving mass voice mails on everyone in the district's phone saying that we should pay before school starts because it would be easier.  They can't wait to blow the cash.  Must be getting some new flat screens for teachers' lounge or maybe the coffee vendor wanted money upfront.  I heard that some teachers stiffed a company last school year.

Mon, 09/03/2012 - 20:51 | 2759101 nmewn
nmewn's picture

"Got in an argument with one of my kids friends' parents about me being anti spending. Do I hate the kids or something?"

Thats the way its done...the guilt trip. Very perceptive on your part.

I say again, I will never live to see the day the NEA says, yep, we're good, we need no more funding.

Mon, 09/03/2012 - 18:49 | 2758855 insanelysane
insanelysane's picture

Simple physics.  Lenders paid legislature to make loans non dischargeable and lenders then when out and signed up as many people as possible.  Even if X% never pay, you will still get more money in the end.


Same thing happened with the housing bubble but no one put it together.  You go out and find people that aren't qualified for loans and give them loans. WHY?

Because the unqualified buyers are buying property which drives the price of housing up so that qualified buyers need larger loans to buy the property they want.  Unqualified buyers can't pay loans back and the bank gets the property.  Qualified buyers are stuck with loans on properties that are "underwater."  The bank bailouts were just icing on the cake.

Mon, 09/03/2012 - 19:55 | 2758978 fonzannoon
fonzannoon's picture

All the old people in my school district are leaving. Their kids are out and they don't want to pay the taxes. The younger generations can't afford to buy. It's going to be a bunch of 40 yr olds paying 25k/yr in taxes

Mon, 09/03/2012 - 21:35 | 2759171 LMAOLORI
Mon, 09/03/2012 - 18:49 | 2758856 q99x2
q99x2's picture

Those shakles have about as much strength as the counterfeit money they were purchased with. Give me a break. The student loan scam is like the food stamp program -- a way to postpone people from burning down the Hamptons. No one is ever going to pay student loans back. My friend has one from over 40 years ago.

Mon, 09/03/2012 - 19:47 | 2758960 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

"Mr. Morgan admitted that all of the money or credit which was used as a consideration was created upon their books, that this was standard banking practice exercised by their bank in combination with the Federal Reserve Bank of Minneapolis,"

May I suggest a real education for your friend?  I do believe some of these fellows were onto something.

Also check Blackstones commentaries on the Laws of England also available on that website.

That s a "Book of Authority".



Tue, 09/04/2012 - 00:56 | 2759430 OldPhart
OldPhart's picture

That makes me some sort of superior being, then.  I paid the last of mine off in March.

Mon, 09/03/2012 - 18:53 | 2758857 ZeroAvatar
ZeroAvatar's picture

These 'students' are using the $$$$ to buy icrap, clothing, housing, etc.  In other words, they are using the loans to sustain their lives. 


That's all good and well, but when the party's over, don't come crying to ME!(Living within your means?  FUHGEDABOUDIT!)

Mon, 09/03/2012 - 19:01 | 2758885 i_call_you_my_base
i_call_you_my_base's picture

What you say is true, but presenting it this way is misleading. If your tuition is $25k per year and you skim $2-3/yr for iCrap, the issue is not the iCrap. Sure it's a bad decision, but it's not the true source of the problem. The real problem is that a university will take every dime loaned to build new buildings and facilities and up the tuition every year to do so.

Mon, 09/03/2012 - 18:52 | 2758860 I am Jobe
I am Jobe's picture

The Pussy Generation

The Case for Living With Mom and Dad


Mon, 09/03/2012 - 18:53 | 2758863 buzzsaw99
buzzsaw99's picture

Anyone dumb enough to want a student loan isn't smart enough to go to college.

Mon, 09/03/2012 - 18:53 | 2758865 max2205
max2205's picture

If I were young I'd take the loan out and keep my cash

Mon, 09/03/2012 - 18:54 | 2758866 I am Jobe
I am Jobe's picture

But But College experience is the shits. Love to pay for a new fucking stadium and get raped by football players.

Mon, 09/03/2012 - 18:55 | 2758868 gbresnahan
gbresnahan's picture

Change the wages so they're priced in gold... ouch.

Mon, 09/03/2012 - 18:55 | 2758871 ZeroAvatar
ZeroAvatar's picture

LOL! “College graduates should not have to live out their 20s in their childhood bedrooms staring up at fading Obama posters and wondering when they can move out and get going with life,” Ryan said at the Republican National Convention this week

Mon, 09/03/2012 - 18:58 | 2758876 covsire
covsire's picture

This is certainly the reality today, I must have missed the punchline.

Mon, 09/03/2012 - 18:59 | 2758880 I am Jobe
I am Jobe's picture

Yeah right. Turn off the fucking ipod and Iphone and the fuckers won't even know how to boil an egg.

Mon, 09/03/2012 - 19:14 | 2758912 steveo77
steveo77's picture

Perfect +100 for Ryan

Mon, 09/03/2012 - 19:23 | 2758926 I am Jobe
I am Jobe's picture

Ryan is another con artist  Greedy Ole Pig

Mon, 09/03/2012 - 20:36 | 2759074 Bicycle Repairman
Bicycle Repairman's picture

Oh, so making student loans dischargable in bankruptcy was in the Republicrat platform?  I missed that.

