College Debt: Who's To Blame For Students' Suprime Loans?

[Inflation]

Stop blaming the kids. They are the victims.

They are sold massive loans, with glittering fraudulent promises of lucrative future salaries, and duress from threats of becoming an Untouchable blue collar failure.

This happens when they are 17 or 18 years old, barely past the age of consent.

Fathers and mothers that would never let nasty old bankers have their way with their sons or daughters willingly offer them up, for decades of financial rape.

Today, students have sky high tuition and no jobs to look forward to.

Home ownership, which every previous generation could achieve with a reasonable amount of work, is a relic of the olden days for them. A degree is sold to them as the only path to class mobility.

The previous generations have let them down, on a massive scale.

And then they get blamed for seeking an education cum union card, because they have become overpriced.

Nice way to blame the victim. Societies and individuals are judged on how they treat their most vulnerable, such as barely legal high school seniors being pressed into making snap decisions about the Rest of Their Life.

We don't let them borrow $100,000 to start a business, invest, or anything else.

But education is the Special Exception; a life in debt slavery is promoted and accepted For The Childrens.

 

[bobbyw24]

Mish's take on this

Students fresh out of college, six-figures deep in debt, face decades of debt slavery. Both parents and students are wondering what went wrong. Please consider Placing the Blame as Students Are Buried in Debt.

What Went Wrong?

Supposedly "Ms. Munna and her mother, Cathryn, have spent the years since her graduation trying to understand where they went wrong."

It should take seconds. Going $100,000 in debt to get an interdisciplinary degree in religious and women's studies seem rather foolish to say the least. Exactly what kind of job did Ms. Munna expect to get with that degree?

Now she is working for a photographer and it is plain to see her degree is totally useless.

Ms. Munna and her mom should look in a mirror to see who to blame.

Recognizing the Enabler

Although Ms. Munna should blame herself, there is a huge enabler of these kind of tragedies: Pell Grants and government loans.

Subprime Goes to College

Inquiring minds are reading the Eisman ira sohn conference slides and speech-5-26-10 presentation called Subprime Goes to College.

http://globaleconomicanalysis.blogs...lysis+(Mish's+Global+Economic+Trend+Analysis)

 

[Dark Aerow]

Students fresh out of college, six-figures deep in debt, face decades of debt slavery. Both parents and students are wondering what went wrong. Please consider Placing the Blame as Students Are Buried in Debt.

What Went Wrong?

Supposedly "Ms. Munna and her mother, Cathryn, have spent the years since her graduation trying to understand where they went wrong."

It should take seconds. Going $100,000 in debt to get an interdisciplinary degree in religious and women's studies seem rather foolish to say the least. Exactly what kind of job did Ms. Munna expect to get with that degree?

Now she is working for a photographer and it is plain to see her degree is totally useless.

Ms. Munna and her mom should look in a mirror to see who to blame.

Recognizing the Enabler

Although Ms. Munna should blame herself, there is a huge enabler of these kind of tragedies: Pell Grants and government loans.

Subprime Goes to College

Inquiring minds are reading the Eisman ira sohn conference slides and speech-5-26-10 presentation called Subprime Goes to College.

http://globaleconomicanalysis.blogs...lysis+(Mish's+Global+Economic+Trend+Analysis)

I love Mish, but I disagree with him pretty strongly on this, those loans would have NEVER been made if the government hadn't been involved so heavily in the student loan market.

A loan is supposed to have 2 parties involved, each taking on part of the risk. The person giving out loans in the student loan market has extremely little of the risk, no matter how absurd or risky the loan is.

The 2 way street between the person giving a loan and the person receiving a loan is more like a one way street with government vehicles racing down the street at full speed running over students trying to go up the one way street. What are the government vehicles doing you might wonder? Well, their on their way to deliver profits and special privileges to the bankers of course!

EDIT: I read more of the article, he covered pretty much all the bases, although i still disagree with him about where the blame for the situation belongs.

 

[Stary Hickory]

The students ARE responsible period. I grow tired of people both wanting freedom and then the freedom to unload the consequences for their bad descions on others.

