"Let me say just one thing.
Student loans are a liability to the borrowing student but an asset to those who hold the loan, the lender.
Many of these loans have been syndicated into Sally Mae bonds and sold to investors.
By Obama changing the terms of the loan, the loan holders/bond holders have been screwed.
This a default and the value of those loans/bonds will plummet. Just like when people started defaulting on sub-prime loans. The world markets tanked as investors stopped buying mortgage backed loans.
This will happen to student backed loans and liquidity will dry up. Fewer student loans, now that the POTUS can unilaterally change the terms post-issue.
Obama will destroy student lending. Dumb-*ss or evil-*ss? We report. You decide."
7 posted on Wednesday, October 26, 2011 6:24:28 PM by April Lexington
Oh I see, We the Taxpayers get to pay for someone else’s Lazy Loafers to get their college degrees and get reprogrammed into Commies.
How about the universities just remembering that they are a business and if they were competitive, people would come. So we really are subsidizing the universities, which also have NO CLUE about capitalism or money.
So disgusting.
The dirty little secret is that most “financial aid” comes from overcharging non-minorities and using the excess to fund “financial aid” to Eric Holder’s people.
An intended consequence of this is that non-Eric Holder’s people bury themselves in student loans that are now owned by the federal government.
Get this: student loans are the ONLY debt you cannot escape through personal bankruptcy.
This means that the vast majority of non-Eric Holder kids graduating from college these days are indentured slaves to the federal government.
If you don’t think Washington has plans to exploit this situation, you must be from some other planet.
Student loans. The next bailout. The next CRASH.
Was only a matter of time. In addition to the federal govt, part of the problem is colleges themselves, charging 100k for a damn English degree (among other cheap majors). They will regret the day they decided to foist their greed onto the taxpayers. There is no reason for them to have multi-million dollar gyms and sports arenas, nor 1 mill+ bio research facilities on small campuses.
Aside from the bath taxpayers will be taking on this, the average benefit to the paying back his/her loan will be a payment reduction of $4 to $8 dollars per month.
Aside from the bath taxpayers will be taking on this, the average benefit to the person paying back his/her loan will be a payment reduction of $4 to $8 dollars per month.
Limit loans to four years. The normal college program (when standards were higher by the way) was a four year path to a BA.
However, the educational establishment actively promotes the 5 and even 6 year programs to students to ease their path—and thus extend the tuition because the students have to pay a minimum to be a full time student, regardless of the hours.
The student loan program that King Obama announced this week is typical vote-buying welfare that invites abuse and fraud.
True story. I struck up a conversation with a woman in an airport while waiting for a flight. The economy and the plight of recent college graduates came up. She openly (without a hint of shame) told to me how her daughter plans to take advantage of Sugar-Daddy Obama’s generosity.
Her daughter is majoring in a graphic design program at an expensive CA university and already has $56,000 in student loans.
Realizing that the labor market is depressed, instead of graduating, she is staying in school and living off student loans as long as she can. Which is what millions of others will do too.
She has no incentive whatsoever to limit how much debt she racks-up. She knows that she will not be held accountable to pay it back. Why stop at $56,000? $100,000! $150,000! $200,000! Sky’s the limit when you are spending free money!
After 20 years of repaying not much if any of her student loans, her debt will be forgiven.
How neat! Like free money or something!!
She added insult to injury by telling me that in her daughter’s line of work, many times she will be paid cash or on a 1099/self-employed basis.
So, since her daughter doesn’t plan to show much income on her tax returns anyway, the 10% of discretionary income will be practically 0. She plans to pay back almost ZERO!!
I shudder to think that we already have $1 trillion in student loan debt. With a government give-away like this one, we could easily double that to $2 trillion. What happens when the gov’t has to start forgiving 100s of billions in dollars in student loan debt?
Who pays for it? The money was spent. Somebody expected to get paid back. Who loses and/or who pays it if not the student?
That is exactly how the system will be gamed.
Those brainwashed kids standing behind Obama and cheering in front of him have idea how quickly he is destroying their country. So sad.
Easy, cheap, government-guaranteed money caused the housing bubble. Now it has caused a higher education bubble.
This is the vote-buying politicians’ way to keep the bubble inflated and keep the money flowing to one of their best mouth-pieces... liberal professors.
And the politicians won’t stop bribing the people with their own money until we are Greece on steroids.
I am profoundly sad to say that this woman was NOT an Obama-supporting liberal.
That is what happens when a country goes Socialist.
EVERYONE takes as much as they can, until there is nothing left to take.
As Prof. Alexander Frazer Tytler supposedely said back in the 1800’s (paraphrasing): A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largesse out of the public treasury. From that moment on the majority always vote for the candidate promising the most benefits from the treasury with the result that democracy always collpases over a loose fiscal policy, always to be followed by a dictatorship.
That describes Greece today. It could very well be America soon.