This page has been archived and commenting is disabled.

Student Debt Bubble Delinquencies Surge

Tyler Durden's picture


By now, the bubble in student loans is becoming more widely understood. The absolute level continues to rise significantly and growth is accelerating with 8% YoY growth just reported, via the WSJ. Of course the reasons are anathema but attending college on the back of hope of a better-paying job when everyone else is also attending college in that hope (thanks to endless student-loan funding from your helpful government) seems to be self-defeating as the supply of supposedly better-qualified workers into a stagnant economy will do nothing but reduce higher-end wages further? Of course this is over-simplified but as the rest of the country delevers, pays down credit cards, or BKs, those that remain jobless heading to college for a way out are now struggling also - as is clear from WaPo this last weekend where dropout rates are increasingly dramatically. What is more worrisome is that while every other class of debt, according to the New York Fed's data, is seeing delinquency rates dropping, Student Loans 90+ days delinquent surged in Q1 to 8.7% - near its peak crisis highs and remains above peak mortgage delinquency rates.

Student Loan Debt is growing while the rest of the household sector is delevering...

But pressures from repayments and the debt overhang causing dropout rates to soar...

but even as the supposedly better-educated leave college, jobs are few and far between and delinquency rates are surging - even as every other form of household debt sees lower delinquency rates...

and from the NY Fed:

The New York Fed also released historical student loans figures, by quarter, dating back to the first quarter of 2003 as part of this quarter’s report. These data show that student loan debt has substantially increased since 2003, growing $663 billion. Outstanding student loan debt surpassed credit card debt as the second highest form of consumer debt in the second quarter of 2010.


Student loan debt continues to grow even as consumers reduce mortgage debt and credit card balances,” said Donghoon Lee, senior economist at the New York Fed. “It remains the only form of consumer debt to substantially increase since the peak of household debt in late 2008.”


Additionally, 90+ day delinquency rates for student loans steadily increased from 6.13 percent in the first quarter of 2003 to its current level of 8.69 percent. They remain higher than that of mortgages, auto loans and home equity lines of credit (HELOC).

Is it any wonder the youth are disillusioned as they become the new middle class, with little opportunity and instead of a mortgage, a huge student loan around their necks? Perhaps all those calling for a housing bottom should consider who the bottom of the rung first-time homeowner is and how much more debt they are starting with now before calling the 'all-clear'.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 05/31/2012 - 13:26 | 2480310 mrktwtch2
mrktwtch2's picture

you knew what your were signing and its your own fault for not getting a marketable major..

Thu, 05/31/2012 - 13:27 | 2480317 rumblefish
rumblefish's picture

I'm gonna make it big with my humanities major. Look out world!

Thu, 05/31/2012 - 13:38 | 2480374 Manthong
Manthong's picture

How much student debt did the Stoner-In-Chief, Barack Choombama pile up to get his PhD?

Thu, 05/31/2012 - 13:46 | 2480424 lemonobrien
lemonobrien's picture

i believe he used affirmative action.

Thu, 05/31/2012 - 13:50 | 2480435 flacon
flacon's picture

Honorary degree's are free, especially Nobel Peace Prizes. Intellectuals love prizes. And letters after their name.

~ Flacon, MA, BSc, PhD, CPA. 

Thu, 05/31/2012 - 13:51 | 2480452 Pladizow
Pladizow's picture

What % of student loans are paid off?

Thu, 05/31/2012 - 13:57 | 2480481 metastar
metastar's picture

Slave College.

Go to college. Be a good debt slave.

Thu, 05/31/2012 - 13:58 | 2480491 flacon
flacon's picture

Harvard University: rejected commercial

Thu, 05/31/2012 - 16:13 | 2480580 The Big Ching-aso
The Big Ching-aso's picture



Becoming delinquent on student loans prepares U 4 real life after U leave your parents house during your 40's.

Thu, 05/31/2012 - 17:01 | 2481166 Ahmeexnal
Thu, 05/31/2012 - 14:29 | 2480658 Dingleberry
Dingleberry's picture

cool vid flacon....

Thu, 05/31/2012 - 13:47 | 2480429 UP Forester
UP Forester's picture

None.  It, and all the "field work" in the AfPak region was paid for by the CIA....

Thu, 05/31/2012 - 13:53 | 2480464 BandGap
BandGap's picture

He got a JD (law degee), not PhD.

We'll never know what his grades were at any college he attended, much less who backed him financially.


Thu, 05/31/2012 - 14:57 | 2480752 Manthong
Manthong's picture

At least we have documentation of his exceptional "roof hits" and "Total Absorption" school performance.

I wonder if there are Harvard Law School case studies that covering those subjects.

Thu, 05/31/2012 - 13:39 | 2480383 FlyoverCountryS...
FlyoverCountrySchmuck's picture

If you have a degree in Gay/Lesbian Hispanic Lit., and $90K in College debt, you might be an Obama voter....

Thu, 05/31/2012 - 13:51 | 2480448 lemonobrien
lemonobrien's picture

i like reading pornography 

Thu, 05/31/2012 - 14:15 | 2480588 flacon
flacon's picture

...what, like John Maynard Keynes' "General Theory"? It is truly orgasmic!

Thu, 05/31/2012 - 15:09 | 2480797 MachoMan
MachoMan's picture

like braille pornography or what?

Thu, 05/31/2012 - 15:14 | 2480819 lemonobrien
lemonobrien's picture

like "two hispanic lesbians and a gringo."

Thu, 05/31/2012 - 17:01 | 2481165 Id fight Gandhi
Id fight Gandhi's picture

New ABC sitcom?

Thu, 05/31/2012 - 13:51 | 2480450 bdc63
bdc63's picture

... might? ...

Thu, 05/31/2012 - 13:54 | 2480460 Winston Smith 2009
Winston Smith 2009's picture

Stupidity is not the exclusive characteristic of stereotypical Democratic voters, but it is the domain of anyone who continues to believe in and vote for either of the major political parties.  They are both owned, just not by you.

