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The NEXT BUBBLE JUST BURST: Over $120 Billion In Federal Student Loans In Default

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posted on Sep, 30 2012 @ 09:40 AM
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Debt, n. An ingenious substitute for the chain and whip of the slavedriver. ~Ambrose Bierce, The Devil's Dictionary, 1911


They KNOW what they DO!



posted on Sep, 30 2012 @ 09:48 AM
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Originally posted by watchitburn


Here is another very good one. It's about an hour long, but it breaks down the whole scam of trying to get a college education these day. How the Govt. has gotten involved and to what extent. Everything from textbooks to college sports.




edit on 30-9-2012 by watchitburn because: Added stuff.

edit on 30-9-2012 by watchitburn because: I'm stupid.


I agree..Good flick. Gerald Celente is always one of my favorites due to the way he brings the discussion into the reality that most tend to overlook whether through deniability or just plain ignorance...



posted on Sep, 30 2012 @ 09:54 AM
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Originally posted by generik
it's rather hard to pay a student loan when one graduates to work at McDonalds or other low pay job. i know a few friends who have been crippled by their student debt, yet can't find work in their field that would give them enough cash, to both pay back the loan as well as live on. higher education is almost a scam these days since you build up massive debt yet are lucky to find any job.

the sad part is students are constantly told that if they want a chance in life they have to have an education. in fact the people who are best off are people in prison who have education GIVEN to them. almost makes me want to run out and commit a crime so i can get an education, yet not be trapped by debt.


Yes if students want a chance in life having a higher education degree can help but you just can't take crap courses and expect a good job when you get out. Look at how many go to college and study individual arts, psychology and not take courses that are science based. A person can't get a good paying job if they aren't prepared for it.



posted on Sep, 30 2012 @ 10:04 AM
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People want to blame the government for this bubble but that is wrong. The blame should go to the banks and colleges because they are the ones that are scamming the government. Since 1980 tuition has gone up over 800% just what more at these schools is going on that costs so much? Maybe the cost would go down some if some of these coaches weren't paid so much Some coaches make between 500K to 1.5 million a year and a few of them make between 2 to 4 million a year.



posted on Sep, 30 2012 @ 10:12 AM
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I thought we retired the word billion back in 2007?

Not sure billions can cause too much damage in 2012.

It's all about the trillions now.

High inflation, you have arrived!



posted on Sep, 30 2012 @ 10:13 AM
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I wonder how many hours of money printing is $120 billion for the Federal Reserve?



posted on Sep, 30 2012 @ 10:14 AM
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reply to post by loam
 


Well they attach people's pay after default. They might be collecting more that way then if they wernt in default. I believe most courts grant payment amount adjustments but I doubt that's the majority.
I've even seen Sally Mae attach people's disability payments at about 14%.



posted on Sep, 30 2012 @ 10:21 AM
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reply to post by loam
 


Sometimes I wish I wasn't so responsible. If only I could be like so many others I would have defaulted on my student loan and wouldn't have wasted so much of my own money "doing the right thing".



posted on Sep, 30 2012 @ 10:29 AM
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Originally posted by St Udio
there can NOT be a default on Student Loans... as those Loans are not available to be set aside...
a student loan was specially marked by Laws that make recapture certain...at some time...

a student loan balance has priority over any tax refund that person might be eligible to receive,
i expect an outstanding loan balance will soon be reason enough to issue a warrent on the debtor,

if ever you are brought to court, the payback of the student loan could be part of the legal action... then theres' the present reality where Social Security payment are reduced until the full Loan is repaid

the death tax is the final venue where student loan balances might be extracted.

so, the present 1 Trillion in Student Loans outstanding will not be listed as 'in default'
but listed as being in Arrears, late but eventually recoverable because of the unique treatment the Big Banks had Congress pass Laws about just for their protection



Private Student Loan Bankruptcy Rule Traps Graduates With Debt ...