I went to a very reasonable college and was careful about what I studied. I had scholarships to go to expensive art schools but did not go because I doubted by ability to make enough to repay the loans.

If you want your freedom then take responsibility for your own actions. The students are not the victims, they are taking resources and money and then not repaying it. The banks more than liklely would never give out such loans unless strict laws prevented people from ditching the loans and if there were not government garantees.

Now people are here supporting changing the terms of these loans AFTER the fact. This is wrong, it violates property rights.

 

[Dark Aerow]

The students ARE responsible period. I grow tired of people both wanting freedom and then the freedom to unload the consequences for their bad descions on others.

I went to a very reasonable college and was careful about what I studied. I had scholarships to go to expensive art schools but did not go because I doubted by ability to make enough to repay the loans.

If you want your freedom then take responsibility for your own actions. The students are not the victims, they are taking resources and money and then not repaying it. The banks more than liklely would never give out such loans unless strict laws prevented people from ditching the loans and if there were not government garantees.

Now people are here supporting changing the terms of these loans AFTER the fact. This is wrong, it violates property rights.

The borrower is only half of the equation, and yes they should take responsibility for their short-sighted actions. However I think it's a measure of gross imbicility to lay the blame for the situation entirely or even mostly on them. That does us no good and serves to distract from the ones who created and take advantage of this twisted loan market.

The government created a situation that allows lending institutions to prey on clueless government educated high school students. Without having to take on any of the risk associated with giving loans to students for degrees that will never be useful.

 

[Southron]

I suspect in high school they were bombarded with propaganda that a piece of paper is what they need to be successful in life.

At the same time they were told they can be anything they want to be.

Don't fall for the lies.

Debt is slavery.

 

[Lovecraftian4Paul]

I suspect in high school they were bombarded with propaganda that a piece of paper is what they need to be successful in life.

At the same time they were told they can be anything they want to be.

Don't fall for the lies.

Debt is slavery.

Bingo. When you consider most college bound students are probably public school educated, then you begin to understand why it isn't fair to slam down full blame on ignorant students' heads.

It takes a very unique set of circumstances to beat the college trap in today's world: iron discipline, a freakish obsession and talent with what one wants to do in life, stable parents capable of passing down sound financial/career advice, and/or immunity from the public school's college first pro-debt propaganda. Having all or just a few of these traits in your favor at 16-20 years old is like winning a small jackpot.

I think that getting a real financial/career based return on an academic investment has always required a little luck. Unlike in the past, though, too many kids and families are willing to sign onto years of slavery with little idea what they're getting into.

One more point on why the kids don't deserve total blame: many student loans require parents or guardians to co-sign, elders who should be much more financially savvy about monster debts. The public in general has been conditioned to accept a deb peonage, as we all know here. If a society's dominant generation can't be bothered on the whole to refrain from wracking up big credit card and car loan bills, let alone save for their children's education, how on earth do you expect their offspring out of public high school to think critically about big student debt?

 

[Stary Hickory]

The borrower is only half of the equation, and yes they should take responsibility for their short-sighted actions. However I think it's a measure of gross imbicility to lay the blame for the situation entirely or even mostly on them. That does us no good and serves to distract from the ones who created and take advantage of this twisted loan market.

The government created a situation that allows lending institutions to prey on clueless government educated high school students. Without having to take on any of the risk associated with giving loans to students for degrees that will never be useful.

Well then you must support restricting their freedom so that they cannot make such bad decisions? You simply cannot have students not responsible for their loans and free to take out loans. This cannot be.

 

[Dark Aerow]

Well then you must support restricting their freedom so that they cannot make such bad decisions? You simply cannot have students not responsible for their loans and free to take out loans. This cannot be.

Why the crap would you think that?

People should be free to make whatever choices they want as long as they don't initiate any acts of aggression toward other individuals and people should be held accountable for their actions.