Thu, 05/31/2012 - 13:55 | 2480473 crawldaddy
crawldaddy's picture

if you are a window washer with a lottery ticket and think you are going to make it big, you may be a republican

Thu, 05/31/2012 - 14:13 | 2480578 El Tuco
El Tuco's picture

Where does one get that degree... Harvard?

Thu, 05/31/2012 - 13:54 | 2480467 Cone of Uncertainty
Cone of Uncertainty's picture

Three humanity majors didn't like your comment.

Thu, 05/31/2012 - 16:41 | 2481102 Poetic injustice
Poetic injustice's picture

You can make big in Greece or Spain, telling that food is not all that important, but 17th century French artists are.

Thu, 05/31/2012 - 13:28 | 2480323 ACP
ACP's picture

Juvenile turned adult delinquencies bitchez!

Thu, 05/31/2012 - 13:30 | 2480343 wolfnipplechips
wolfnipplechips's picture

Why worry about mounting student loan debt when Barry and tribe will just bail them out.  Free money bitchez!!!

Thu, 05/31/2012 - 13:37 | 2480366 dwdollar
dwdollar's picture

And give them freedom from debt slavery with no strings attached? Not going to happen.

Thu, 05/31/2012 - 13:37 | 2480372 FlyoverCountryS...
FlyoverCountrySchmuck's picture

The Messiah has spoken. College should be FREE, so why should these people bother paying for student loans?

Thu, 05/31/2012 - 13:42 | 2480407 youngman
youngman's picture

That is exactly what they are thinking...that Obama will bail them out....they have no plans and never did of paying this back...these are the tokk 10 year for a 4 year liberal arts majors....the party boys and girls...the Choombas......

Thu, 05/31/2012 - 13:47 | 2480431 LetThemEatRand
LetThemEatRand's picture

If they took 10 years for a 4 year degree, they must have also been psychic if they were expecting O to bail them out.   

Thu, 05/31/2012 - 17:02 | 2481169 Id fight Gandhi
Id fight Gandhi's picture

Tribe won't bail anyone out but their own.

Thu, 05/31/2012 - 13:41 | 2480404 AL_SWEARENGEN

The US is backwards these days.  Judge Moriarty sentances this girl to jail and fines her for be truant as she works two jobs and goes to school full time.  These cocksuckers are OUT OF CONTROL.

Thu, 05/31/2012 - 13:59 | 2480496 LetThemEatRand
LetThemEatRand's picture

What a shock.  The judge is a "law and order" guy.  "With a successful tenure in law enforcement including 21 years with the Houston Police Department and 10 years with the Montgomery County Sheriff’s Department, Judge Moriarty reminds himself daily, “I am a human first and a law enforcer second.”


Thu, 05/31/2012 - 15:35 | 2480895 pods
pods's picture

If you have to tell yourself that on a daily basis, you are a sociopath.


Thu, 05/31/2012 - 14:04 | 2480525 LetThemEatRand
LetThemEatRand's picture

And he's a classic "do as I say, not as I do" guy as well.


Thu, 05/31/2012 - 14:21 | 2480622 HarryM
HarryM's picture

Hey we're stealing their futures , they're just stealing a little back.

We're all screwed anyway - Go for It!!

Thu, 05/31/2012 - 13:30 | 2480331 LawsofPhysics
LawsofPhysics's picture

I am sure the lenders (paper-pushers) were "forthcoming" about all the details.  Besides, "risk" is something that is to only be shouldered by those who cannot afford to buy a congressional seat.  FAIL.

Thu, 05/31/2012 - 13:47 | 2480427 Ahmeexnal
Ahmeexnal's picture

Travis, you are only half right. Paper pushers are like drug pushers. Those weak of mind fall for the illusion.
Sadly, young people are easy prey to those who claim only "experts" are allowed to run the show, thus they plunge head first into the hellish pit of debt serfdom in order to obtain a fiat paper that claims they are certified "experts" in the dog and pony show.

Thu, 05/31/2012 - 14:15 | 2480569 LawsofPhysics
LawsofPhysics's picture

Who is Travis?  Unfortunately in the physical sciences one does actually have to be trained, now you don't actually expect those private corporations who profit from the labor of those engineers to actually pay for it now do you?  Compensation for valuable labor is what this is all about, period.  If the monetary system itself has no accountability then this becomes impossible.  That is where we are and shall remain until the rule of law and contracts is restored, period.

Thu, 05/31/2012 - 14:21 | 2480625 Ahmeexnal
Ahmeexnal's picture

There you go. You nailed it.
Trained monkeys is what we have at the helm.
You can't "train" people to think and innovate, only to obey and follow like a lemming.

Thu, 05/31/2012 - 14:25 | 2480646 LawsofPhysics
LawsofPhysics's picture

Once again, you prove to be the idiot that you are.  Someone else want to explain to this moron that you can't actually innovate anything if you can't even do simple math, I have work to do.  The only lemming around here is you.

Thu, 05/31/2012 - 14:46 | 2480710 GeezerGeek
GeezerGeek's picture

The proponents of AGW working for the IPCC seem to have been trained to suck on the government teat. Whether they were trained in real science is quite something else.

Thu, 05/31/2012 - 14:09 | 2480558 MachoMan
MachoMan's picture

the only "detail" that might be unknown or that should have been made incredibly clear was the nondischargeability of the debt...  other than that, a lender has no duty to warn you of ill economic conditions... 

Thu, 05/31/2012 - 14:14 | 2480586 LawsofPhysics
LawsofPhysics's picture

...that the lender creates.  - FIXED.    Restore the fucking rule of law and contracts already.

Thu, 05/31/2012 - 15:11 | 2480803 MachoMan
MachoMan's picture

the lender is not vested with that responsibility...  or, even if it is, that does not discharge the responsibilty to pay nor whether a contract was formed...  [note, the lender is responsible for payment of the debt to third parties].