Mon, 09/03/2012 - 19:00 | 2758884 blunderdog
blunderdog's picture

   ...there is less capital available for other uses...

If "debt" is interchangeable with "capital," it doesn't really matter, John.  There's always unlimited expansion potential for debt.

Pretty sure you've got a fallacy there.

Mon, 09/03/2012 - 19:04 | 2758891 I am Jobe
I am Jobe's picture

The Pussy Generation

The Case for Living With Mom and Dad

Mon, 09/03/2012 - 19:25 | 2758927 Revert_Back_to_...
Revert_Back_to_1792_Act's picture



Mon, 09/03/2012 - 21:16 | 2759080 Bicycle Repairman
Bicycle Repairman's picture

Just another reason housing, particularly rental housing, is in trouble.  There is no stigma living with mom and dad into your 30s.  My siblings and in-laws have some of their kids living at home and they like it.

Mon, 09/03/2012 - 19:05 | 2758894 tony bonn
tony bonn's picture

a superb thesis i have been pounding here for is racketeering operation which should be prosecuted under rico.....there are so many jobs which don't truly require a degree and certainly not 4 years yet the racketeering fucktards insist upon is more raping and pillaging by banksters and academicians....

Mon, 09/03/2012 - 19:09 | 2758898 drchris
drchris's picture

I did undergrad EE at a SUNY (State University of New York) and my MS/PhD EE at Cornell.  At SUNY, only about 5-10% of the students in my classes studied regularly.  It really was a joke.  I even remember whole computer labs worth of students who got caught cheating.  The professors were basically told not to fail students, so they all end up passing.  The ones that I am friends with on Facebook are currently unemployed or doing something really crappy.

The students at Cornell were much better.  I would guess that 40-50% of them studied regularly.  However, for every Cornell like university, there are hundreds of SUNY type schools.  I'm sure why people go to college if they have to intention of actually doing the work.  An undergraduate degree is pretty much worthless in my opinion.  

Mon, 09/03/2012 - 19:10 | 2758902 buzzsaw99
buzzsaw99's picture

An undergraduate degree is pretty much worthless in my opinion. 


doubly so an engr degree in freedumb's land.

Mon, 09/03/2012 - 19:15 | 2758913 I am Jobe
I am Jobe's picture

How about a fucking MBA? MBA's like to rape companies with process crap

Mon, 09/03/2012 - 19:47 | 2758961 Parrotile
Parrotile's picture

In the "Good Old Days" (so last century now!) requirements to get in on even an Undergrad Degree were pretty exacting, so having even an Undergrad Degree placed one firmly in the "brighter than the average schmuck" category.

If you REALLY wanted to "Get On" in life a Higher Degree was a sure fire way to the best jobs in town (Masters was good, Doctorate was Da Bomb!)

Nowadays??  seems the admission / funding stringency model has become so diluted that all you need to do is be able to fog a mirror and you're in . . . . (well if you really feel the need to do SCUBA Basket Weaving with a side portion of Mollusc Entertainment that is!)

Comparing the requirements for gaining a Ph.D. in the 1980's with those in force today is a little bit scary - some of today's efforts wouldn't have qualified as a transitional Masters in days of yore . . .

A bit like the US$ - serious devaluation I'm afraid (and that's never good when you're competing against VERY GOOD Overseas qualified candidates!)

Mon, 09/03/2012 - 19:53 | 2758974 Gully Foyle
Gully Foyle's picture


I recently watched an old episode of All in the Family. Mike had just graduated college and stated that his Bachelors was useless and he needed a Masters to do anything.

Fuck all has changed since the seventies I guess.

Mon, 09/03/2012 - 22:45 | 2759284 MeBizarro
MeBizarro's picture

You are using a line from a 70s TV sitcome episode as being in any way representative of employment/educational status?  It just a plot on a TV show.  Nothing more.

Mon, 09/03/2012 - 19:56 | 2758981 Gully Foyle
Gully Foyle's picture


Do you know the Cornell suicide solution story?

At one point in time Cornell only acepted the smartest best students. But they had a very high suicide rate. Legendary bridge jumpers. Too much pressure from the competition.

To alleviate the problem they started accepting the average students.

Still suicides but not so many.

Mon, 09/03/2012 - 20:41 | 2759085 drchris
drchris's picture

Sounds like an urban legend to me.  Cornell suicide stats have been pretty consistent at 2 per year.  Recently, there was a 3 year period where there were none, and then 6 in one year.  I attribute the suicides to: 1) the university is surrounded by beautiful gorges that are amenable to suicide, and 2) the weather is gloomy and depressing for most of the academic year.  Also, Cornell admissions become increasingly competitive each year.  The change was noticeable over the course of my time there.  I recently spoke to my old advisor, who is now a dean, and he said it's even more insane now to get into my program (this is likely also a result of the current job market).  

Mon, 09/03/2012 - 22:57 | 2759298 Cornfedbloodstool
Cornfedbloodstool's picture

I have a BS from SUNY Albany. I can say with out any doubt that it was a huge waste of time and money.

