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The First Crack: $270 Billion In Student Loans Are At Least 30 Days Delinquent
The Zero Hedge ^ | 03/25/2012 | Tyler Durden

Posted on 03/25/2012 3:36:18 PM PDT by SatinDoll

Back in late 2006 and early 2007 a few (soon to be very rich) people were warning anyone who cared to listen, about what cracks in the subprime facade meant for the housing sector and the credit bubble in general. They were largely ignored as none other than the Fed chairman promised that all is fine (see here). A few months later New Century collapsed and the rest is history: tens of trillions later we are still picking up the pieces and housing continues to collapse. Yet one bubble which the Federal Government managed to blow in the meantime to staggering proportions in virtually no time, for no other reason than to give the impression of consumer releveraging, was the student debt bubble, which at last check just surpassed $1 trillion, and is growing at $40-50 billion each month. However, just like subprime, the first cracks have now appeared...

(Excerpt) Read more at zerohedge.com ...


TOPICS: Business/Economy
KEYWORDS: bubble; debtbomb; education; studentloans
Student loan programs: the debt load has just passed $1TRILLION DOLLARS and is accumulating at 40 to 50 BILLION per month!!!

We have met the enemy, and it is us.

1 posted on 03/25/2012 3:36:29 PM PDT by SatinDoll
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To: SatinDoll
they will never be repaid. just get your head around that.

It may be a bit of poetic justice, insofar as a college "education" is less likely to prove to be an oxymoron. Of course, I guess 50 grand a year isn't too much to pay for all the "action" these kids get when they're "at school."

2 posted on 03/25/2012 3:38:57 PM PDT by the invisib1e hand (obamacare is an oxymoron.)
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To: the invisib1e hand
less likely to prove to be an oxymoron.

s/b "likely to prove to be an oxymoron." glad I dropped out, or it would have been worse.

3 posted on 03/25/2012 3:40:32 PM PDT by the invisib1e hand (obamacare is an oxymoron.)
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To: SatinDoll

Hire Vinny’s Collection Agency


4 posted on 03/25/2012 3:41:06 PM PDT by YHAOS (you betcha!)
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To: the invisib1e hand

50 grand a year and the best a lot of them can do is go back home and live in the basement.


5 posted on 03/25/2012 3:41:52 PM PDT by Farmer Dean (stop worrying about what they want to do to you,start thinking about what you want to do to them)
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To: Farmer Dean
the lucky ones get their parents' apartment in the city, where they become even more obnoxious.

I'm a little tired of walking around their puke on the sidewalks on Saturday morning.

6 posted on 03/25/2012 3:44:21 PM PDT by the invisib1e hand (obamacare is an oxymoron.)
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To: SatinDoll

Provided Uncle Sam is around, these “borrowers” will simply be garnished for a long, long time.


7 posted on 03/25/2012 3:48:41 PM PDT by Michael Barnes (Obamaa+ Downgrade)
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To: SatinDoll
and so it begins...
8 posted on 03/25/2012 3:50:03 PM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: the invisib1e hand

I had a student loan back in the late 1970s. I paid it off during the recession of the 1980s, so I know others can, too.

It is the brazen lack of integrity by people taking out these loans I find appalling.


9 posted on 03/25/2012 3:50:14 PM PDT by SatinDoll (No Foreign Nationals as our President!)
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To: Chode

Yes, that was my first reaction: this could be the bubble pop that leads to an array of debt dominoes falling, one after the other, into a deprssion chasm.


10 posted on 03/25/2012 3:52:53 PM PDT by SatinDoll (No Foreign Nationals as our President!)
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To: YHAOS

You DO realize a LOT of people won’t “get” that statement.

:)


11 posted on 03/25/2012 3:53:12 PM PDT by Bradís Gramma (PRAY for this country like your life depends on it......because it DOES!)
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To: SatinDoll
yup, at $270B, pretty soon you're talking real money...
12 posted on 03/25/2012 3:57:26 PM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: SatinDoll

waiting for the leftists to start protesting “big education” as tuition costs have risen much faster than health care (or long-term oil)

waiting

waiting

waiting....


13 posted on 03/25/2012 3:57:39 PM PDT by PGR88
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To: SatinDoll

In the 60’s, late 70’s are colleges produced ENGINEERS.

Today, our colleges produce Gay, Lesbian and Transgendered Studies Majors, like Sandra Fluke.


14 posted on 03/25/2012 3:57:39 PM PDT by tcrlaf (Election 2012: THE RAPTURE OF THE DEMOCRATS)
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To: SatinDoll
Terrible. Glad that at least these thief's will have crappy credit scores and won't be able to do anything worthwhile for a long time.
15 posted on 03/25/2012 3:57:40 PM PDT by napscoordinator (A moral principled Christian with character is the frontrunner! Congrats Santorum!)
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To: Chode

Obama took over student loads so everyone could have a free college education


16 posted on 03/25/2012 4:13:53 PM PDT by molson209
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To: SatinDoll
Why, just one little IndyMac Bancrap letter...
17 posted on 03/25/2012 4:23:34 PM PDT by StAnDeliver (What's good for the goose...)
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To: molson209
and hopefully nobody will hire them with a loan default on their credit history... so much for their free lunch
18 posted on 03/25/2012 4:34:03 PM PDT by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: Brad's Gramma
Keep up as best you can.
I miss sumptin every now and then too.
(grin)
19 posted on 03/25/2012 4:42:11 PM PDT by YHAOS (you betcha!)
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To: SatinDoll

Can someone please point to the place in the Constitution where college is guaranteed by the govt? Never mind, I remembered that we no longer live in a Constitutional country, but a Progressive sewage dumping ground. Hillsdale College has a Constitutional class everyone should take. Its the only hope for our Republic.