Thu, 05/31/2012 - 15:30 | 2480876 LawsofPhysics
LawsofPhysics's picture

you misunderstood.  The lender was intentionally driving the economy into the ditch (while making the loans and betting against other loans - housing) by knowingly viotating 200+ years of contract law.  Bull fucking shit the lender has "no responsibility".  Have not even mentioned "due diligence".  Gee, you act suprised that people are doing whatever the fuck they want in an environment were there is no rule of law.  Shit, I though "machoman" was tougher than that.  Guess I was wrong.

Thu, 05/31/2012 - 16:34 | 2481080 MachoMan
MachoMan's picture

There isn't one (1) single lender...  same with mortgages... 

And yes, the rule of law has been perverted...  but, of course, the rule of law has always been about protection of certain persons, not particularly about the sanctity of the human spirit nor right for right's sake...  in this context, I think "no rule of law" means that capital formation is virtually impossible...  which is correct.

The game is about changing the law to legalize your behavior...  and there are some players that are really, really good at the game.

Thu, 05/31/2012 - 16:41 | 2481103 Panafrican Funk...
Panafrican Funktron Robot's picture

I dated a hot girl back in the day a few times, but she turned out to be a real snarky bitch.  

Thu, 05/31/2012 - 14:19 | 2480604 Zero Govt
Zero Govt's picture

and so another debt bubble/mountain begins to crumble

still we've been through it all before 2007-2008, gets easier with all the practice right?!!

Thu, 05/31/2012 - 14:22 | 2480635 LawsofPhysics
LawsofPhysics's picture

been going on slightly longer than that.  went through it in the 70's 80's, 94, 2001, 2008, 2012?  notice the shortening period?  So long as fraud remains the status quo, paper burns.

Thu, 05/31/2012 - 19:18 | 2481686 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

I suppose if said college student didn't have too much in bills, your best bet would be to pay it off via credit cards, try and slump by for 3 yrs on min pmts and then go the BK route. Over and out.

That said, I think it's stupid and arbitrary to have a certain class of loans be utterly undischargeable. Of course, I'm of the mind that full ride scholarships should be the norm-- but those students demonstrate very high academic standards and we don't care about your appearance, social standing, etc. If you're a C student and want to buy your way in, sure, go ahead, but only if there's room after all of the academic high-achievers are in. So, no footballers, no "I'm from XXXXXX minority" allowances, etc.

Thu, 05/31/2012 - 13:33 | 2480339 dwdollar
dwdollar's picture

"Of course the reasons are anathema but attending college on the back of hope of a better-paying job when everyone else is also attending college in that hope (thanks to endless student-loan funding from your helpful government) seems to be self-defeating as the supply of supposedly better-qualified workers into a stagnant economy will do nothing but reduce higher-end wages further?"

What part of that didn't you read or understand?

No major is a sure bet. What matters most are crony connections and a willingness to work for Uncle Scam or one of his corporate welfare queens.

Thu, 05/31/2012 - 13:39 | 2480389 Gully Foyle
Gully Foyle's picture


"No major is a sure bet"

Some majors are more likely to land one a job, say Engineer. I hear mining Engineers are in short supply.

About twenty years ago I met a chick getting a doctorate in Italian literature. Back then I thought it was a truly niche degree, but hey she had the chance to land a job.

Now that degree would be a waste of wall space and she would have been better off graduating from McDonalds college.

The problem is people are still advising young adults to receive degrees in literature and modern dance.

Then again most just don't have the Math skills for a dgree that will eventually lead to a real job.


Thu, 05/31/2012 - 13:48 | 2480428 dwdollar
dwdollar's picture

I won't borrow a dime to finish my Electrical Engineering degree. Not unless I have some guarantee for employment after graduation. Not gonna happen though... and why should it? Companies already have more engineering graduates than they need.

Thu, 05/31/2012 - 13:49 | 2480439 Gully Foyle
Gully Foyle's picture


Why would you borrow? Pay out of pocket and go part time.

I know a number of people who do that.

Most are late in life learners.

Thu, 05/31/2012 - 13:52 | 2480447 dwdollar
dwdollar's picture

I could, but that time and money is better spent trying to start a business IMO. Tuition inflation is out of control thanks to this bubble.

Thu, 05/31/2012 - 13:58 | 2480486 Gully Foyle
Gully Foyle's picture


If you can I hope it works out.

You face similar problems with either choice.

It used to be that a college degree proved you had the capacity to focus long enough to become educated. Much like how a machinist knew his trade.


Most common grade now awarded in college classes: A

Thu, 05/31/2012 - 15:04 | 2480784 NotApplicable
NotApplicable's picture

I've got a nice student loan for my almost EE/CE degree (dropped out as a senior after acquiring a family along the way). There's no way I'd ever consider going back, with one exception, pushing those loans out even further in time (been paying interest only at 2% the last 4 years) by getting my PhD in Economics (which I would already have a minor in).

I'm thinking that flipping that Keynesian hellhole upside-down and filling the void with Austrian ideology might make for a fun way to spend my retirement years. Not to mention the opportunity to bitch-slap those worthless assholes whose worthless classes I'm still paying for.

Thu, 05/31/2012 - 15:33 | 2480888 WillyGroper
WillyGroper's picture

What's to stop corporate from importing engineers on a work visa claiming they can't find qualified candidates? I've seen it done in IT while kicking people to the curb. Margins.

Thu, 05/31/2012 - 16:46 | 2481123 Panafrican Funk...
Panafrican Funktron Robot's picture

"Then again most just don't have the Math skills for a degree that will eventually lead to a real job."

Lazlo Biryani = counterargument to the need for math skills to make money.  If you want a "real job", yeah, I suppose, but who the hell wants a "real job"?  Why use your talents and hard work to make some dipshit in a suit rich?


Thu, 05/31/2012 - 13:40 | 2480402 blindfaith
blindfaith's picture



Good...then you can explain how and why even a small college president makes a million bucks a year and the professors make 250,000 and up?  Get into the university catagory and the presidents make 5 million or more a year and the professorts make 500,000 and up.