I want all the laws that create horribly perverse distortions in the student loan market to be repealed...NOW. The problem is not the students making bad decisions. The REAL problem is the laws that cause, allow and even encourage all these bad decisions to be made in the first place.

I NEVER said that students who made bad decisions should be given a "bailout" or a "get out of jail free card" or anything like that.

 

[Stary Hickory]

Why the crap would you think that?

People should be free to make whatever choices they want as long as they don't initiate any acts of aggression toward other individuals and people should be held accountable for their actions.

I want all the laws that create horribly perverse distortions in the student loan market to be repealed...NOW. The problem is not the students making bad decisions. The REAL problem is the laws that cause, allow and even encourage all these bad decisions to be made in the first place.

I NEVER said that students who made bad decisions should be given a "bailout" or a "get out of jail free card" or anything like that.

Students are using force to initiate violence against others when they use the force of government to alter contracts so they are no longer liable...AFTER entering into an agreement and receiving resources, services, and funds.

Initiating violence personally or using the government to do it on your behalf is the SAME thing. And what laws are you talking about? Because what I am hearing is students are not responsible for their actions and others should bear the burden for these student's actions. All government funding ought to be removed from colleges PERIOD.

Students should either take private loans or pay out of pocket. But in the end no matter what laws you say exist, students have the option of not going to crazy expensive schools or not taking loans at all.

 

[Lovecraftian4Paul]

By the way, Sallie Mae recently sold off some of their bad student loans to the Department of Education. Once again, the state's debt-slave proxies get a bailout by selling off anything that might cause them financial harm.

The students are not at fault. There is no such thing as a private student loan industry anymore. There is no longer any risk to the lender and total risk to the borrower.

 

[HOLLYWOOD]

By the way, Sallie Mae recently sold off some of their bad student loans to the Department of Education. Once again, the state's debt-slave proxies get a bailout by selling off anything that might cause them financial harm.

The students are not at fault. There is no such thing as a private student loan industry anymore. There is no longer any risk to the lender and total risk to the borrower.

Amen! You forgot to include the American Taxpayers are also liable for loan losses through the muddy political waters designed by the fraudsters.

What sucks are your chances of being hired without a full undergraduate degree get slimmer and slimmer each year. Company HR departments, really Industrial Relations are idiots too.

BTW, I see College professors now receiving record salaries.... Hmm.

 

[Stary Hickory]

By the way, Sallie Mae recently sold off some of their bad student loans to the Department of Education. Once again, the state's debt-slave proxies get a bailout by selling off anything that might cause them financial harm.

The students are not at fault. There is no such thing as a private student loan industry anymore. There is no longer any risk to the lender and total risk to the borrower.

Absolutely ridiculous. The students then are dumping the loans on society. If the government pays for it, then WE pay for it. If it is monetized then WE pay for it. The students are responsbile for debts they incur. It was their actions that caused a debt to occur. They requested a loan from the banks.

If they are too ignorant to handle their finances then maybe they should be banned from getting loans at all. I repeat you cannot be both free to take such loans and also free to dump the costs on everyone around you.

The students are at fault. The only excuse I see here given is that they are too stupid to know any better. Then I repeat if they are mentally incapable of being held responsible for their actions, then their actions should be also be restricted because they are mentally incapable. I am not advocating restricting people's actions but I am also against some pushing negative consequences of their own actions onto others.

 

[JVParkour]

I think it is almost everybody's fault. Students in that they took the loan, teachers and schools for ingraining the idea that you won't make any money unless you go to college, banks because they allow it, and the governments, well because they are the government!

 

[libertybrewcity]

definitely the students but that doesn't make it right for the government to subsidize the loans. it is very tempting to take "free" money and use it for whatever you want like housing, food, books, etc.

 

[Lovecraftian4Paul]

Absolutely ridiculous. The students then are dumping the loans on society. If the government pays for it, then WE pay for it. If it is monetized then WE pay for it. The students are responsbile for debts they incur. It was their actions that caused a debt to occur. They requested a loan from the banks.

If they are too ignorant to handle their finances then maybe they should be banned from getting loans at all. I repeat you cannot be both free to take such loans and also free to dump the costs on everyone around you.

