Student Loan Debt Slaves In Perpetuity - A True Story Of "Bankruptcy Hell"

Tyler Durden's picture

The numeric implications as well as the magnitude of the student loan bubble have been discussed extensively before. Yet just like most people's eyes gloss over when they hear billions, trillions or quadrillions, so seeing the exponential chart of Federal Student debt merely brings up memories of a math lesson from high school, or at best, makes one think of statistics. And as we all know statistics are faceless, nameless and can never apply to anyone else. It is the individual case studies that have the most impact. Which is why we would like to introduce you to Devin and Sarah Stang - student loan debt slaves in perpetuity.

First, for those who are still unfamiliar with the brush strokes, here is the big picture, courtesy of AP:

The Federal Reserve Bank of New York estimates 37 million Americans have student loan debt, totaling $870 billion. The average balance is around $23,000 (though that partly reflects a relatively small number of very large balances; the median is $12,800). Only 39 percent are paying down balances. An estimated 5.4 million borrowers have at least one student loan account past due.

 

Roughly 85 percent of outstanding student loan debt is owed to the federal government. The remaining 15 percent that's counted as private student debt is owed to various non-federal lenders, ranging from banks to loan companies like Sallie Mae Corp. to non-profits and state-affiliated agencies (under the Durbin bill, loans from any government-funded entity still wouldn't be dischargeable, only those from truly private lenders).

 

Generally, it's these private loans that bring borrowers to the door of bankruptcy lawyers like Barrett. Private student loans often lack the protections of federal ones, and have rates that typically start higher and can shoot up. A recent survey of bankruptcy attorneys found 81 percent reporting more clients with student debt in recent years, and roughly half reporting a significant increase.

And, also by way of background to those unfamiliar, student debt has a very peculiar feature:

Virtually any other kind of debt — including medical bills, mortgage, credit cards and car loans, even gambling losses— can be discharged in bankruptcy, allowing the "honest but unlucky" a chance to restore their footing through an arduous restructuring overseen by a court. 

 

But under a 2005 law passed by Congress to protect lenders, private student loans fall under the same nearly-impossible-to-clear category as child support payments and criminal fines.

 

"It's a huge part of why the younger generations are here now," said the Stangs' bankruptcy lawyer, Matthew Barrett, whose busy office in Amherst, west of Cleveland, belies stories about the improving economy. He estimates half his clients have problems with student debt.

It is very ironic is that despite all the rhetoric, the president has said absolutely nothing about mitigating this particular provision of bankruptcy law: the one which makes student debt the most expensive form of payment: one which is literally like the proverbial gift that keeps on giving. Or in this case taking.

To advocates for student borrowers, the law is infuriating, counter-productive and — if intended to ensure lenders would be willing to make loans to students— demonstrably unnecessary. They see changing it as among the most effective, and least costly, ways to help those most seriously burdened by student debt, without giving a break to those for whom it's manageable.

 

Yet despite a voluble national conversation on student debt, the issue has gotten comparatively little attention.

 

At stops in three swing states this week, President Barack Obama is calling on Congress to head off a scheduled doubling in federal Stafford loan rates, from 3.4 percent to 6.8 percent. Changing that law could save more than 7 million new borrowers on average $1,000 a year, according to the White House. But this across-the-board benefit for current college students would do nothing for older borrowers already in trouble.

 

Acting without Congress, the Obama administration has implemented a series of protections for those pressed to pay back federal loans, such as income-based repayment and a public-service loan forgiveness program — steps lauded by advocates for borrowers.

 

However, the president appears never to have directly addressed a proposal by Sen. Richard Durbin, D-Illinois, to overturn the 2005 law on private loans. Treasury Secretary Timothy Geithner recently told Durbin the dischargeability proposal had "some merit" and that the administration wanted to work with him to expand the protections it has implemented for federal student loans into the private market. Regardless, the bill has little chance of passing the divided Congress in an election year.

Which brings us to the topic at hand: case study A.

The misfortunes that brought schoolteachers Devin and Sarah Stang and their four young children to bankruptcy — and the loss of their house and a car in the process — were their own unique story.

 

They bought the house at just the wrong time. There were heavy medical expenses when, at five months pregnant, she delivered stillborn twins. And their money woes go back further: When Sarah's college softball team pressured her to drop classes she wanted to take, she quit, lost her scholarship and had to make up the difference with loans. Devin, too, borrowed to get a master's degree. Then they struggled amid school layoffs near their Sandusky, Ohio, home.