Tue, 09/04/2012 - 00:05 | 2759381 Totentänzerlied
Totentänzerlied's picture

You're telling me, $10k-$20k a year to be surrounded by low-functioning alcoholics. I'm still amazed people graduated from that school.

Mon, 09/03/2012 - 19:16 | 2758900 Mercury
Mercury's picture

Until 1976, all student loans could be discharged in bankruptcy. Until 1998, student loans could be discharged after a waiting period of five years.  In 1998, Congress made federal student loans nondischargeable in bankruptcy, and, in 2005, it similarly extended nodischargeability to private student loans. 

So, essentially they've used the condition of: >anyone who has been granted financial aid to -ANY- college< as a marker for a decent candidate for long-term debt servitude.

And you think people in Congress are dumb...

But wait! we have a program for that and/or a program that can make that debt-forever thing less of  drag!


Mon, 09/03/2012 - 19:26 | 2758931 docj
docj's picture

At a bare minimum, can we at least use your quoted paragraph to dispense with the Pleasant Fiction of the left in the US that somehow student loans became an albatros around the neck of college graduates only upon the actions of Chimpy McBushitlerBurton?

As to the subject at hand? Don't wait for or expect politicians to fix this problem that is almost entirely of their creation. Fix it yourself - dinner-table conversations like I've had with my daughter (my son is not, as they say, college material). She is now as averse to obtaining student loans as I am to co-sign them (and that's pretty gosh-darned averse, I can tell you).

Mon, 09/03/2012 - 22:51 | 2759292 MeBizarro
MeBizarro's picture

Initial bill in the 90s was pushed by a GOP Congress and signed by Clinton to limit discharge student loans in bankruptcy.  Bill in th 00s was pushed by the GOP Congress and signed by Bush. 

No one really has come up with a surefire way to control service-related costs of things liked education, healthcare, etc and acheive widespread access.

Mon, 09/03/2012 - 19:12 | 2758906 steveo77
steveo77's picture

Educators are the biggest lobbyists, hmmmm 
You wonder why higher education has tripled in cost? 
They know that without jobs, they are the only game in town, and they are controlling the market and legislative process. 
And by the way, Obama is by far the biggest recipient of this "edu bubble money", also curious how places like MIT are being used as paid pimps to promote how safe nuclear is, and to come to the conclusion that evacuating people is very stressful, therefore you should just make them sit in the radioactive waste after a major disaster, their conclusion is that overall that will be better for society. No joke, that stuff is really playing out in our world. 
Breakdown of the donations is here lobbyists-hmmmm.html

Mon, 09/03/2012 - 19:14 | 2758907 buzzsaw99
buzzsaw99's picture

if you take out student loans you are jamie's bitch bitchez.

Mon, 09/03/2012 - 19:13 | 2758910 I am Jobe
I am Jobe's picture

Not sure if one goes to College to study Underwater Basket Weaving Degree and having to take out a loan for 60K is warranted? Just sayin

Mon, 09/03/2012 - 19:21 | 2758922 francis_sawyer
francis_sawyer's picture

I took that as a PASS/FAIL course (so as to not jeopardize my GPA)...

Mon, 09/03/2012 - 19:19 | 2758916 Revert_Back_to_...
Revert_Back_to_1792_Act's picture

enact uniform Laws on the subject of Bankruptcies throughout the United States.

All those words have very specific meanings.


Mon, 09/03/2012 - 19:21 | 2758921 I am Jobe
I am Jobe's picture

Now you are funny.

Mon, 09/03/2012 - 19:22 | 2758925 magpie
magpie's picture

After QE, no bankruptcies.

Mon, 09/03/2012 - 19:20 | 2758920 I am Jobe
I am Jobe's picture

Thank goodness they can all still can go to Spring Break and have orgy parties while in school and not related to studying. The future prostitutes and Pimps are at U's.

Mon, 09/03/2012 - 19:34 | 2758941 Moe Howard
Moe Howard's picture

Future home buyers will be paying for student loans instead of mortgages.

A generation of renters and live in mom's basementers.

Mon, 09/03/2012 - 19:56 | 2758983 SilverDOG
SilverDOG's picture

Moe Howard,

Their parents signed their own homes including the basement as collateral.

Only reason -0- claims to date; real estate bottom not in sight. 

Claims will ensue at the bottom for full serfdom leverage.

Mon, 09/03/2012 - 19:35 | 2758944 balz
balz's picture

Sorry, but any calculation based on the BS CPI is BS.

Mon, 09/03/2012 - 19:36 | 2758946 dolph9
dolph9's picture

What part of "debt slavery" is so hard to understand?

Why do people think they are anything other than peons to be churned through the system?

Mon, 09/03/2012 - 19:53 | 2758975 SilverDOG
SilverDOG's picture


 Certainly hard enough for the majority.


Mon, 09/03/2012 - 19:37 | 2758950 Seasmoke
Seasmoke's picture

worthless paper just to get a worthless paper


Mon, 09/03/2012 - 19:42 | 2758953 youngman
youngman's picture

one third of these loans go to  students who actually will do something in their third goes to the party animals..they go to school...but graduate in 6 or 8 years with a Greek History or an African Arts degree or something stupid....the other  third are scammers....people who use some on line college to get the loan...and just use it like money baby....they deserve it in their minds...Judge Judy had a great example on this one two thrids of these will never get paid back...and some of them expect Obama to help them out with it...its a right to be able to go to their leftest minds...