The students are at fault. The only excuse I see here given is that they are too stupid to know any better. Then I repeat if they are mentally incapable of being held responsible for their actions, then their actions should be also be restricted because they are mentally incapable. I am not advocating restricting people's actions but I am also against some pushing negative consequences of their own actions onto others.

WRONG. The students would be dumping the loans on society if they were able to sell their debt to the state. Sallie Mae is the party doing this, not students. Instead, it is the lender, because they want free reimbursement without the punishment for making a loan that can never be paid back.

Government should not be buying bad debt from students or their lenders. But because students CAN'T sell their debts to the government, it is the student loan companies at fault since they are able to do this, and the government is more than willing to accommodate them.

You repeatedly ignore the fact that student loans are exempt from being dischargeable in bankruptcy like many other forms of irresponsible debt. You ignore the lucrative connections government cronies have long had with the student loan industry, creating rules that favor them. All you want to do is blame the students when they are stuck in a system designed to remove all risk from the lender.

If the government would not buy these bad debts, Sallie Mae might fail and start a domino effect that would liquidate the bad debt and eventually lower tuition prices without all this easy money floating around. Now, there is zero incentive for schools to even try to keep costs reasonable when government props up their "private" friends in the student loan industry.

 

[Lovecraftian4Paul]

Amen! You forgot to include the American Taxpayers are also liable for loan losses through the muddy political waters designed by the fraudsters.

What sucks are your chances of being hired without a full undergraduate degree get slimmer and slimmer each year. Company HR departments, really Industrial Relations are idiots too.

BTW, I see College professors now receiving record salaries.... Hmm.

That's a good point. Employers are taking the bait and contributing to the problem too. Who hasn't seen low skilled jobs posted where they a two or four year degree?

This just encourages even more people to flood into college for useless degrees and debt they can never get rid of if their youthful idealism and social mores lead them into a terrible decision.

 

[LibForestPaul]

I majored in history and if it weren't for going to law school, I probably would not have a job. Although nowadays that doesn't help much either. LOL

Since you brought it up. I was actually contemplating law school. My current profession pays well, but alas, I am nothing but "skilled labor". I was investigating PC (professional corporation) careers ...(accounting, vet, pt, law, etc...) and law seems well suited for my skills. My practice LSAT is 75-85% range, so I will likely not get any help paying for law school (smart not gifted). Unless top grad or top tier school, I have heard law degree will not pay for itself?

 

[LibForestPaul]

they still have full responsibility. If someone who can barely handle "wiping their own ass" shoots and kills someone, they still have full responsibility for their actions--if they signed the loan, they need to abide, in full, by its terms, no matter how draconian.

If they don't read the loan (or take the time to understand it or find someone that does) then that is their own fault--a contract is a contract.

The banks should have done their due diligence and calculate the associated risks and charge appropriate rates.

They failed, and should bare the fallout from their lack of effort.

 

[Dark Aerow]

WRONG. The students would be dumping the loans on society if they were able to sell their debt to the state. Sallie Mae is the party doing this, not students. Instead, it is the lender, because they want free reimbursement without the punishment for making a loan that can never be paid back.

Government should not be buying bad debt from students or their lenders. But because students CAN'T sell their debts to the government, it is the student loan companies at fault since they are able to do this, and the government is more than willing to accommodate them.

You repeatedly ignore the fact that student loans are exempt from being dischargeable in bankruptcy like many other forms of irresponsible debt. You ignore the lucrative connections government cronies have long had with the student loan industry, creating rules that favor them. All you want to do is blame the students when they are stuck in a system designed to remove all risk from the lender.

If the government would not buy these bad debts, Sallie Mae might fail and start a domino effect that would liquidate the bad debt and eventually lower tuition prices without all this easy money floating around. Now, there is zero incentive for schools to even try to keep costs reasonable when government props up their "private" friends in the student loan industry.

BINGO!

Thats exactly what I've said/been trying to say.

Excellent post.