 

Now, the Stangs just want a truly clean slate, financially. But even the ordeal of bankruptcy won't give it to them, and the reason is a common one: Much of their debt comes from private student loans.

...Which as noted above, will virtually never go away. So who is the biggest winner? Why bankruptcy lawyers of course, who as it so happens all the time, do nothing but provide false hope...

Generally, it's these private loans that bring borrowers to the door of bankruptcy lawyers like Barrett. Private student loans often lack the protections of federal ones, and have rates that typically start higher and can shoot up. A recent survey of bankruptcy attorneys found 81 percent reporting more clients with student debt in recent years, and roughly half reporting a significant increase.

 

Barrett says he's seeing more recent college graduates who couldn't get a job after graduation or who, if they did, faced garnishment of entry-level wages.

 

Before the 2005 law passed, lenders would "try to work with (borrowers) on a payment plan," Barrett says. "They had the threat, if we don't make it so this person can afford to live and eat and get to work and dress for work, then they're going to file for a bankruptcy plan and we're going to get hit.

 

"Now, they'll hit you with a garnishment — and if you can't make ends meet, tough."

 

Private lenders haven't always enjoyed a spot at the front of the line of bankruptcy creditors.

It wasn't always like that:

Private lenders haven't always enjoyed a spot at the front of the line of bankruptcy creditors.

Until 1976, all education loans were dischargeable in bankruptcy. That year Congress began requiring borrowers to wait at least five years before they could discharge federal student loans. Since 1998, borrowers have been unable ever to discharge federal student loans, and in 2005 the then-Republican-controlled Congress made private loans almost impossible to discharge. Essentially, borrowers must prove they can't repay and will never be able to, but the standard is vague. And litigating in bankruptcy court may be impossible financially for someone in those circumstances.

 

With federal loans, the concern was that making it too easy to walk away from debts would put taxpayer dollars at risk.

 

With private loans, the lender protections were justified by fears that otherwise lenders wouldn't extend students the capital they needed to cover tuition bills. Student loans offer no security or collateral. Lenders are betting on a borrower's education to produce future earnings. Put differently, a bank can repossess your car but not your brain.

 

Changing the law "would force our members to raise borrower rates or elevate their already strict underwriting standards and essentially make it harder to make the loans," said a spokeswoman for the Education Finance Council, which represents nonprofit and state-based providers of non-federal loans, in a statement issued on behalf of president Vince Sampson. A Moody's report also suggested younger student borrowers might be especially tempted by an easier bankruptcy filing, not appreciating the long-term credit damage.

 

But such arguments swim upstream against a lot of historical data.

 

Before 1976, when student loans were dischargeable in bankruptcy, there's little evidence borrowers abused the practice. A federal study from that time estimated less than 1 percent of all matured student loans were discharged in bankruptcy.

Of course, before 1976 there was not 30 years of excessive easing resulting in unprecedented dislocation from fair value for all asset prices, driven purely by nothing but cheap money, and people access to it.

Which brings us back to the Stangs:

"I wasn't raised to say, 'I'll go file bankruptcy,'" said Devin Stang, who is 41. The family's student debt totals $25,000 in federal loans and about $37,000 in private ones, much of it from taking required continuing education credits to keep up their teaching licenses and job prospects at a time of widespread layoffs.

 

Surrendering one of their two cars in bankruptcy will limit the Stangs' work options, Barrett says. And digging out will be even harder because, even after their other debts are clear, the private student lenders could garnishee up to 25 percent of wages.

 

If they could discharge their private loans in the same manner as credit card debts, "away we'd go on our lives," Stang said.

 

There's also little evidence that changing the law would affect the availability of private student loans. In fact, private student lending was expanding rapidly before 2005, when the loans were dischargeable. Then Congress awarded lenders stronger collection powers — but private student lending fell by two-thirds in just a few years, coinciding with the broader credit crunch.

 

A leading financial aid expert, Mark Kantrowitz of the website Finaid.org, doesn't buy the lenders' argument. He says changing the law might slightly increase fees, but lenders make their decisions based on credit scores and macro-economic factors.

Of course, one can say that one has to live the consequences of one's actions, and it is not like the Stangs did not make a mistake. But then the argument would also migrate to the consequences of pervasive bank failures and the fact that unlike the Stangs, banks did get preferential terms for all their losses and shortfalls. And of course that would be true.

