JUST SAY NO To Student Loan Bailouts

Good discussion.

With 11% delinquency rates, the student loan bubble is about to pop.  Kudlow is deeply suspicious taxpayers will be covering the check.

Chart from ZH:

As of September 30, Federal (not total, just Federal) student loans rose to a gargantuan $956 billion, an increase of $42 billion - the biggest quarterly jump since 2006.

A personal note -- when I graduated from the University of Virginia in 1988, as an out-of-state student, the tuition bill for 4 years was approximately $25,000.  In 2012, that wouldn't buy a year at UVa.  So much for Jefferson's academic utopia.

Spout off.  Should we bailout student loans...?

Comments

[JosephConrad]

Just say NO to REPAYING a U.S. Student Loan! Turnaround is fail play. The banks Raped the students with userous loans. Now it is tiem for the students to RAPE the bankers. They MUST DEFAULT and end this Israeli Banking Enrichment Program!

[Steve Macintyre]

I let the Art Institute's financial aid office take out loans in my name after they promised me some of the best training this side of pixar. After an initiial 120k debt, I'm unemployed after being underemployed, and the debt has inflated to 265,000 dollars and who knows how large it will be when I'm able to begin making payments on it. I expected superior training in 3D art and animation and instead, the 'education' was sub-par, insubstantiative, and nothing less than a joke. The school does not prepare anybody for the fields they promise to get you prepared for. I have found better training for free on smaller sites and I wish I knew about them before I got dragged into this fraudulent scam. Please follow my website link for more info.

[Cheyenne]

You are exactly right, fellas. It's the LENDER who should eat the student loan shit sandwich here, not the borrower. The same is true of nonprime home loans that went bad. The lender is in a FAR superior position to the borrower when assessing the risk of loan default.

The lenders make these loans knowing full well that they'll default. Why? Two reasons. First, they collect fees when making the loan. Second, they sell the loan (which is commercial paper) onto to securitizers who bundle the loans and sell them on to investors. This is EXACTLY the fraudulent dynamic at work in the securitization of home loans. You see, once Wall Street got away with a multitude of frauds in connection with home loans, it predictably ran the same fraud again with credit cards, used car loans, and yes, student loans.

And yet none of these sophisticated financial institutions is EVER made to bear ANY responsibility, either through prosecutions for fraud or through write-downs of the debt. In the mean time, the media peddles the absurd fiction that the borrowers are 100% at fault.

[jiohn]

De Shaws 'Alkali Fund'

Pay attention to Page 8 and 9

http://sdcera.granicus.com/MetaViewer.php?view_id=2&clip_id=478&meta_id=53490

[john]

De Shaws 'Alkali Fund'

Pay attention to Page 8 and 9

http://sdcera.granicus.com/MetaViewer.php?view_id=2&clip_id=478&meta_id=53490


Note: with all the scandals involving renewable energy Especially Larry Summers and DE Shaw, I found this and thought with all the news surrounding student loans that it was worthy of putting here. Copy before it disappears. The Name 'Alkali' is quite striking.

[john]

Update: States sue Trump over Obama's student loan fiasco.

http://mobile.reuters.com/article/BigStory12/idUSKBN19R28Y