Makes you wonder about the real cost of "higher education"  These 'salaries' went not here 10 years ago, but neither were 20 million and 100 million paying CEO jobs.

It won't stop, until it stops. 

None of these people are willing to take the preachers 10% cut, instead a slew of them just won a 10% inclease in strapped-for-cash California and they shoved it down the throats of the students.  Just remember, don't swallow kids.

Thu, 05/31/2012 - 13:45 | 2480423 ElvisDog
ElvisDog's picture

One small correction, a relatively small percentage of people who teach at Universities are professors making 500K and up. Most classes are taugh by grad students or by adjunct professors (is that the right term?) who make less than $50K.

Thu, 05/31/2012 - 13:49 | 2480441 Ahmeexnal
Ahmeexnal's picture

At which university does George Soros lectures students?

Thu, 05/31/2012 - 13:54 | 2480466 crawldaddy
crawldaddy's picture

one that you could never get into I suspect.

Thu, 05/31/2012 - 15:13 | 2480808 tmosley
tmosley's picture

So, Cockroach U?

Thu, 05/31/2012 - 13:59 | 2480494 Gully Foyle
Gully Foyle's picture


Trump U

Thu, 05/31/2012 - 14:00 | 2480501 BandGap
BandGap's picture

What? I have taught at all levels. Professors generally make <100K, unless they have grants for research or studies, some write books. If they do get grants, universities typically take 40-60% of these monies for "overhead". Grad students make <25K a year, Adjunct are paid per class, roughly 4-8K per 3-4 credit course, depending on the school.

You do not get rich in academia unless you have grants, do some type of research and/or publish. 

Thu, 05/31/2012 - 14:05 | 2480539 Mordenkainen
Mordenkainen's picture

Allow me to decloak for a moment to say that I'm a full-time (assistant) professor and I make less than $50K, teaching five courses per semester. Adjunct teachers make far, far less than that, along the lines of a few thousand per course per semester, and without benefits. Sorry guys, but we're really not as well paid as you think.

Now back into hiding I go.

Thu, 05/31/2012 - 14:26 | 2480649 tarsubil
tarsubil's picture

If you wanted to make money at the University, you should have avoided work and gone into administration.

Thu, 05/31/2012 - 21:57 | 2482150 Cathartes Aura
Cathartes Aura's picture

I'll jump in here with my anecdotal story along the same lines. . .

few years back I took a couple of classes at a State Uni, made friends with my professor - she had earned her PhD at 27, dipped her toe in the "professor world" where she'd earned her degrees - and was completely disgusted by the "cocktail party" circuit of two-faced back-handing creeps she would have to suck up to / with.

left her home state behind, set up as "adjunct" at the State University - where she was paid $8 an hour, no benefits, and she didn't know from semester to semester how many courses she would be offered, the admin usually let her know a couple weeks before the semester began - some semesters, full load, some *shrug*   oh well hon!

she was brilliant, and an excellent professor - but if you don't jump through the flaming hoops of the game, you're SOL.

she's out of the teaching world for good now, putting her wisdom into her community. . .

Thu, 05/31/2012 - 14:30 | 2480660 libertus
libertus's picture

That is not totally accurate. Professors at state institutions generally have it really good. At a lot of community colleges you may be correct. Look online for information about what professors make at state schools. It will BLOW YOUR MIND. 



Thu, 05/31/2012 - 14:54 | 2480741 GeezerGeek
GeezerGeek's picture

I bet that at most big universities the athletic director and the coaches for basketball and football make more than the college president. Nice to observe the relative importance of jobs in these institutions of 'higher learning'.

Thu, 05/31/2012 - 16:46 | 2481124 Poetic injustice
Poetic injustice's picture

I'd say nuclear scientists have good chances of employment, if not in USA then in Iran.

Thu, 05/31/2012 - 13:30 | 2480341 SourNStout
SourNStout's picture

Didn't see this coming...




Thu, 05/31/2012 - 13:39 | 2480384 MachoMan
MachoMan's picture

This to a large extent.

One of the necessary components of the sales pitch should have been: "now you know that in jacking off in college for four (4) to seven (7) years, immediately following your education you will probably have to eat dog food, drive a shitty car, take a shitty job, and live in a questionable neighborhood for the same or more time so as to have any semblance of a chance to pay down your debt."  Now, reasonable people should not need this caveat, it should be inherent in their understanding of the world...  but it could still be said. 

Can't tell you the number of kids I see who have large student loans that continue to be prolifigate spenders...  The allure of student loans in college offered many people a care free lifestyle they've never managed to outgrow...  the only way this stops is for creditors to cut off the spigot and then for those creditors to not be backstopped for the losses...  For some reason no one goes into school with the expectation that they will basically have to sacrifice 5+ years on the backside to pay off all the loans...

I also can't tell you the number of people who I talk to that say they're not paying student loans early because they believe there will be a bailout/forgiveness...  

I tell everyone I can to simply avoid college and get a technical degree/certification...  start earning money now doing practical work...   

Thu, 05/31/2012 - 13:44 | 2480419 Gully Foyle
Gully Foyle's picture


Try these as reasons

Top 10 Party Schools of 2012

Top Party Schools 2011: Playboy List

Hottest Student Bodies: Top 50 Universities Ranked By Looks

The 50 Hottest Colleges In America

The Top 10 Colleges With The Most Liberal Students

Ranking of the Most Liberal Colleges in the U.S.


Thu, 05/31/2012 - 13:56 | 2480477 MachoMan
MachoMan's picture



You mean there isn't a free lunch?  Like...  I thought it was the government n stuff?  They were paying for it...  I don't owe them anything...

This sucks, I wanna go back to college

Thu, 05/31/2012 - 14:02 | 2480512 Gully Foyle
Gully Foyle's picture


Being 30 and Living With Your Parents Isn’t Lame — It’s Awesome,0,75816...

For the 'funemployed,' unemployment is welcome These jobless folks, usually singles in their 20s and 30s, find that life without work agrees with them. Instead of punching the clock, they're hitting the beach.