And at the end of the day, America has always been about second chances. Perhaps the Stangs, and all those others who took a bet on their biggest asset: themselves, and failed the first time around, deserve a second chance?

Even if changing the law did make private loans disappear, some advocates think that wouldn't be so bad.

 

In fact, new lending has already fallen sharply recently, and it hasn't kept people out of college; enrollment is way up. Students who might have gotten private loans five years ago, but can't now, are apparently choosing less expensive schools or borrowing more of what they need from the federal government, which accounts for more than 90 percent of new loan volume now.

 

A study by the Project on Student Debt, a foundation-supported research group, found that half of students who took out private loans in 2007-2008 failed to borrow their maximum eligibility in federal Stafford loans. Those students could have — and almost certainly should have — borrowed more from Washington first (undergraduates can cumulatively borrow up to $31,000 in federal Stafford loans, and in some cases, as much as $57,500). Now, they're doing so.

Yet nothing will happen. Why? Because that ultimate enabler of the status quo - America's higher learning system itself, is dependent on perpetuating the status quo. Because if loans are harder to come by, college tuitions would tumble, and the very fabric holding the lie that is modern socio-economic surreality, would implode:

Finally, if the spigot of private loans cut off, it might temper college cost increases. Colleges would find it harder to get away with charging more than what students can borrow from the government.

Indeed one can dream... Or return to reality, where unfortunately nothing changes, and millions and millions of Americans are converted each year into that most sublime form of debt slave: the one that can't just pick up and walk away from it all. The very definition of slavery.

"There's a special circle of bankruptcy hell for these kinds of debts," said Rich Williams, higher education advocate with the group US PIRG, which lobbies on student loan issues. "It's not that students are asking for extra protections. We're asking for the same protections entitled to every other form of consumer debt."

And so it continues in the once great USA, where countless people are converted not only into perpetual debt slaves but have to brave the various circles of debt hell simply to comply with a self-image imposed on them by a superficial society that demands one buys stuff one doesn't need, with money one doesn't have to impress people one doesn't like.

Truly the American dream, pardon nightmare, lives on.

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Temporalist's picture

Well if one waits to pay back the loan it will cost next to nothing when the currency is debased.  They should just allow the loan to be paid off over a lifetime.

Unprepared's picture

Well, if they wait long enough, the debt will be discharged. At least until the day they make all debt inheritable.

redpill's picture

The Nick Gaetano is a nice touch.

LetThemEatRand's picture

Atlas Thugged, and demanded non-dischargeable student loans.

NewWorldOrange's picture

LOL - the LAST kind of "thug" to ever demand ANYTHING from the gov, would be a foll'r of Ayn Rand.

Hey man, what's up with all the hating on Ayn Rand and all? Seems kind of obsessive. Most people don't even know who she was. No offense or anything, and none taken (I'm a big fan of hers, though definitely not an "objectivist" and never was and don't consider her works an end-all by any means, though a good start IMHO.) If you know a lot about her and/or her works and would like to chat about it sometimes, I'd enjoy that. Have read pretty much everything she ever wrote, some of it mutliple times, and have written and even published a few things stemming from her works. If you name a day time in reply to this post to meet up and chat...I'll check back here for a reply in case you do. Cheers.

Harlequin001's picture

'They see changing it as among the most effective, and least costly, ways to help those most seriously burdened by student debt, without giving a break to those for whom it's manageable.'...

When Sarah's college softball team pressured her to drop classes she wanted to take, she quit, lost her scholarship and had to make up the difference with loans... Now, the Stangs just want a truly clean slate, financially. '

Barrett says he's seeing more recent college graduates who couldn't get a job after graduation or who, if they did, faced garnishment of entry-level wages...

Let me just get this one straight. Metaphorically speaking, I pay for these people to go to college through my taxes. Sarah takes my tax money and buys an education I assume so that later on I can get my money back from her increased tax income. The school offers her a class she doesn't want so she quits without considering any means to repay my money and then expects me to write my money off because she can't pay it or she doesn't earn as much as she expected.

How many ways can you say 'Tough shit you irresponsible, thick fucking cow.. You owe me the money, now fucking pay it?'