Mon, 09/03/2012 - 19:45 | 2758958 Nassim
Nassim's picture

What's the catch? Why don't all these kids borrow like hell and then move abroad?

My apologies in advance if I have missed something there. It's just that I fail to see the attractions of living in the USA during the oncoming collapse.

Mon, 09/03/2012 - 19:46 | 2758959 Bagbalm
Bagbalm's picture

Only one way to fix it - Work will make you free!


Mon, 09/03/2012 - 19:54 | 2758966 ZeroAvatar
ZeroAvatar's picture

Schools are failing miserably nowadays.  No one knows the difference between:  Their/There, To/Too/Two, Our/Are, etc.  Or is that ect?


Some of the comments posted on ZH are so misspelled, incomprehensible, jumbled and off-topic I just skip past them rather than suffer the headache.


EG:  Reggie Middleton's latest post, in the first 5 words, mis-uses 'to' instead of 'too'.  I don't have time for nursery rhymes.


I haven't read his drivel in years.

Mon, 09/03/2012 - 20:13 | 2759018 Theos
Theos's picture

I hope you dont discount ideas because the expression uses the wrong word. Replace it with the correct word and see if the sentence is coherent. The tylers make horrible mispellings all the time, but their message is still on target. Why? Cause they're spewing content at an epic pace and they dont give a fuck.


Misuses isnt hyphenated - I dont give a fuck though.

Mon, 09/03/2012 - 21:14 | 2759124 ZeroAvatar
ZeroAvatar's picture

I'm sorry.  Mis-uses can be hyphenated if that is my intention.  I make mistakes, occasionally, and I'm quite forgiving in reading other's.


The point was, however, that students aren't even learning the basics. 


There's always going to be some Liberal viewpoint to anything I say.  I could say "Washington is a state" and some liberal would say that the 'idea' of Washington was to convey a past President's historical significance. 


When people can't bother to capitalize the first letter of a sentence, the first letter of a proper name (tylers), can't be bothered to hyphenate (cant, dont), why should they be taken seriously?  They don't take the English language seriously. Do they take anything seriously?


If they do, they sure aren't able to 'coherently' convey the message. Not to me, anyway.

Only a liberal would attempt to 'defend' illiteracy.

Mon, 09/03/2012 - 21:59 | 2759220 FerretBrain
FerretBrain's picture

Completely agree ZA!  I'm an engineer turned writer, turned trader.  I admit to being a bit of a perfectionist and having a rather low threshold for laziness and sloppiness, particularly as it applies to anything I choose to read.  Just because you make an occasional spelling or grammatical error does not necessarily invalidate the content of your message.  However, too many people have lost sight of the FACT that if you write like a slacker, many readers will see the sloppiness and carelessness that you apply to your message and will (in many cases) rightly assume that the message is as full of holes and sloppiness as the writer has shown in the composition of the message.  If you want to be taken seriously, apply some self-respect and care to the creation of the message.  It's good advice for all of us and it is disturbing the degree to which it is not applied to the writing skills across the spectrum of content from published material to periodicals to online commentary.

This from a former engineer -- a profession that has always been accused of not having good communication or writing skills.  Go figure...

Mon, 09/03/2012 - 19:51 | 2758968 SilverDOG
SilverDOG's picture

No bankruptcy.

Just more tax based bank bailout, with bonuses!


Now hiring student debt collectors.

Mon, 09/03/2012 - 19:56 | 2758972 TicoTiger
TicoTiger's picture

The college loan program is really a beautiful part of cradle to grave middle-class sheeple care, if you think about it logically. First, dumb down the parents with non-stop mindless television programming, being careful to leave none of their children behind. Feed them good quality Monsanto products, mix in neat pharmaceutical vaccines and meds, then convince everyone of the need for higher education. Lend them the money (just sign on the dotted line kiddies) and they get to take really important courses like gender equality and global warming. Once they have their Doctorate in basket weaving or equivalent they can spend the rest of their lives working at Wendy's or Mac's to (never) pay back the loans, which obviously maintains the service economy just fine. 

Of course for lower class kids living in the projects, the education program is a bit simpler. The local pusher gives the little girls some free crack. After a couple of weeks, they won't mind meeting the pusher's grownup friends. If they are lucky enough to reach 20 without dying of AIDS or being sent away to prison they can also work in Wendy's or Mac's to suppliment their welfare income.

Mon, 09/03/2012 - 22:54 | 2759296 MeBizarro
MeBizarro's picture

Gross overgeneralizations but I get what you are saying.  You really think the world would be a better place without vaccines and antibiotics though? 

Mon, 09/03/2012 - 20:03 | 2758997 Theos
Theos's picture

Can someone explain how debt fits with liberty?  Where is the optimal cuttoff where debt is wiped out? Where is it today?

I've never been in debt because its scares the shit out of me, but i've likely forgone wealth as a result. My gut feeling is that it's bullshit.

Mon, 09/03/2012 - 20:37 | 2759078 Zgangsta
Zgangsta's picture

You should carry as much debt as the amount of money that you can afford to lose in an instant without losing a wink of sleep over it.