Funemployment. Fun things to do while other people are at work.

Thu, 05/31/2012 - 15:13 | 2480812 GeezerGeek
GeezerGeek's picture

This sucks, I wanna go back to college. I can relate to this sentiment.

But at least graduating these days doesn't threaten one's life - unless your student load came from the wrong lender.

Unlike my friends, as I approached graduation in 1968 I considered it a major failure. It meant that I'd have to join the real world. In 1968, for a male that meant facing a very high probability of getting a government-provided job opportunity in a damp place with dangerous levels of lead were in the air. Grad school provided no deferment by then. I know several friends who wished they could simply have retreated to their parents' basements. I doubt there are as many cases of PTSD from living in a basement as there are from being shot at on a daily basis.

Every generations has its own set of problems. I have close to no sympathy for college graduates these days, except to allow that their parents were to some extent complicit.

Thu, 05/31/2012 - 13:53 | 2480459 WTF_247
WTF_247's picture

"I tell everyone I can to simply avoid college and get a technical degree/certification...  start earning money now doing practical work...  "

Yep. I think more and more kids will start to see the light.  College actually costs more than just tuition.  You are giving up 4 or more years of actually working.  Even in a low end job that is probably 15k per year at least.  So on top of the 20k in tuition a year you can tack on another 15k of opportunity cost that is lost.

Many would be far better off to learn a trade - plumbing, electrician, hell even become a bus driver.  After  6-7 years you are making 80k+ per year + pension as a bus driver.  Why would you ever even bother going to college? 

While the current college kids are still paying off student loans a few years out of college, those who forgo college already have substantial savings and are buying a house.  Unless you become a lawyer, doctor or other high end specialty there is almost no benefit now to going to college in terms of money earned.  

Most jobs make very little use of anything "learned" in college.  Additionally, those that do require specialized learning, most of that could be learned on the job (aka journeyman) which used to be very, very common.

College loans indoctrinates many into the "debt is good" mantra the banking cartel wants to uphold.



Thu, 05/31/2012 - 14:04 | 2480528 Gully Foyle
Gully Foyle's picture


If you haven't seen it yet watch this Mike Rowe TED talk. The first few minutes is about Dirty jobs, But it's very enlightening and raises a number of points never discussed. Like the war on work and how tradesmen are denigrated and ridiculed.

Mike Rowe celebrates dirty jobs
Thu, 05/31/2012 - 14:04 | 2480529 Citxmech
Citxmech's picture

Pension?  Have you been paying attention?

Thu, 05/31/2012 - 14:25 | 2480562 bdc63
bdc63's picture

We have a family friend that when the rest of us were going to college back in the 80's he went out and starting a grass cutting business.  Fast-forward 25-30 years and he now owns a successful commerical grounds maintence company.

He has twins in high school (expensive private prep schools).  They are both straight A students and want to go on to college, like all their friends are going to do. He has offered them each $100,000 to help them start their own businesses in lieu of what he would put towards their college tuition.  The boy is "considering it" but the girl has decided to go to a university where she'll have to take out loans significanly beyond the $100K to pay for the four years.  She wants to be a school teacher ...

Thu, 05/31/2012 - 15:14 | 2480818 NotApplicable
NotApplicable's picture

Tell him to have his kids go read Gary North. He has written extensively on this subject and has assembled very compelling arguments.

First, should you go to college at all?

If so, here's how you should do it.

Thu, 05/31/2012 - 14:12 | 2480574 BlueCollaredOne
BlueCollaredOne's picture


I was a troublemaker in school so college wasn't an opportunity for me. I somehow got into an AP English class in high school and we had to write a persuasive paper on whatever topic we wanted (as long as the "teacher" approved of it). I made up a fake topic, but then actually wrote about how the US is following the path of Rome in regards to an empire collapsing. That was when I learned that critical thinking is discouraged. Only reason I graduated high school back in 2002 was because my mom was head of the PTSO.

After high school i took up a career in HVAC, specializing in ductwork and made sure I showed up 15 minutes early every day. Long story short I'm now 27, head of the coordination dept at the company I work for, and have no student debt. I make more than most college graduates. I'm not trying to brag, I just want to reiterate your point that college really isn't necessary.

All of my friends went to college, and they are either waiters, selling cars, or are amassing more debt trying to attain graduates degrees.

Thu, 05/31/2012 - 14:21 | 2480624 Gully Foyle
Gully Foyle's picture


Take the time and watch this Mike Rowe TED talk from 2009. You need to see it all the way through.

Thu, 05/31/2012 - 14:53 | 2480711 BlueCollaredOne
BlueCollaredOne's picture

Damn Gully, that was a good watch. He's right on so many levels. Thanks for the link man, it's nice to know that some people appreciate us lowly blue collared ones.

Thu, 05/31/2012 - 15:24 | 2480852 DaveyJones
DaveyJones's picture

some of the dumbest people I've met are lawyers

think it was Socrates who said the craftmaker is the only person in society who isn't full of it.

Thu, 05/31/2012 - 16:37 | 2481090 MachoMan
MachoMan's picture

dumb people are everywhere...  but, you will probably never find anyone more indignant about being dumb than dumb lawyers...

Thu, 05/31/2012 - 15:40 | 2480919 WillyGroper
WillyGroper's picture

Honest living is anything but lowly!

Thu, 05/31/2012 - 16:59 | 2481156 fnordfnordfnord
fnordfnordfnord's picture

That's right! Fuck education. Just learn how to run a piece of factory equipment. That way you can always make enough gas money to get to work next week.

Government guranteed student loans are kind of like an implicit contract that the Boomers have made with the youth at-large. If you greedy old bastards wanted to see that money again, you shouldn't have fucking pillaged the country/economy. Reap what you sow you sons of bitches.

Thu, 05/31/2012 - 13:47 | 2480393 kridkrid
kridkrid's picture

Your programmed response is just as programmed as their programmed response. They've been sold the American Dream. Just like home ownership, the "dream" was the sales pitch to load people up on debt. While the larger bubble that is our monetary system was inflating, the "pitch" could actually reference "positive returns", even if those returns were transitory in nature. That ship has mostly sailed.