'And at the end of the day, America has always been about second chances. Perhaps the Stangs, and all those others who took a bet on their biggest asset: themselves, and failed the first time around, deserve a second chance?' Perhaps people like me should pay for it eh? My heart bleeds purple fucking piss...

and finally, '"It's not that students are asking for extra protections. We're asking for the same protections entitled to every other form of consumer debt." Really, and which other kind of consumer debt that has no collateral, no income and amounts to tens if not hundreds of thousands of dollars?

'And so it continues in the once great USA, where countless people are converted not only into perpetual debt slaves but have to brave the various circles of debt hell simply to comply with a self-image imposed on them by a superficial society that demands one buys stuff one doesn't need, with money one doesn't have to impress people one doesn't like.' It's called being an adult. Be responsible for your own actions and just say no.

You borrow it you pay it back. That's the way the world goes round. The alternative of course, is that you drive my country into the ground for your own personal gain. In the past, people have been shot for that.

 

Vampyroteuthis infernalis's picture

Once again, that lesbian degree really paid off.

Oh regional Indian's picture

Another tough choice, in a world of tough choices. No Degree, no good job. Degree, debt-millstone around your neck. Have my own personal Student loan horrorstory.

I know that back in the late 1990's, there was lot of buying and selling of bundled student loans between the pharisees. So, as always, the chairs had been set long ago, laws put in place long ago.... so that this could come.

It really looks like the totalitarian tip-toe is about to clamp down, debtor prisons and all. Quite staggering, especially from the out-side, looking in. More so having been on the inside for a while.

The "system" is also totally without a heart. THat is why it keeps cutting off (with legal means) the arms/ability to repay of ther debt-slaves. Totally counter-intuitive till you see the larger picture...

tch...

ori

re-membering-deepwater-horizon

Cathartes Aura's picture

not bad, only seven comments in before the ole standby lines come out,

Once again, that lesbian degree really paid off.

of course, if you'd actually read the OP, you'd find a married couple, both of whom are having trouble with the loans - as teachers.

but it's far more important to get in the "front" thread with a bitchy, repeated daily, completely irrelevant line.

even more laughable is the fact that "Sarah" was taking sports classes - whoooooooooosh!

 

Fish Gone Bad's picture

The pain is not just in the principle, but the fines and fees that get tacked on if a payment is missed.  Has anyone ever missed a credit card payment?  That can be a painful experience.  Student loans can get real ugly, real fast, if a payment is missed.

Harlequin001's picture

'Has anyone ever missed a credit card payment?  That can be a painful experience.' - I did once, by accident. I told the bank if they didn't refund the charge I would clear the balance and never borrow from them again. They refused, and the week after I repaid their 75K and two car loans and told them to shove it. Now I clear the balance every month.

I'm lucky like that, having gold that I can sell even at the height of the 2007 collapse.

The banks don't like it, now they ring me up every few months asking me to transfer balances and take loans. I simply tell them 'Thanks, but no thanks. I don't need any money from a bank that acts like the fucking Gestapo." Nuff said.

LetThemEatRand's picture

If everyone had as much gold as you, it woudn't mean anything.  But fuck everyone, right?

Harlequin001's picture

Hmm, so how much gold have I got then? You seem to have formed a view.

and perhaps you didn't get the bit about selling it to pay off debt...

perhaps everyone else should try the same thing, the world might be a better place.

Acet's picture

Look, most people in developed nations are constantly being sold a shinny view of the world, that impulsive buying is fine, the money you can get from a credit card is just like all other money and above all that the path to hapinness requires you to buy lots of things, most notably, a house.

So the vast majority of people out there have no savings at all. Like the proverbial frog in a boiling pot of water, they slowly became slaves of the system, unable to stand up for themselves against banks, their employers or even in court simply because even though they have a middle class income, their expenses are so large that they can't afford to fight the system.

I'm a saver myself, and I'm very glad I am. It has allowed me to progress in my career simply by saying "fuck you" and leaving dead-end or unpleasant jobs and even in the face of some pretty heavy shit I could afford to protect myself and rebuild my life.

On the other hand, most people out there are not the typical Zero Hedge type. They can't do the same as we can simply because they've spent the last several years trusting the system, doing what almost everybody else was doing, slowly but surelly being cornered into a place from where they have no escape.