Mon, 09/03/2012 - 20:06 | 2759000 Zgangsta
Zgangsta's picture

Inflation is hitting college degrees as well.  A Masters degree today is worth about what a Bachelors degree was worth 20 years ago...which is worth about what an Associates degree was worth 20 years before that...which is worth about what a high school degree was worth 20 years before that.

So people having kids today need to be prepared to spend or borrow a million dollars so that they can get their Doctorate to find an entry level job.

Mon, 09/03/2012 - 20:14 | 2759019 intric8
intric8's picture

How will it be when elementary school kids get into the college system? The bubble is getting out of control as it is.

Mon, 09/03/2012 - 22:47 | 2759286 msjimmied
msjimmied's picture

Wait till they privatize ALL schools. That's the republican wet dream, on the hook from the first day you set foot into a school. 

Mon, 09/03/2012 - 22:58 | 2759300 MeBizarro
MeBizarro's picture

The GOP wet dream is to privatize all primary education because there are hundreds of billions of revenue annually there potentially in the US.  Basically give people a low-level voucher that supports a minimum level of education but isn't anywhere near enough to get in to an expensive religious or private school with small class sizes, robust resources, and excellent teachers. 

Mon, 09/03/2012 - 20:14 | 2759020 EscapingProgress
EscapingProgress's picture

I'm in my last year of college now...what a fucking mistake. I could have learned to weld instead and been making great money in North Dakota for an oil company by now. The only things I'm taking away from my college experience are debt and liver damage.

Mon, 09/03/2012 - 20:26 | 2759053 TicoTiger
TicoTiger's picture

At least you are learning the game you've been suckered into at an early age. Most people never have a clue about how their pathetic little lives have been planned out for them. Welding is good. In any case, the best thing is to stop playing their game and start playing yours. Good luck and God Bless.

Mon, 09/03/2012 - 21:15 | 2759132 dogbreath
dogbreath's picture

I'd bet any employer hiring welders would laugh their ass off if you walked in and said "I quit colledge to become a welder."  with the money you make a s a welder you will have a fine library and be able to afford your internet connection     <---- 600 welder jobs

Mon, 09/03/2012 - 20:20 | 2759034 yogibear
yogibear's picture

With a 4 year  undergraduate degee costing over $100k  failure of payment of loans is assured.

In-state Michigan:


Mon, 09/03/2012 - 20:28 | 2759057 Zgangsta
Zgangsta's picture

Colleges need to offer courses on how to marry a rich person.

Mon, 09/03/2012 - 20:44 | 2759087 Gromit
Gromit's picture

Or retired govenrment worker with six figure pension.

Mon, 09/03/2012 - 20:24 | 2759045 Stuck on Zero
Stuck on Zero's picture

Smart students will simply run up all their education bills on their credit cards.  They can default on those.

Mon, 09/03/2012 - 21:04 | 2759118 Conman
Conman's picture

My first college CC had a 200$ limit. Maybe that shows my age but either way there is no way for a student with no credit to be able to do this. Only way is to have the parent cosign and then they are on the hook.

Mon, 09/03/2012 - 20:29 | 2759061 Peter Pan
Peter Pan's picture

As Benjamin Franklin once remarked about a parent mulling over whether to send their son to Harvard:

"Most of them consulted their own purses instead of their children's capacities."

I seriously have reservations not only about the ability of students, the capacity of the system to cater for more than a certain number of graduates, the business model of most of these colleges but even more so I have doubts about the capabilities and motivations of the teaching staff in higher education.

Is there anything in the USA that debt has not touched and wrecked?

Mon, 09/03/2012 - 20:40 | 2759081 LMAOLORI
LMAOLORI's picture



Anyone who is for people being able to write off the student loans guaranteed by the Federal Government in bankruptcy is FOR further enslaving their own children.

Mon, 09/03/2012 - 20:46 | 2759090 Gromit
Gromit's picture

They hired the money didn't they?

Calvin Coolidge c.1921.

Mon, 09/03/2012 - 20:49 | 2759094 FieldingMellish
FieldingMellish's picture

Took my son to his university yesterday (today I feel like I've lost my right arm...). All paid for, no loans. Many of the kids seem to think they are there for a good time and that "education" is just an extra-curricular. Every other parent was lugging a beer fridge into the dorms. I would estimate that less than half were serious students. There also appears to be a bit of a 'spend money" culture these days. Fine if its your money but not so good if its someone else's. Whatever happened to the "poor college student"? 50" flatscreens in common rooms, WTF? 

Tue, 09/04/2012 - 08:29 | 2759746 PrDtR
PrDtR's picture

Daughter wanted to study some low prospect major .. Anthropology +Dance.. very low potential.. I said YOU will pay for it!  She did!!!

Son went to Air Force, just finished basic training and is being PAID and preparing for his future w/o student debt!

At least I'm not in debt and my children can't say I "forced" them into a career they didn't choose!

2 down 2 to go!

Have my right arm and hand on my WALLET!

Mon, 09/03/2012 - 21:14 | 2759131 squexx
squexx's picture

Thank God I only owe $60,000 on my BA in Gender Studies!!!!

