zer0hedge - Student Debt Bubble Officially Pops

[aloneibreak]

http://www.zerohedge.com/news/2012-11-2 ... ncy-rate-g

[John_doe]

cant say i didnt call it.there were a few people saying this would happen however.

viewtopic.php?f=17&t=16203&hilit=student+loan+bubble

[John_doe]

time to face the music.

[Country]

Private student loan debt is NOT dischargable when you declare bankruptcy. This kind of debt as it currently stands is SLAVERY. Worse yet, if your parents co-sign the loan, it's their debt too UNTIL DEATH, or you pay it off. IMO, the ever increasing tuition at our Colleges and Universities, is a direct result of the private student loan debt complex.

[Engineer]

IMO, the ever increasing tuition at our Colleges and Universities, is a direct result of the private student loan debt complex.

I've been saying that for years, but nobody wanted to hear it. The only way to cut bloated college budgets down to size is to get rid of the loans and most of the grants.

Likewise with healthcare, getting rid of forced insurance coverage would cause prices to drop as people turned to market driven alternatives.

[John_doe]

http://www.youtube.com/watch?v=g3hc6LoAlu0


pile driver......ye be warned

[mbailey1234]

So what is the process when someone defaults? It says you can't discharge the debt in bankruptcy. But if the loans are guaranteed by our government, what does that mean? Just allows the banks to give you a better rate for the time being? You can tell the bank to go eff off and as long as you have no assets they are screwed? At what point do they just default and let the taxpayers pick up the tab? But if it's not dischargable?? I'm sure TPTB aren't just going to hang a lifetime IOU to these people (and their parents).

[John_doe]

So what is the process when someone defaults? It says you can't discharge the debt in bankruptcy. But if the loans are guaranteed by our government, what does that mean? Just allows the banks to give you a better rate for the time being? You can tell the bank to go eff off and as long as you have no assets they are screwed? At what point do they just default and let the taxpayers pick up the tab? But if it's not dischargable?? I'm sure TPTB aren't just going to hang a lifetime IOU to these people (and their parents).

And this is why I'm bailing out of the dollar.

[Engineer]

So what is the process when someone defaults? It says you can't discharge the debt in bankruptcy. But if the loans are guaranteed by our government, what does that mean? Just allows the banks to give you a better rate for the time being? You can tell the bank to go eff off and as long as you have no assets they are screwed? At what point do they just default and let the taxpayers pick up the tab? But if it's not dischargable?? I'm sure TPTB aren't just going to hang a lifetime IOU to these people (and their parents).

If I remember correctly, the IRS helps to go after government backed student loans. This means they'll confiscate tax returns and the like to help repay the debt.

What it means for the borrower is they'll get kicked out of our progressive tax system, and their kids will pay the price for their bad decisions as child tax credits are forwarded to the banks instead of the children.

[eventurer]

IHMO Its just like with the housing market and when you take away risk you break the system... some people dont deserve loans...

"The trouble is, while losses and write-downs of credit-card debt typically fall on banks and private-sector lenders, in the case of student debt, it is largely taxpayer dollars at risk. And the student-debt pile only keeps growing. After first surpassing credit-card debt in mid-2010, the amount of student-loan debt outstanding has quickly surged to become 42 percent larger than the $674 billion of credit-card debt outstanding as of September."

[shinnosuke]

And ain't it a crying shame that all the easy money was paying the salaries of tenured professors who were filling the minds of the youth with hogwash liberal ideas.

Some of the worst offenders, in terms of issuing worthless degrees and getting a lot of government largesse, are the for-profit colleges like University of Phoenix and DeVry UNiversity. What a joke those degrees are. Graduate in a year and a half with a piece of paper that takes 4 years at a legit place.

[Engineer]

Graduate in a year and a half with a piece of paper that takes 4 years at a legit place.

I remember taking several years worth of hogwash classes called prerequisites.

[shinnosuke]

Graduate in a year and a half with a piece of paper that takes 4 years at a legit place.

I remember taking several years worth of hogwash classes called prerequisites.

No doubt. The system is good and truly messed up. But, uhm, what do you have against washing hogs?

[Engineer]

Graduate in a year and a half with a piece of paper that takes 4 years at a legit place.

I remember taking several years worth of hogwash classes called prerequisites.

No doubt. The system is good and truly messed up. But, uhm, what do you have against washing hogs?

There's not enough room in the shower, and they might get the idea that its ok to spend the night!

[DTEJD1997]

I can tell you what happens when you default.

I know. I defaulted after law skool.

Not a whole lot happens at first. Your credit is ruined. The IRS will seize your tax refunds. They can garnish your wages too. They can take a percentage of your Social Security too. Theoretically, they can attach your assets, bank account, other assets not protected by bankruptcy.

If you are self employed, or living in the cash economy, there is not much that really happens to you. You've got to be careful.

HERE IS WHAT THEY DON'T TELL YOU!!!!