20 posted on 03/25/2012 4:43:34 PM PDT by cattledogfan
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To: YHAOS

Me? I know exactly who Vinnie is!

:)


21 posted on 03/25/2012 4:52:24 PM PDT by Bradís Gramma (PRAY for this country like your life depends on it......because it DOES!)
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To: Farmer Dean

One thing hardly ever mentioned, know it works because it worked for me - the Army. Went _back in_ the .mil after racking up serious credit card and student loan debts. It’s not for everyone of course though, but it should be offered as an option for serious consideration. Sometimes even the suggestion garners an inordinate negative response. ‘Jus Sayin’.

Gets one out of the basement. Seems to me people should scale back their spending on “higher” education and maybe expectations in some instances. Fact is, College isn’t for everyone in the same sense that neither is the Army.

My best experience with student loans was looking back at it, had to call for a payoff, (about 10 years early) right? Seems to me not many people do this now that think about it.


22 posted on 03/25/2012 5:31:39 PM PDT by Freedom4US
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To: tcrlaf

The good news is, that recent college graduates will probably be more likely to get your order right at the fast food places.

The bad news is, they will be more likely to spit in it.


23 posted on 03/25/2012 5:43:38 PM PDT by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: napscoordinator

I’m not sure that there is any way to discharge some types of student loans. Bad credit might be the least of their problems. Some people have actually left the US over them. Generally, bill collectors won’t try to deal with working overseas.


24 posted on 03/25/2012 5:49:41 PM PDT by The Antiyuppie ("When small men cast long shadows, then it is very late in the day.")
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To: SatinDoll

Sheesh, I worked midnights in a steel mill and paid my own way through college. I even chipped in for groceries for my parents (as I was still living at home rent free).


25 posted on 03/25/2012 6:07:59 PM PDT by PGalt
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To: The Antiyuppie
Effectively, there is no way to discharge student loan debt in Bankruptcy. There is a hardship discharge process by which the U.S. Department of Education can certify that there is no way that a person can pay toward their loan obligations. That process takes at least 3 years, and I have never encountered anyone who has accomplished such a discharge. The bankruptcy courts themselves have ruled that if there is any way for a person to make payments on their student loan obligations, they will not be discharged. I usually tell clients that they'd have to be in an iron lung and have no assets and no prospect of recovery to obtain a hardship discharge. I don't think that is an overstatement.

Section 523 of the U.S. Bankruptcy Code includes, in a listing of types of debts which are an exception to discharge:


(a) A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt—
...
(8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, for—
(A)(i) an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or
(ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or
(B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;



That is not to say that there are not people who are in impossible situations. I know someone with a student loan balance which is just a shade under $250,000. They have 4 university degrees and are in a licensed profession. It will be very difficult for them to pay off the debt, but it is feasible (or at least imaginable).

My unease in seeing the frequency of these news and opinion pieces entitled "Student Loan Debt: America's next disastrous bubble?" or "Holding economic recovery back: student loan debts", is the knowledge that some sort of forgiveness program is probably already drafted ad ready in the Obama Administration. Make the taxpayers in Kansas pay for Junior's degree from Brown or Columbia. It would be so inconvenient for him to have to do so, don't you know?
26 posted on 03/25/2012 6:26:19 PM PDT by Wally_Kalbacken
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To: SatinDoll

I paid my student loan off a couple of years ago. It infuriated me to see people getting Pell Grants and then turning around and buying furniture with it or paying their cars off. One girl in my class lived with her sister for two years and worked for cash so she would qualify for grants.

While I am sure many people don’t have the money to pay on their student loans right now, I wouldn’t doubt that others are purposely not paying and are banking on getting a deal on their loans like the people did who have been behind on house payments. Let’s face it, it is a big enough problem that it has gotten people’s attention and will have to be addressed much like the housing crisis.

It is no secret that many of these punks feel that they shouldn’t have to pay the money back, that their education should be financed by others, and are looking for a deal that will give them the opportunity to walk away scott free or to have the loan considerably reduced.

Exhibit A:

http://www.mndaily.com/2011/09/29/students-push-debt-forgiveness


27 posted on 03/25/2012 7:34:59 PM PDT by Cowgirl of Justice
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To: Freedom4US

I had to call for my payoff as well. It was pretty funny- the guy stuttered when I asked for for the payoff. (I needed to know how much it would be on a specific day as I was paying online through my bank.) I paid the designated amount for the first six months of my loan then never paid less than double. When we got tax money back or any other payments, it was applied as well. And it did feel good to see it go bye-bye. The man on the phone even congratulated me. I don’t think he was getting many calls for payoff amounts at that time. I am sure it is even worse now.

And I carefully chose a major that I was able to use immediately. Not this women’s studies or gay studies bullcrap.


28 posted on 03/25/2012 7:45:06 PM PDT by Cowgirl of Justice
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To: molson209
Obama took over student loads so everyone could have a free college education

No, he took them over so the feds could tell them where they have to work and for how much. Look for the feds to dictate jobs to graduates.

Indentured servitude is back. The govt will become the largest holder of indentured servants in the history world.

29 posted on 03/25/2012 7:48:26 PM PDT by raybbr (People who still support Obama are either a Marxist or a moron.)
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To: Cowgirl of Justice

“I don’t think he was getting many calls for payoff amounts at that time.”

Yeah... must have talked to the same guy! It was kind of awkward, lol.

Read somewhere, the whole raison d’être for disallowing student loans to be discharged in a bankruptcy was because so many were purposefully walking away from their loans. (Doctors and lawyers). So we got that goin’ for us. /sarc


30 posted on 03/25/2012 8:41:37 PM PDT by Freedom4US
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