The way I see it, telling them "you should've done like I did" is not going to help them. Rather we need to try and wake them up from the hypnotic sleepwalking of consumer society (slowly and softly, not by shouting "Gold, gold, gold!" in their faces) and by going after the wolves that lead them to this and are keeping them pinned down with no escape.

Me, I'm already doing this for my friends and even the company I started is founded on the vision of defeating consumerism (I call it, anti-marketing). How about you?

Harlequin001's picture

Acet, I don't make excuses for people even if they all do the same because someone else, even a government says it's a good idea. Suffice it to say that I saw this coming in 2001 when I sold my house and all it's contents and moved half way around the world to avoid it. I support myself and my family and I wouldn't have it any other way.

'Rather we need to try and wake them up from the hypnotic sleepwalking of consumer society (slowly and softly, not by shouting "Gold, gold, gold!" in their faces) and by going after the wolves that lead them to this and are keeping them pinned down with no escape.' - That's a good phrase, but sadly you've now run out of time. They are adults, and they are responsible for their own actions and decisions and I'm suffering with a total lack of sympathy at this point. I too advise my family and friends on what to do (and others that have since become my very close friends) on what best to do in the coming collapse. The one to watch is not gold but tax. I've said it once and I'll say it again. Gold is just liquidity. I didn't clear my debts because I had gold, I cleared them because I don't have to pay tax. That's the gotcha isn't it, the difference between being able to afford to do what you like with your assets as opposed to being told what to do after they've taken it. I have had many discussions on these pages about onshore versus off, some good and some not so good but all enlightening to one degree or another.

To legally not have to pay tax I had to move half way around the world and take legal and financial advice, a great deal of it. That wasn't cheap. How many of these 'sleepwalkers' would even be prepared to do similar, even if they could, and how many would simply want the benefits I have without bothering with the cost? Who's fault is it that despite my best efforts and others like me, they've expended their capital by staying too long at home listening to self serving investment advice spoon fed to them by licensed and regulated 'respectable' institutions, government and banks. Hell these same 'authorities' still tell you that anything offshore is high risk don't they? You can only trust Bernard Maddoff. Where do you stand personally when someone like me says do this, this and this overseas, and someone at home says 'buy a house, you can't go wrong with property can you?' We are all adults and we are all responsible, or should be.

 'Me, I'm already doing this for my friends and even the company I started is founded on the vision of defeating consumerism (I call it, anti-marketing).' - I tried this back in 2002 when house prices were just starting to boom, when it wasn't very trendy and the world thought I was a tin-foil hatter. Some accepted it, some didn't and yet it worked, as you can see. These people are still my friends now. These guys, like me have gold offshore and are quite happy with it, and as well prepared for what's coming as we can be I believe. Once the real problem arrives, and that will be when the tax bill flops onto the mat for most investors, only then will everyone (including the gold bugs) realise the true problem of keeping all your assets at home.

The way I see it, telling them "you should've done like I did" is not going to help them. Rather we need to try and wake them up from the hypnotic sleepwalking of consumer society (slowly and softly, not by shouting "Gold, gold, gold!" in their faces). Sadly, when all this is over, telling them "you should've done like I did" will be the only thing that really mattered. But then telling people not to invest in property in 2005 didn't work either did it?

Acet's picture

The whole system is designed to keep people meek, unquestioning of authority and uncritical of "experts". Even the ones that are critical have an unstructured approach to it, they angrily lash out at "intelectuals" rather that deconstructing their arguments and exposing the experts' use of specialized language to disguise a lack of wisdom.

Having been born in Portugal and lived in Holland, my move to the UK was a huge eye opener: the whole things is setup to promote sheep-like behaviour:

  • Schools that do not teach kids critical thinking but rather promote obedience to authority. Who are not stern and demanding towards kids but rather wrap them in an everybody-is-special fantasy and teach them to be content with being as they are (meek, uncritical, mediocre).
  • Political correctness used as a tool to shut dissent down.
  • British politness which (certainly when compared with Dutch culture) is just a way to make sure that nobody voices any criticism of anybody else.
  • Even the laws are done to enforce this: you can be convicted of a crime if you voice strong criticism of others and they find out about it or if you say in public anything that might sound in any way as discriminating against a minority.

I'm lucky that I was raised by parents that taught me the value of self control, of saving today to be able to afford bigger and better tomorrow. Who themselves were critical and even rebelious against authority (a member of my family battled for years and was instrumental in getting a serving government minister convicted of corruption in Portugal).