Mon, 09/03/2012 - 21:29 | 2759158 greenEagles
greenEagles's picture

Ironic isn't it? That the capital that could have been used to hire these kids was instead used to build larger athletic facilities, new dorms, libraries, etc. Add on top of that an older generation that's living and working longer and your left with no room in the workforce for these youngins whose main skill-set falls under the categories of beer pong and Call of Duty.

Mon, 09/03/2012 - 22:37 | 2759165 Radical Marijuana
Radical Marijuana's picture

The younger you are, the more you are being lied to, cheated and robbed by the political system you were born into.

I offer that mantra, based on intergenerational national financial accounting, and even more so when based on an attempt at global ecological accounting, (where everything has been high-graded to hell), as a generalization, that is surely true for at least 90% of the population, that is not going to inherit any significant assets whose ownership was accumulated in the past. In every way, according to every statistic I know about, that is true ...

I am old enough that the first computer I saw was as big as a stove, and took punch cards. Therefore, my student loans, and other youthful follies, were never on computer records, and so, have been lost to time, and so, nobody can find them now ... Therefore, for all practical purposes, those things no longer exist. However, today, with archived computer records, the past remains accessible. Thus, students are burdened by things FOREVER ... without the passage of time to make it better, and provide distance, and for things to be forgotten or forgiven.

In every way that I am aware of, life for young people today is way, way worse. At least, when I was younger, it was possible to maintain delusional optimisms and idealisms, which are natural to youth, since it FEELS that way in their bodies. Today, despite the innate good health and therefore, good spirits that youth tends to enjoy, the objective facts are a runaway to hell!  It is one of the social symbols of that situation that they no longer can declare bankruptcy under bigger than ever student loans. The millstone of their past is welded around their necks. They are BORN deeper into social debts, since the entire money-debt-system surrounds them from day one ... If they do not inherit wealth, then the ONLY thing they are inheriting is overwhelming social debts, which are practically unrepayable. Like so many other trends which are headed towards their breaking point, youths today, under desperate unemployment statistics for their group, have no better choices but to go to school, which is something they still can do. Basically, society is giving them the choice of acting like it does, which is party today, because tomorrow may never come. Inside of a runaway money-as-debt system, the most successful strategy is to go into debt, no matter how insane that overall system must EVENTUALLY become.  Since our whole society runs on money made out of nothing as debts, and the first in line to take advantage gain the most from indulging, young people are being driven to participate, by being herded on all other sides to have no better alternatives.

They maybe will live long enough to go through some crazy transformations, regarding those runaway debt insanities, but that is no fun to imagine either!  Since the total USA debts have been on a near perfect match to the mathematics of exponential growth for the past several decades, and there comes a point, eventually, when the FACT that endless exponential growth is absolutely impossible MUST MANIFEST, the younger you are then the more likely you will live long enough to witness the biggest bust there has ever been, following upon the biggest boom there ever was!

As things appear to pick up speed faster and faster, I am even beginning to suspect that I might live to see that too ... which is something I always knew was theoretically possible, as a mathematical abstraction, but never expected to live long enough to actually see.  I used to believe it would be several more generations before the crazy collapse into chaos happened, due to our civilization being based on frauds ... but now, I am beginning to feel that is much nearer than I used to believe.  IF SO, then my mantra above is even more true than ever!

The fundamental "malinvestment" insanity flows from the fact that young people are enslaved by "loans" which created the money they were lent out of nothing, but their promise to repay. Students are being steamrollered by the basic bankster scam!

Some more factoids: Approximately two-thirds of all college students graduate with student loans. The total student loan debt in the United States is increasing at a rate of approximately $3,000 per second. The single greatest "asset" of the Federal government is the student loans that students owe to their government!

In other words, enslaving youth is the number one thing that the Federal government is actually doing, because the Federal government is controlled by the banksters, who have been enslaving everyone into their runaway fraudulent systems, and the younger you are, the more you are being enslaved into the established runaway debt insanity systems. Student loans are not a big deal in absolute terms, but they are one of the most symbolic of the runaway social insanities destroying America!

Mon, 09/03/2012 - 21:37 | 2759178 proLiberty
proLiberty's picture

Not only is capital being malinvested, but young people are being induced to throw years of effort into a particular career choice that may totally mismatch the job market when they finally achieve their credentials.  This is showing up in a tremendous shortage of people with manual skills and an overabundance of people who want to work in an office pushing paper, or worse, thinking of new regulations to enforce on the people who employ those with manual skills.

Mon, 09/03/2012 - 22:03 | 2759229 Let The Wurlitz...
Let The Wurlitzer Play's picture

All the endebted idiots that owe student loans should file a class action against their respective universities for the balance of dept outstanding.  They should make the socialist dipshits that peddle these useless educations liquidate their endowments and properties till the deficit is satisfied.


Mon, 09/03/2012 - 22:14 | 2759240 shovelhead
shovelhead's picture


My kid took the balance of his scholarship grants to buy silver.

His used textbooks look like they were dragged around campus for a few years but his silver is nice and new.

The only thing better than free money is using it to make more money.

Smart kid.

Tue, 09/04/2012 - 03:13 | 2759493 Radical Marijuana
Radical Marijuana's picture

When I was going to school, I used to take all my student loan money and use it to buy pounds of marijuana, which I would then resell as ounces. Never got caught, had a great time! After a decade, however, I finally quit doing that when making the money finally felt like it became primary, and was no longer radical fun, like it was before. However, during that time I made a much nicer profit than anything else I could have done, back then.  But, these days, I would buy silver instead!