After a few years, I wanted to get my life back on track and wanted to continue repayment of my student loans. They will tell you the amount you will pay. no negotiation here. You will pay it for 12 months, and you can't be late or miss a payment. The payments are going to be high. This is your "rehabilitation" period. My payments were $1450 a month.

After 12 months you are "rehabilitated". Your credit score is repaired as to student loans.

HOWEVER, payments during rehabilition are simply PENALTY payments. They do NOT count towards interest OR principal. I was charged over $15,000 in "penalty" payments.

They will assess you up to a 20% penalty for defaulting. That can be VERY substantial.

There should be a penalty for defaulting, but $20k fees are a bit much. Especially considering the loans are NOT dischargeable.

Mark my words, the student loan problem is DEEPER than most people realize. It is a BIGGER problem than most think.

Going to law skool was one of the worst mistakes of my life. I had a relatively modest amount of debt. People graduating today have 2 to 3 times the debt I did. It has taken me YEARS & YEARS of hard work to get it under control. I've paid a LOT of money (more than I borrowed), and I've still got a ton to pay off.

The skools are out of control. They need to be "adjusted".

[John_doe]

Most of the problem is with the mis-education. The curriculum they used when I was there was garbage.

I could have walked into a library and taught myself a lot more for a lot less. I'm thinking there is quite a bit of corruption in the board of education.


That being said I paid for my school in cash. I'm not about to go jump off that cliff. Please don't make me pay for your "education".

[DTEJD1997]

John Doe:

Paying for your own education is certainly fine & good. That is the way it should be....

HOWEVER, why do skools & "educators" get a pass? Specifically, why do they get to lie? Why do they have no stake in the outcome of their students?

Why do skools get to say, "we have 96%+ employment for our graduates. Their average starting salary is $80k"? Many schools are NOTORIOUS for inflating their employment/salary figures. As a student, you presume the skools are accurate in their statements, or reasonably so...Then you graduate to find out that the employment rate is more like 65% and the average starting salary is $40k.

I'll tell you why skools put out false figures. If they told the truth, students would NOT sign up for the debt. The skools are committing fraud to get money of course!

Why should students be exempted from bankruptcy protection?

Why should "edukators" not have any stake in the outcome of their students? They get paid in FULL, UP FRONT. They life a good life and meanwhile their students suffer.

I could on & on about this.

What about "for profit" skools? They should be cut off from federal student loans. If they offer a good product, let them loan their own money!

[Kurr]

Sounds like a sweet deal for the "financial gurus" or "tptb".

Anyone got a feeler on the "student loan backed securities" type thing? We saw the big debacle resulting from the sale of fraudulant "mortgage backed securities", where they bundled worthless loans (ones that no hope in heck of ever being repaid) and sold them to investors to line their own pockets. Now what would those same people do with a similiar amount of loans that could never be defaulted on and could be added to with massive amounts of penalties and would you feel comfortable hazarding a guess as to what the outcome will be this time around versus what came out of the MBS thing (quantitative easing 1, 2, and infinity)?

It has now been revealed that the whole QE/Inf situation has come about so the FED can quietly buy back all those fraudulant mortgages and rescue the investors without having to face the purchasers for selling them criminally fraudulant paper.

I'm sure this whole student loan push is tied in there somewhere, I just don't know how.

Edit:
Unless we're just talking about simple debt slavery where the debtor must take the best paying jobs available in his field working at corporations he despises rather than try to set himself up and bring innovation and competition into the market , working for years or decades at these places, doin what "the man" wants rather than following his own heart till the loans are repaid. But that would be kind of an indentured servitude of a sort, would it not?

[John_doe]

http://www.youtube.com/watch?feature=en ... qG0Tg&NR=1


RUN AS FAST AS YOU CAN FROM THE DOLLAR.

[eventurer]

[barrytrot]

Ok, at 30:30 the guy is burning his Law Degree and License to Practice law while calling them worthless. That's not true. Those are "rights" to practice a pretty good job. That really hurt the message of the film.

[barrytrot]

Ok, at 38:46 they claim that the AVERAGE 19 year old is earning $35,400!

That is flat BULL-PUCKY.

This video is actually pretty entertaining but not very educational.

[John_doe]

it is made by the NIA, peter schiff was blasting them for pumping stocks.

[barrytrot]

One thing that most extreme groups do is claim the "mainstream media is intentionally working against the United States".

Maybe.

But it's been said about TOO MANY DIFFERENT THINGS. They can't be simultaneously doing all this evil. One or two things? Ok. But every single fringe group claims the "mainstream media" as a key intentional catalyst of the problem they cite.

[barrytrot]

And the people that created this video think it's a strong argument to cite completely anecdotal "facts" about pharmacists. One "example" they cite is a guy that MAILED HIS RESUME to dozens of places and didn't get a call back. That guy does NOT know how to get a job. Mailing your resume is a complete waste of time. Call someone. Go down to the building. Etc. I could cite ignorant people to prove any point I wanted to quite easily.

This thing just keeps getting worse.