I suspect that at some level you were lucky in a similar way too.

Most people out there were not.

My point: if given a chance, many of today's sheeple would stop being so, thus rather than paint them all with the brush of being worthless we should try and give a way out for the ones are in fact capable of being more than serfs to the machine.

 

Harlequin001's picture

'The whole system is designed to keep people meek, unquestioning of authority and uncritical of "experts". ' - Absolutely true. I was in it once too. 

'My point: if given a chance, many of today's sheeple would stop being so, thus rather than paint them all with the brush of being worthless we should try and give a way out for the ones are in fact capable of being more than serfs to the machine.' - Couldn't agree more. I do not come from a wealthy background myself and I have worked hard for everything I have, and still do. I appreciate the real worth of money, and not the paper variety.

Personally I try never to brand anyone as worthless, but perhaps the bit where we differ is that I have no time for the terminally and professionally stupid, anarchists, and anyone who does nothing but whine yet isn't prepared to help him/herself and expects the State to pick up the tab. I can see from this that we have basically the same views, which is nice to see.

I visited Holland myself once, about ten years ago. Beautiful place and very friendly people. Recently my wife suggested that we move there, and I said I would consider it once we have a better idea of how the collapse pans out. Still, you never know... How is England these days?

Acet's picture

England is in denial. The country doesn't in fact make anything anymore and the only thing keeping it from collapse is that everybody is focusing on the rest of Europe first. If we're lucky, we'll have a decade or two of stagnation. That said, if you followed the Business forums at the BBC news website, you would've seen see an increase in the numbers of skeptics in the last 2 years and, for example, while most people were hopefull during the first round of economic boosting (incl. QE1), of late most do not believe anymore in either politicians or mainstream economists, so maybe there's hope.

Inequality inside the society and between regions has increased as the South-East (mainly London) was spared most of the suffering thanks to the influx of capital through bank bailouts while the rest was allowed to collapse while being made to pay for those bailouts. Meanwhile, the value of having gone to the right University and having the right connections continues to far outweight skill and there is an almost constant string of scandals coming up about influence-peddling and the you-scratch-my-back-I-scratch-yours relationship between politicians and members of certain wealthy and parasitical old-boys networks.

To add insult to injury, the country keeps sliding fast towards a Police State. Certainly, as somebody from a country that was under a Fascist dictatorship not long ago, my tingly senses keep being triggered a lot by the things I see hapenning.

Given that our business is software products, with a global audience as target, me and my business partner are serious considering moving to Portugal taking the business with us, and he's not even from there, though we're also waiting to see how things turn out over there.

Holland is great too: I lived there for 8 years and found it a much more balanced society, where in terms of cultural behaviour, individual ambition tends to be tempered with social awareness. Also the voting system is proportional, so there are no parties sharing a monopoly of power and politicians are under far more pressure to actually do what their electorate wants. On the downside, taxes in there are crazy for individuals and the weather is just as depressing as in England.

 

Harlequin001's picture

'Meanwhile, the value of having gone to the right University and having the right connections continues to far outweight skill and there is an almost constant string of scandals coming up about influence-peddling and the you-scratch-my-back-I-scratch-yours relationship between politicians and members of certain wealthy and parasitical old-boys networks.' - I couldn't have put it better myself.

I left there more than ten years ago when it became clear that I was swapping everything I owned, and everything I would ever own for the possibility of maybe seventy quid a week in handouts if I ever lost my job. That's the welfare state for you. Too expensive to stay. I ran a business there before I left but closed it down when it became clear that there was no limit to how much admin cost the UK govt could and would heap upon me as a small employer. Made a few guys redundant and moved away for good.

I'd like to go back in many ways but just can't afford it, too much tax and giving up my financial future so that the UK govt can take all my money and give it to someone who won't work simply isn't on. I make a lot of money, but I can't afford the 50% rate anymore than anyone else can. I think when the govt realises that taking my capital and giving it to someone who won't work doesn't create jobs, doesn't create wealth and stifles innovation and investment, then maybe we will see circumstances under which I might take my capital back, and use it. Until then it stays in gold bullion offshore. That's the way it is, and the UK can delude itself it's doing well for as long as it wants.

One day I'm sure, Europe will realise that...