P.S. These days, I have stopped consuming cannabis, because I have become 100% too objectively depressed by what I expect to actually happen, i.e., economic collapse, war and martial law.  I wish I could time warp back to when I did not yet believe that. Today I have not a shred of optimism or idealism left, and so,  I find can not get high anymore like I used to.

Mon, 09/03/2012 - 22:28 | 2759259 Sizzurp
Sizzurp's picture

I imagine that eventually the 1 trillion USD of student loan debt will end up printed away, eaten by everybody in the form of inflation.  It's a shame that the bankers and gov thought it was such a good idea to provide student loans to begin with since we probably would have a far more efficient, affordable, and valuable unversity system without the subsidies.  Abundant credit corrupted the higher educaiton system to the point where college football coaches are some of the highest paid people on earth. $200 textbooks expire after one year with publishers providing kickbacks to the institutions.  If the students themselves were the payers, you could be sure that colleges would be forced, by free market competition, to provide an education that actually gave them marketable skills at a reasonable cost.  I don't see the current system lasting much longer. 

Tue, 09/04/2012 - 00:27 | 2759401 dwdollar
dwdollar's picture

"I don't see the current system lasting much longer."

A lot of people have been saying the same thing for years now. I wouldn't care to make a bet on it. All of Uncle Scam's programs will keep on growing as long as he's able to print without impunity. We passed the point of stupid a long time ago.

Never underestimate the power of stupid people in large groups. ~George Carlin

Tue, 09/04/2012 - 03:40 | 2759508 Radical Marijuana
Radical Marijuana's picture

AFTER the right to create money out of nothing is given away, i.e., after counterfeiting is legalized, then the people who can do that find every possible excuse they can to make more ... e.g. credit cards, e.g. subprime liars loans, and so on, throughout the entire domain of derivatives, which are simply gambling with chips legally made out of nothing, to place bets with ... which therefore became an ultra-enormous cybercasino, whose proportions are practically impossible to imagine.  The trillion dollars in student loans are NOTHING compared to the hundreds of trillions in derivatives!

I have no doubt that the system will eventually collapse. However, what keeps it flying is the inconceivable size of global fiat money electronic frauds, backed by atomic weapons.  WHEN that finally collapses, I expect the books to be balanced by the blood of billions of people.  That is why the collapse keeps on being postponed, as long as possible! The biggest bust followed by the biggest boom is when the total human population and human activities collapse by about half ... so far, nothing like that has happened, and none of us can imagine it happening.

However, the financial numbers are completely insane, and the mathematical abstractions indicating collapse to chaos are intellectually compelling. We are inflating the most astronomically sized bubble, and when it pops, then I expect that billions of people are probably going to die in horribly miserable ways.  That is the down side to electronic fiat money fraud backed by atomic bombs.  It is possible to build that house of cards pyramid scheme up and up, until it goes around the dark side of the moon.  The sheer insanity of it is what keeps in going.  It is like the Cold War preventing Hot War ... we hope, for as long as possible ... But, meanwhile, that enables the frauds to get astronomically bigger and more insanely disporportioned. We keep on getting closer to economic collapse and world war than ever before!  Only the total insanity of starting world war has spared us before, however, the real world appears to me to actually be getting more and more insane all the time, since it IS being controlled by bigger lies, backed up by more violence, all the time!

Therefore, I sympathize with youths who borrow student loan money, and use it to party.

Tue, 09/04/2012 - 21:20 | 2762883 PhilofOz
PhilofOz's picture

Well the bigger the pyramid the more psychopathic those are that ooze their way to the top, from the leaders of governments to the CEOs of almost any company/institution you care to name. What you suggest is almost inevitable

Mon, 09/03/2012 - 23:50 | 2759357 HungrySeagull
HungrySeagull's picture

We'll keep plugging away on the montly number. It's so low it's not worth paying off.

Fuck it. Seriously... fuck it.

All of this is going to come crashing down one day. And when it does become dischargeable, the Courts will be buried in mountains of paper first hand.


Death is not so bad considering the hell waiting those who still have a phone line to be spammed and hounded by the Government Lenders.

Tue, 09/04/2012 - 00:45 | 2759422 My Days Are Get...
My Days Are Getting Fewer's picture

This is the way of the future - free basic education on-line.


Now, no kid inhigh school has any excuse not to learn the basics.

In a few years, all basic college course will be available on line for free.


Tue, 09/04/2012 - 08:48 | 2759801 Shizzmoney
Shizzmoney's picture

Potential students would have to think harder about the decision to study, and be able to justify to themselves and to a lender why they are choosing to study (or why they are choosing to study a particular subject), instead of choosing to work, or choosing to start a business.

The thing is, students are DOUBLING DOWN on education on Master Degrees and such, thinking that the environment is going to get even MORE competitive than it is.

I'd LIKE to start a business.  I'd LIKE to work.  But if you can't find neither, you can't just sit on your ass.  Might as well double down on more education to change the cache you get at interviews or for investment capital.  But again, not sustainable, because what if things get worse? 