Aug 15, 2012 ... Congress Created A 'Special Circle Of Bankruptcy Hell' ... "There's no reason why
private student loans should be treated differently than ...
www.huffingtonpost.com/2012/08/14/private-student-loans-bankruptcy-law_n_1753462.html


edit on 30-9-2012 by St Udio because: (no reason given)


LOL you are assuming these students who CANNOT pay off their loans have jobs to pay their loan off or even pay into social sec. I predict most americans will go under the table as many have already this combined with inflation and devaluation of the dollar...

I see change being handed out in Brass & lead in the near future... who was it that just stockpiled the most ammunition ever seen by a non military group?
edit on 9/30/2012 by -W1LL because: (no reason given)



posted on Sep, 30 2012 @ 10:31 AM
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Originally posted by DistortedReality
reply to post by loam
 


Sometimes I wish I wasn't so responsible. If only I could be like so many others I would have defaulted on my student loan and wouldn't have wasted so much of my own money "doing the right thing".



with all respect and no bashing intended you are just a pawn falling into play. you are NOT doing the RIGHT thing.



posted on Sep, 30 2012 @ 10:32 AM
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120 billion?

Pocket change these days when you are looking at bailing out the too big to fails....Ben, put some nitro in those printers.....got another bailout coming.



posted on Sep, 30 2012 @ 10:38 AM
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reply to post by Hefficide
 


It's the same thing with home foreclosures. The banks already get the house and on top of that all the money the owner paid them for all those years. Chances are the banks are making double the amount of cash on the deal. They get to re-sale the house and continue making interest profits on the next buyer. It's really a scam.

The poor owner who lost their job because of no fault of their own, has a family who is now homeless, while the bankers laugh at the next sucker that comes along.
edit on 30-9-2012 by WeRpeons because: (no reason given)



posted on Sep, 30 2012 @ 10:43 AM
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Originally posted by pajoly
The great irony is that it would cost far less to have free college education and trade schools for those whose grades earn them access, just like much of Europe. Once again, just like denying universal healthcare, Americans shoot themselves in the foot.

Stupid electorate. Not only is free education and free healthcare moral and ethical, it also makes much more economic sense. It's just that dumb Right wing know nothings can't understand that they already pay for people's healthcare today via high insurance costs and they already pay for lack of eduction through crime rates, prison costs, welfare costs, etc.

Funny mostof us "stupid" (skilled) right wingers with the electromechanical associates; machinist and welders certificates are still doing pretty fine without the self-imposed $60k debt for a liberal arts dgree in french history...
My welder buddy can barely get enough sleep his one man shop is so busy.

We are all responsible for our choices.
edit on 30-9-2012 by 46ACE because: (no reason given)



posted on Sep, 30 2012 @ 10:48 AM
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What's even scarier is that this paltry amount is only 2 months worth of military spend. Now THAT'S scary.



posted on Sep, 30 2012 @ 10:51 AM
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Obama to the rescue to scavenge their votes. All student loans forgiven!



posted on Sep, 30 2012 @ 10:59 AM
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Ironically in that same earlier post we showed a chart of default rates for federal loan borrowers that while rising was still not too troubling: as it turns out the reason why its was low is it was made using fudged data that drastically misrepresented the seriousness of the situation, dramatically undercutting the amount of bad debt in the system.



I've been watching the news lately, along w/ alternative news and even the people I trusted I knew some were lying to me. The ecomny's getting better!!! Just look at those numbers going up!! Ha! I about spit out my oatmeal when I was reading pasthuman and my man actually said that real estate was going up...people were buying again...just look at all the. New jobs....