 

Breaker's picture

The real effect of promiscuous student lending policies has been a massive transfer of wealth from the productive class in America to the academic class. More specifically, since worthless degrees like Gender Studies, Ethnic Studies etc would probably not exist without huge subsidies, it has been a transfer of wealth to the most useless members of the academic class. The students are just the politically sympathetic vehicles for the transfer to occur.

So the real question is: who pays for the subsidies to the worthless members of the academic class. There are two choices: (1) The students; or (2) The taxpayers.

In many ways, the taxpayers are to blame because they elected the progressive politicians who created the promiscuous student lending policies and who appointed the supreme court justices who can't seem to figure out that Congress has no power to finance and run the education system of the United States. I didn't vote for them. But the majority gets to take my money and use it pretty much however they want. And the majority decided to use it to give a bunch of loans to kids who were getting degrees that would not increase their productivity and who could not get loans under normal credit standards0.

The students are also to blame. But I expect less from an 18 year old offered money and lots of leisure time dicking around in Gender Studies classes than I do from a 50 year old politician, who ought to know better.

AldousHuxley's picture

let's distinguish between academic studies which further human kind forward and others which are just artsy fartsy true now but fades away like a one hit wonder studies.

 

first of all professors earn well but they are not movers and shakers. professors are just worker bees in academia. the transfer of wealth goes from tax payers to.....a hedge fund. educational institutes call this endowments.

 

if you look at the highest paid staff on university payroll, it is the football coaches....the entertainers....the circus leads. why have non-profit designation for an institution which just produces athletes and college sports entertainment on ESPN?

It is up to the leaders to use nation's resources wisely. American spends all of her money on the old and wars. No money for education despite ever increasing worker productivity. Your children not having the same opportunities let alone better opportunities while you work your ass off for uncle sam and the CEO means you have been brainwashed to accept the condition of a slave.

 

Oh regional Indian's picture

The Amatuer Tag on College Sports is the cruellest joke. And college sports is the biggest programming tool schools have. Student reaction to Papa Joe's ouster was a shocking tell eh?

ori

AnAnonymous's picture

It rests on a pseudo discrimination between various acts of production. Some would produce, others wont.

That is the kind of mess you've got in when you focus so much on production you eliminate the very fact that the human activity called production is consumption.

As to football coaches being the most rewarded, it might be because they might be the best advertisers for their university.

College football is a big thing in the US. And college football is somehow what puts places like Oklahoma on the map.

AnAnomalous's picture

 

It rests on a pseudo discrimination between various acts of production. Some would produce, others wont.

Insights bold and mighty, I hail the astuteness of you!

As both we know, all pseudo discrimination is a product of the production of US-European anti-quasi-Chinese citizens, who produce not but consume much, like gluttons of things being they, spirits adrift in fogs of war and TV.

Westernism is a dead-ending road on way to Hell.

Chineseism is one true path to collective glory.

Cathartes Aura's picture

well done AldousHuxley, for daring to mention the sacred sports program, rather than the ubiquitous gender studies meme.

of course, sports benefits culture, it teaches things like balls and running and steroids and how to be manly and shit.

no way should anyone seek to understand how "cultures" are invented and controlled by stamping an identity on humans, then man-ipulating them via their own personas - taking, giving, steering, cheering, creating "privilege" then withdrawing it, resulting in angry displays that stay within the cultural boundaries, and never think to look at those who write the rules.

that would be way too hard to learn - best stick with the balls, oh, and the ball cheerleaders.

Lost My Shorts's picture

In fairness to the fick thucking cow, I think you read it wrong.  She had a softball scholarship (paid by your tax dollars because you love to watch chicks playing softball), but quit softball to focus on her studies, and lost the scholarship, and then got roto-rooted by the banks.

Harlequin001's picture

Well clearly that makes all the difference then doesn't it. Maybe we should just write it off...

I did say 'Metaphorically speaking...', but I take your point.

Cathartes Aura's picture

and of course, Devin, the man in the story, the bull in the family - no mention - whooooooooooosh. . . .

Road Hazard's picture

Harlequin001, you're such a perfect little repugturd. If corrupt politicians can bail out wallstreet, why not show some student loan forgiveness to people in dire need? Wallstreet gets second, third and 4th chances to correct their mistakes, why not let students do the same? Don't get me wrong, I could care less what happens to students who can't repay their loans. Put them in prison or have uncle ben print them a cool trillion. In the end, nobody cares.