The shit isn't sustainable.  Someone is goign to ignite a flame they won't be able to control with this quest for rentiership by our "creditors".

Tue, 09/04/2012 - 12:50 | 2760860 marathonman
marathonman's picture

It took me forty years of life to finally come the realization that everything I thought I knew was a lie.  The money system, politics, media, the legal system.  I was a lifelong Republican and finally came to realize that all the platform of personal responsibility was BS.  The RNC doesn't really believe it and when given the chance to select leaders that will push the agenda of responsibility / free markets / sound money, they subvert, lie, cheat, and slander that candidate.  The DNC is worse in policy but at least is honest enough that their end goal is everyone on the dole.

Even the slogan I used to like, 'Freedom isn't free' was subverted to support a cock-a-mamy endless war that has accomplished nothing, wasted thousands of young mens lives, bankrupted this nation, enriched the war and banking machines that run it, and hastened the inevitable collapse of this far-flung rotting empire of lies. 

We'll see what the real outfall will be.  When someone like me realizes he has been living in the Matrix and starts seeing the conspiracy right in front of me then time is truly running short that the illusions can be maintained.  Quite frankly I am still amazed that the whole Ponzi based financial system hasn't imploded yet. 

Tue, 09/04/2012 - 15:46 | 2761554 neutrinoman
neutrinoman's picture

It's not just that student debt is non-dischargeable. As in the case of subprime mortgage lending, a bad choice was made back in the Clinton years, to fabricate an ersatz middle class by getting people into deep debt to buy the trappings of middle class life, without the substance. Student debt exploded, large numbers of students who shouldn't have been in college (at least not at that age and stage in life) went to college, and colleges took advantage by adding a vast number of non-academic (or anti-academic) missions, mandates, and features to college life that have grossly inflated its costs. Meanwhile, the rise of PC has ensured the decline of standards and makes it clear to all in academia that public criticism of the new order by faculty or students will be squashed. (No one in academic administration criticizes, as college and university administrations are the main beneficiaries of the trend.)

The roots of this go back to the LA riots of 1992. The political class panicked, seeing the rising level of income and wealth inequality since the end of the 60s, and decided to go the route of making credit ever cheaper and easier to get. The focus of the Clinton administration became mortgage and student lending, with Congress passing the needed changes to the law and the Fed supporting a release of most traditional constraints on credit creation and standing ready as an enabler and rescuer. Many of these people are back under Obama, and the Republicans put up only weak resistance. The final straw was Obama's nationalization of most student lending, artificially depressing the interest rate (sound familiar?) and enabling a a new explosion of student debt since 2009. Almost all of the expansion of consumer credit since 2009 has been student loan debt.

Mon, 09/10/2012 - 01:02 | 2777635 Radical Marijuana
Radical Marijuana's picture

And more icing on the cake of the insanity of student loans, which are owed to the USA Federal government can be collected by agencies that have full Federal powers!

Like had I said many times before, this IS one of the most symbolic stories about how the banksters, that controlled the Federal government of the USA, are enslaving and destroying the future of USA youth!

... Unlike private lenders, the federal government has extraordinary tools for collection that it has extended to the collection firms. Ms. Cordeiro has already had two tax refunds seized, and other debtors have had their paychecks or Social Security payments garnisheed. Over all, the government recoups about 80 cents for every dollar that goes into default — an astounding rate, considering most lenders are lucky to recover 20 cents on the dollar on defaulted credit cards. ...

With an outstanding balance of more than $1 trillion, student loans have become a silver lining for the debt collection industry at a time when its once-thriving business of credit card collection has diminished and the unemployment rate has made collection a challenge. ...

In 2010, Congress revamped the student loan program so that federal loans were made directly by the government. Before that, most loans were made by private lenders and guaranteed by the government through so-called guarantee agencies. ...

While some in the industry, ... worry about public revolt over aggressive collection tactics, there is no holding back at this point. ...

Patrick Writer of Redding, Calif., received a certificate in computer programming in 2008 from Shasta College, a community college. But he graduated in the midst of the financial crisis and has not been able to find a job as a programmer. He defaulted on $12,000 in federally backed loans in 2009.

“If you can’t make your utilities and your rent, your student loan payments are almost goofy, inconsequential,” said Mr. Writer, who is 57.

But Mr. Writer said he had come to realize what it meant to have a student loan that was guaranteed by the federal government. “It’s the closest thing to debtor prison that there is on this earth,” he said.

Lindsay Franke, of Naugatuck, Conn., is among the borrowers taking advantage of income-based repayment. While her monthly payment is now lower, Ms. Franke, who is 28 and has a master’s degree in business administration from Albertus Magnus College, said the program had not changed a crushing reality: she still owes too much money and makes too little to pay it off. A marketing coordinator for a law firm, she filed for bankruptcy last year because she could not afford her mortgage, car payment and student loans. She lost the house, but still owes $115,000 in student loans, both private and federal. Under income-based repayment, she pays $325 a month on her federal loans; she also pays $250 a month on her private loans.

“I will never have my head above water,” Ms. Franke said.


Thus, the endless flow of fiat money made out of nothing, will continue to be used by evil governments to enslave and to destroy the future of the country they govern!

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