They are victims. Not in the sense that they should have any sort of recourse (other than default) but they are victims. I won't argue that they aren't dumb, or that they should get a bailout or anything of the sort. Just stating the obvious... They were manipulated.

How are you programmed? You are carrying water for the bankers by keeping the blame focused on the victim. That is a conditioned response that the banking industry has done a great job of cultivating.

Thu, 05/31/2012 - 14:06 | 2480546 random shots
random shots's picture

I'm a victim brother. I'm a victim of 400 years of conditioning. The man has programmed my conditioning. Even my conditioning has been conditioned!



Thu, 05/31/2012 - 14:22 | 2480629 A Lunatic
A Lunatic's picture

Most importantly though, you are helpless to make choices that are outside the boundaries of this conditioning.

Thu, 05/31/2012 - 22:14 | 2482209 Cathartes Aura
Cathartes Aura's picture

". . . just dropped in to see what condition my condition was in. . ."   Lebowski version.


@ kridkrid,

How are you programmed? You are carrying water for the bankers by keeping the blame focused on the victim. That is a conditioned response that the banking industry has done a great job of cultivating.

stellar post, it needs to be said over and over, don't let them have the upper hand with the divide & conquer bulls**t - we all need to remain vigilant about who the real criminals are, and who needs the weeding out.

Thu, 05/31/2012 - 14:17 | 2480607 MachoMan
MachoMan's picture

If we're going to chalk up responsibility to "programming" then I can hardly see why we need bother with any laws...  literally, this is how one makes EVERY decision...  

If you don't believe debtors should have any recourse other than be allowed to default, then why the bleeding heart?  You allow them to be penniless, but still care?  Gimme a break.

What we can do...  to help things out...  is while deadbeat kids are defaulting, we can go ahead and require their creditors to book the losses and then be shuttered (actually, sold off for pennies on the dollar to friends of the cause, but same difference). 

Thu, 05/31/2012 - 14:32 | 2480666 bdc63
bdc63's picture

agreed.  personal responsibility.  nuff said.

Thu, 05/31/2012 - 14:43 | 2480701 kridkrid
kridkrid's picture

I have no bleeding heart. I was afraid it might come across that way. At the same time, I don't wish to blame them. I would rather blame the institutions who have created the mess through credit money and usury. I agree with your final paragraph.

Thu, 05/31/2012 - 15:13 | 2480809 MachoMan
MachoMan's picture

I think that's one of the issues many people can't break through and why we're at a stalemate on the issue...  summed it up perfectly...  I would "rather" blame... 

Once we can start blaming everyone and calling them all donkeys, we'll have the foundation to begin repair.

Thu, 05/31/2012 - 13:44 | 2480405 Its_the_economy...
Its_the_economy_stupid's picture


They are children. They do not know what they are signing. They aren't even taught to balance a checkbook in high school, lete alone amortize a "mortgage" across 10 years and simultaneously calculate net pay in a declining salary invironment.

They are lambs to the slaughter led by banksters and college apparatchiks who feed on their blood.

STFU, stop generalizing, and remember that these children have to support your ass when you retire and whine about where your SS check is every month.


Thu, 05/31/2012 - 13:53 | 2480463 Gully Foyle
Gully Foyle's picture


They have parents.

If the parents are stupid, and the students are stupid, why blame the fucking education system?

1/3 of high school graduates never read another book for the rest of their lives. 42 percent of college graduates never read another book after college. 80 percent of U.S. families did not buy or read a book last year. 70 percent of U.S. adults have not been in a bookstore in the last five years. 57 percent of new books are not read to completion. 70 percent of books published do not earn back their advance.

70 percent of the books published do not make a profit.

53 percent read fiction, 43 percent read nonfiction. The favorite fiction category is mystery and suspence, at 19 percent.

55 percent of fiction is bought by women, 45 percent by men.


Thu, 05/31/2012 - 14:07 | 2480555 Citxmech
Citxmech's picture

These stats are horrifying.

Thu, 05/31/2012 - 14:18 | 2480610 Gully Foyle
Gully Foyle's picture


No shit.

I have inlaws who never read, watch reality tv like the Amazing race.

Daddy has a Math degree and an IT degree and until recently sold illegal cable cards, but now is becoming an Accountant.

Mommy never finished her Art degree and has been a lifelong waitress.

They live in FLA.

Their kid is failing at a community college.

There is no fucking way the system failed them, they failed the system. They pissed away their time going to concerts and being the kids friend. They should have been parents and made him work hard. They should have lead by example instead of taking the lazy route.

Thu, 05/31/2012 - 14:24 | 2480643 CommunityStandard
CommunityStandard's picture

Don't worry - 90% of statistics are made up.

Thu, 05/31/2012 - 14:35 | 2480676 bdc63
bdc63's picture

I thought it was 91% ...

Thu, 05/31/2012 - 14:28 | 2480570 Its_the_economy...
Its_the_economy_stupid's picture

Think for a minute. Please.

This education/lending system has been the path to riches for the education/banking complex. The bean counters saw the system imploding over a decade ago when the default rates showed a pattern that is now coming to fruition. The education/banking lobby successfully excluded these debts from bankruptcy protection when they saw the curve barely starting to accelerate.

Did they at that time raise the bar for disclosures on risks of borrowing? Did they simultaneously require colleges to maintain hiring stats within majors of study to provide the children before signing loans? Did they do anything other than keep their mouths shut and loan as much as possible to as many as possible, with as little disclosure as possible?

Christ, there is more disclosure in rescuing a dog from the pound, with multiple visits required, an inspection of the adoptors property, etc than for a kid to get 100K in debt.

Yes, I blame the system and I will make sure my children do not become slaves to it.

And by the way, what banker would lend business start-up capital to a functional or structural illiterate? So, if the system wasn't rigged do you think they would lend the equivalent to child?