I was flabbergasted that anyone would be fooled into thinking any numbers coming out, spending, Un- enjoyment, real estate, jobs would be accurate! We're in trouble and as many have said...printing more dollars ain't gonna fix it. This election ain't gonna fix it....there's only one way to fix this...get rid of the corruption in the white house and in your own house...



posted on Sep, 30 2012 @ 11:10 AM
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Originally posted by buster2010
People want to blame the government for this bubble but that is wrong. The blame should go to the banks and colleges because they are the ones that are scamming the government. Since 1980 tuition has gone up over 800% just what more at these schools is going on that costs so much? Maybe the cost would go down some if some of these coaches weren't paid so much Some coaches make between 500K to 1.5 million a year and a few of them make between 2 to 4 million a year.



how dare anyone call education a BUBBLE !!! 800% increase



posted on Sep, 30 2012 @ 11:15 AM
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I think some of you have missed a major point in the article.

The $120 Billion in defaulted loans results in a revision no where close to previous reporting:



The revisions to the data are fairly substantial: as of our August report, 2011Q2 student loan balances were reported at $550 billion. We now estimate that student loans outstanding in that quarter (2011Q2) amounted to $845 billion, $290 billion or 53.7% higher than we reported earlier. These previously excluded loans were also missing from the total debt outstanding; as a result, our estimate of total debt outstanding in 2011Q2 is also revised upward by $290 billion (2.5%).


The reason this jump is so significant, and why the $1.3 Trillion dollar market size estimate is equally important, is it matches what happened in 2008 with the Housing Bubble.






As can be seen on the table above, 20% of all subprime mortgages was then expected to default (the ultimate number ended up being far higher). Note that as mentioned above, already over 22% of for-profit student loans are in default.





Not good.

Also, as some of you have commented upon, unlike mortgage debt, these student loan obligations (because of federal legislation passed in recent years) STAYS FOREVER as an obligation of the borrower.

If you are someone who has the misfortune to blow up under one of these loans now, you are likely done financially for THE REST OF MOST OF YOUR LIFE.

Think about that.


edit on 30-9-2012 by loam because: (no reason given)



posted on Sep, 30 2012 @ 11:31 AM
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Originally posted by buster2010
People want to blame the government for this bubble but that is wrong. The blame should go to the banks and colleges because they are the ones that are scamming the government. Since 1980 tuition has gone up over 800% just what more at these schools is going on that costs so much? Maybe the cost would go down some if some of these coaches weren't paid so much Some coaches make between 500K to 1.5 million a year and a few of them make between 2 to 4 million a year.


Why does blame the banker get thrown under the bus, but never the government?

Yes, the banks and universities are taking advantage of these government backed loans....just get rid of the government involvement. Without that backing these banks won't be so fast to approve these outrageous loans....and unless these universities want to see a drastic reduction in enrollment, they are going to have to reduce tuition.



posted on Sep, 30 2012 @ 11:43 AM
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reply to post by MidnightTide
 


You also have the blame the students.......going to a private college instead of a state funded one....going to school for degrees that you can't get a job with. Students need to be realistic about what they can and cannot do. I've seen tons of students who get a BA in humanities? For what....what job could you possibly get that you can't get without going to college....Tons and Tons of English majors...tons and tons of business majors. These students need to think seriously about which college to go to, what they really want to do, and what they can afford.

Someone needs to really crush their idealistic dreams, its good to dream, but don't lie to yourself if you don't have the talent. I've seen some of the worst writers getting a degree in English. The only people i've seen with humanities majors are really really dumb, or people who pretty much go to school for a athletics scholarship. Business majors are the worst, they all think they'll become millionaires. Music Majors.......chances of successs are so little....does every single one have the talent?

There is now a trend for people to become teachers, stability and now the high amount of money. My school district pays all teachers 6 figures. Problem is they see the money, but they don't see the work. My school district hires only people with phd's and once in a while, a master's.

I went to school for biology, can i get a job with it? Hell yeah... its so damn easy to get a job, not a high paying one but it was a job. My yearly colleges fees were only 12K a year after doing those free scholarship essays and grants and what not. School also did it by semester fees, meaning you dont pay per credit, so you could take more classses for the same ammount. So save more money, graduate in 2.5 years instead of 4.

A lot of these kids go to college just to party, to have the time of their lives. To do what they think everyone else does. It's total bs and someone should really teach these people what to do.




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