StychoKiller's picture

Petting trolls is like looking for fish in the treetops...

mayhem_korner's picture

 

 

Inheritable debt - nice.  Would be even nicer if it could be willed to others.  :D

monoloco's picture

I don't envy the next generation. "Dad died and I inherited 80k in student loan debt and a house with an underwater mortgage."

Comay Mierda's picture

...and he owed taxes so i got the bill, and my passport got revoked so I cant run to sane country

Pool Shark's picture

 

 

We already have "inheritable debt."

Ever heard about the $16,000,000,000,000.00 bill we're leaving to our children?...

 

(P.S, that's $190,000.00 for every US citizen under 25 years old...)

 

 

Bicycle Repairman's picture

It's all about choices.  I choose a cheaper school, a more difficult major that had strong employment possibilities, took 5 years to finish, worked during the school year, didn't incur credit card debt and didn't take a semester overseas.

That's one way to do it.

I could have taken the Army's deal, but Viet Nam queered that.  I certainly wouldn't take it now.

Vampyroteuthis infernalis's picture

BR, I did the same thing. My folks easily pitched in for the undergrad and I paid for my grad degrees. Be smart and you can get to the end nearly unscathed. Most people who find themselves in these kinds of messes were not too bright about the options available.

Fish Gone Bad's picture

In the Viet Nam days, students who went to college were pretty sharp.  There were good job prospects for a college education.  Now-a-days schools are popping up all over the place and everyone "deserves" to go to college, thereby cheapening an "honest" degree.

LetThemEatRand's picture

In the Vietnam days, many people who went to college went to college to avoid fighting a pointless war.  There was a draft.  Dick Cheney and George Bush avoided it, along with almost every other major political figure of the time.   

AldousHuxley's picture

draft was a test to see who is stupid enough to die for dicks like cheney.

of course politicians are sly and street smart so almost all of them found ways to get out of it.

 

workers bess are learning that corporations fight another kind of war...economic war.

of course politicians are sly and street smart so almost all of them never had to compete in market economy and come from government or family money backgrounds.

 

what's better than patriotism? cold hard cash

what's better than cold hard cash? power over nation's assets and people.

AnAnonymous's picture

draft was a test to see who is stupid enough to die for dicks like cheney.

______________________________________________

Ummmmmm.

Actually, in those days, US citizens living in the US put a floor to stupidity.

Remember one of the funniest US citizen story ever?

Cassius Clay?

This US citizen negro was rejected by the Army, assessed as physically fit, but intellectual improper.

Later, as US citizens figured out that they would need some kind of extra expendable cannon fodder, Clay was reinstated in the honourable status of able fighting male.

Clear sign that actually, it was a priviledge for US citizens to fight for the likes of Cheney.

maximin thrax's picture

Vietnam - For young men, the end of the romanticized war experience and the beginning of the romanticized college experience.

Cassiopia2011's picture

I disagree. You may have been one of the privileged. Quote: "My parents easily pitched in..." How easy it is for one of the privileged to tell the rest of us to "be smart." Also, maybe we are not "too bright" even though we scored in the top 3% on national IQ but were sorely victimized by life circumstances?

maximin thrax's picture

Depending on the time, given how much faster the cost of a college education has grown in excess of wages, his parents could have pitched in to help and have been solidly middle class. My parents helped me back in the '80s, when a quarter's tuition, room and board at the state college was a couple of thousand dollars.

Backspin's picture

Agreed.  Personally, I love school, and I would love to finish my masters degree.  However, I work instead.  I think it would be fun to lie around on the couch studying all day.  I did that in my udergraduate days.  Learned a lot.  But now I work.  Maybe these people should have been content with less school and a little more productive work.

ebworthen's picture

Working at Chipotle is productive?

TuesdayBen's picture

Sure.  Chipotle employees produce and serve delicious, affordable food.

Consider banksters.  They produce tools of enslavement and serve themselves.

Fish Gone Bad's picture

Banksters are just pure evil.  Their only purpose is get people into debt so they can get a bonus.  Student loan debt, mortgage debt, car debt, whatever.  A borrower's stupidity is a bankers paycheck.  I wouldn't be surprised to find out that all the loan servicers are owned by banks as well.

tarsubil's picture

I know a kid who worked since the age of 12 and never went to college. He is 20 years old and has 100k in the bank. I'd only go to college to be an engineer at this point. That is probably the only college degree worth anything anymore.