Time to argue the other side of the debate as we were taught in school and then figure out if you are on the right side of the divide.

Thu, 05/31/2012 - 22:28 | 2482256 Cathartes Aura
Cathartes Aura's picture

well argued, and this jumped out at me,

Did they simultaneously require colleges to maintain hiring stats within majors of study to provide the children before signing loans?

was chatting with a "return to college to get a degree" person in her 30's - she's pre-law in Calif. where the "budget cuts" means she is having trouble finishing her degree because the courses required aren't on offer. . . she was bemoaning the fact that her "4 year degree" was being stretched to five, and how the required classes are FULL as soon as they're offered each semester. . .

it's rigged.


Thu, 05/31/2012 - 13:43 | 2480414 A Lunatic
A Lunatic's picture

BTW if going to college, and the costs associated with it, is not going to pay off then don't go to fucking college. Education is an investment, hedge accordingly and stop bitching..........bitchez.

Thu, 05/31/2012 - 13:50 | 2480445 crawldaddy
crawldaddy's picture

great plan idiot, we will just let the rest of the world educate their kids and we will be their kitchen servants.


Great plan einstein.

Thu, 05/31/2012 - 13:54 | 2480468 koaj
koaj's picture

a college isnt the only place to get an education. i went for 4 years, have no debt and learned how to build a bong from a one liter pepsi bottle and a bic pen


i didnt start really learning until 10-11 years after i graduated


Thu, 05/31/2012 - 13:58 | 2480485 crawldaddy
crawldaddy's picture

yeah so, and your point is what?  you are a slow learner?

Thu, 05/31/2012 - 14:01 | 2480503 koaj
koaj's picture

learning what you are taught in school and learning how the world works are very different things

Thu, 05/31/2012 - 14:12 | 2480557 A Lunatic
A Lunatic's picture

Um, who's the idiot here.  Going into debt in order to finance a degree, only to find upon graduation no available (dream) jobs, but a lifetime of menial labor at a shit job which has nothing to do with your investment is fucking stupid. Blaming it on everyone else who made better choices and demanding to be recompensed for stupidity is criminal. You seem to believe that Malinvestment should be rewarded..........

Thu, 05/31/2012 - 14:30 | 2480656 HomeBrewPrepper
HomeBrewPrepper's picture

Is there a student loan etf I can short or buy puts. I hate bubbles I can't partake.

Thu, 05/31/2012 - 14:35 | 2480675 Dingleberry
Dingleberry's picture

look for Blankfiend and co. to do some more of "God's work" in that area. Im sure they can create some kind of MBS-type product for student loans, get them rated "AAA" and sell them to orphans, grannies and pension funds.

Thu, 05/31/2012 - 14:35 | 2480677 disabledvet
disabledvet's picture

Like lap-dancing!

Thu, 05/31/2012 - 15:14 | 2480817 libertus
libertus's picture

Check out this article. It is an excellent description of the issue and what we can do to get out of it. Soon we will see the student loan market sieze up as the private loans become the only ones available--until they don't do to a sudden collapse of the bond market. The shit will really hit the fan in higher ed in the next couple of years. Then we might be able to create a much better educational system out of the ashes.

Thu, 05/31/2012 - 16:15 | 2481030 GeezerGeek
GeezerGeek's picture

After reading just a few pages of the document by Skiff and Baker, I am convinced that higher education - to the extent it is represented by these authors - needs culling. The sentences often verge on the opaque. One would hope that their ability to write would be better. For example, in once case the pronoun 'he' was used to refer (apparently) back to an adjective at the beginning of the sentence. If this is what taxpayers and tuition payers get for their money, I say let it crash.

A better educational system will arise when most students go to study subjects based on what's required to get by in the real world. How much time and money is spent on courses not related to the student's major? Stop making them mandatory to reduce tuition costs.  I suggest that universities strip out the 'pink slime' used to support inconsequential, irrelevant topics until our country can afford the luxury of education for its own sake.


Thu, 05/31/2012 - 16:05 | 2480996 eclectic syncretist
eclectic syncretist's picture

Last time I checked they weren't offering degrees in Mortgage origination Fraud, Electronic Skimming, Bribery Loopholes, ect.



Thu, 05/31/2012 - 16:18 | 2481034 GeezerGeek
GeezerGeek's picture

Those are covered in graduate courses under the heading of Business Ethics. For undergraduates there is Creative Accounting 101.

Fri, 06/01/2012 - 02:16 | 2482661 Larry Dallas
Larry Dallas's picture

Up 10000!

Thu, 05/31/2012 - 13:27 | 2480313 LawsofPhysics
LawsofPhysics's picture

Next up.  Student debts will be "forgiven" if you serve in the armed forces.  If that does not work, the draft will be reinstated.  Funny how history rythmes like that.  NATO, the UN and the IMF need to get some things done.

Thu, 05/31/2012 - 13:42 | 2480397 dwdollar
dwdollar's picture

That's been going on for some time already. Enlistees have the option for the GI Bill or student loan debt forgiveness. At least they did when I was suckered in back around 2001.

Thu, 05/31/2012 - 13:52 | 2480453 crawldaddy
crawldaddy's picture

too bad almost 50% of our veterans have to go on disability, since illegal wars and god know what type of toxic shit in the battlefield fucks them up good.

Thu, 05/31/2012 - 13:44 | 2480398 Dr. Engali
Dr. Engali's picture

That's exactly right. Of course this time the war will have to be much bigger and more spectacular than the last two world wars. They need to get the world population down to under a billion.

Thu, 05/31/2012 - 14:05 | 2480535 Henry Chinaski
Henry Chinaski's picture

Next up.  Student debts will be "forgiven" if you serve in the armed forces.

The fact that the federal government has taken over student loans leads me to conclude that the desired end result is a new universal higher education entitlement with a new universal payroll deduction like social security and medicare. 

Thu, 05/31/2012 - 14:30 | 2480659 Silverballs
Silverballs's picture

@ lawsofphysics
I've been telling everyone that for years

Thu, 05/31/2012 - 15:23 | 2480850 ParkAveFlasher
ParkAveFlasher's picture

By extension, if Fannie & Freddie hold your delinquent mortgage...will you have an "option" there as well?

Thu, 05/31/2012 - 16:35 | 2481074 GeezerGeek
GeezerGeek's picture

I fully support the draft, although for reasons having nothing to do with the student loan mess. I was among the last to be subjected to it, graduating from college in 1968. That was the year the Selective Service ended deferments for graduate school and before the lottery system was created. I enlisted in the USAF to avoid being drafted into the Marines, which was happening back then.

The U.S. military should have its strength dependent upon the typical citizen, not on some self-selected set of macho Rambo-wannabes. A citizen-based army will be much less vulnerable to being used against the will of the people. An example of this would be the growing discontent of the U.S. population as the conflict in Viet Nam progressed. I have no problem with a professional core for the army (starting at about the E3/sergeant level - each branch has different designations), but the lowest ranks (private, PFC, corporal, whatever) are better populated by draftees.

A side benefit is that being exposed to a broader swath of the American population is beneficial. Far too many grow up with a circumscribed cultural circle, and interacting with others is both beneficial and enlightening. 


Thu, 05/31/2012 - 13:27 | 2480316 johnnynaps
johnnynaps's picture


Thu, 05/31/2012 - 13:28 | 2480319 mayhem_korner
mayhem_korner's picture



Top chart is a death knell.  Fixed debt obligations > revolving debt means the hole that has been dug is deeper than the diggers are tall.

Thu, 05/31/2012 - 13:30 | 2480321 wisefool
wisefool's picture

How are they going to buy homes if they cant afford their student loans? On the upside, tulips are cheap and are going to finally appear in Civilization V: Gods and Kings.

Three new scenarios will be included in the expansion: "Fall of Rome", focusing on the decline of the Roman Empire; "Into the Renaissance",

Thu, 05/31/2012 - 15:23 | 2480851 NotApplicable
NotApplicable's picture

Or get married ($100k in inescapable debt doesn't add up to wedded bliss), or afford to have children.

Thu, 05/31/2012 - 15:45 | 2480937 wisefool
wisefool's picture

Or how about if they do get a great job, making more than $60k/yr? Guess what? you can not deduct the intrest on that student loan.

Hans Gruber: "You asked for the impossible, I give you the United States tax code!"

Thu, 05/31/2012 - 16:39 | 2481097 GeezerGeek
GeezerGeek's picture

Perhaps those are unspoken but anticipated consequences. So much has been done in the last several decades to destroy Western civilization that to ascribe it all to chance is beyond my ability.

Thu, 05/31/2012 - 13:30 | 2480335's picture

It an investment folks...that way we can have more intellectuals in the white house!

Thu, 05/31/2012 - 13:30 | 2480336 icanhasbailout
icanhasbailout's picture

The greatest fool in the market is college-bound and just became of age to legally sign a contract.

Thu, 05/31/2012 - 13:31 | 2480347 El Tuco
El Tuco's picture

 A whole new generation of slaves every 4-5 years.

Thu, 05/31/2012 - 13:38 | 2480361 LawsofPhysics
LawsofPhysics's picture

Ah, most colleges graduate students every semester, so it is slightly more bullish than that.  New debt slaves every six months.

Thu, 05/31/2012 - 13:53 | 2480461 crawldaddy
crawldaddy's picture

and what of all the ones that dont graduate. Most dont you know.  So you get some debt and no degree. Worst of both worlds.

Thu, 05/31/2012 - 13:32 | 2480350 Casual_Observer
Casual_Observer's picture

Welllll, this could create a pop for Faceberg!!

Thu, 05/31/2012 - 15:25 | 2480856 NotApplicable
NotApplicable's picture

"For every ad you click, $0.00001 will be credited to your student loan balance."

Thu, 05/31/2012 - 13:33 | 2480357 P'Od_Accountant
P&#039;Od_Accountant's picture

How can they be delinquent?  The "money" doesn't come from students who repay their loans so that others may borrow those funds.  It is printed funny money like any other bank "loan".   In contract law it is a prerequisite that both parties offer some consideration before a contract is binding.  As the loaner is essentially counterfeiting money to "loan" it is not offering valid consideration.  This is just another predatory bubble used to enslave young people into wage slavery.  Get out and stay out of debt.  Tyler Durden: Reject the basic assumptions of civilization, especially the importance of material possessions.

Thu, 05/31/2012 - 13:50 | 2480436 Bob
Bob's picture

It was right in everyone's face. Tyler and I just made it visible. It was on the tip of everyone's tongue. Tyler and I just gave it a name.

Debt Jubilee, bitchez!

Thu, 05/31/2012 - 13:51 | 2480442 MachoMan
MachoMan's picture

Depends.  If there is a requirement to repay the loan, then consideration is given...  in other words, the financial institution providing the loan is required to repay the loan it receives from the printer...  now, it might have the ability to print additional money and then get repaid in monopoly money, but this is its own bed.  The issue of consideration probably isn't the best point of attack...  destined loser.  The determination of whether sufficient legal consideration is present in a particular contract does not include a determination whether the deal was a "good" one.

The duty of good faith and fair dealing...  probably getting warmer, but also likely a loser. 

The trick is to understand the complexity of "independent" corporations performing each act in the chain... 

Thu, 05/31/2012 - 13:36 | 2480368 i love cholas
i love cholas's picture

I still work with people leaving my company to go back to school. We still have a loooooooooooooooong way to go before shit turns around in this country.

Thu, 05/31/2012 - 13:36 | 2480369 pods
pods's picture

So 9% of all student loan debt is 90 days past due?  

That is not something that spells recovery.  

And you cannot walk away from that.  Stays with you forever, like herpes.


Thu, 05/31/2012 - 14:16 | 2480598 johnnynaps
johnnynaps's picture

I'd rather have herpes than $50k in student debt in this economic environment.

Do NOT follow this link or you will be banned from the site!