The number grows to a rate of $90 billion annualized. This can also be considered a stimulus as this $90 billion goes towards faculty salaries, rents, utilities, cleaning companies, accounting firms, In addition, students typically borrow more than their tuition for living expenses such as rent, food, books, supplies, clothes, auto repair (I fixed my brakes with student loan money lol) and even vacations! I know quite a few of my fellow class mates who went on trips with the student loan money they were given. I hope they enjoyed those trips because the party is over for most of them.
Some more facts on the student loan debt timebomb:
Total student loan debt: $864 billion outstanding
Federal backed student loan debt: $665 billion
Private student loan debt: $168 billion
At the current rate total outstanding student loan debt will be $1.76 trillion by 2020. 90b X 10 years = 900 billion. Throw in compounding interest on deferred and loans in default and the number will easily break $2 trillion within the next decade. Im confident that this number will not be reached as the student loan debt binge party will come to an end. If it doesn't then we have bigger problems as we will have a generation of slaves stuck in nondischargeable debt, paying interest on bonds to fund the lives of boomers that horrifically fucked up the nations balance sheet. I've mentioned this before that because the federal government owns the bonds that the proceeds will be distributed based on where the federal expenditures are due. Over $2 trillion of federal expenditures go towards offense (its not defense) spending, social security and medicare.
In the event that the student loan bubble continues and generations X, Y, and Z become debt slaves for life with no true opportunity to prosper, then the US will have a new export: economic refugees as more will be fleeing the country in pursuit of life, liberty and property. I am considering the ex-pat option myself. Today the gas station employee which I have smoked cigarettes with for over a decade told me he is leaving for Indonesia next year for good. Imagine that, Indonesia instead of America. Something unimaginable 10 years ago. He also added that over half of the people that came over since the early 1990's have either returned home or are in the process of leaving. My parents are on there way to moving back to Greece (peaceful west coast part, no riots lol).
Student loan debt growing at a $90 billion dollar annual rate will have terrible implications for the future of the country. If serious and true reform is not undertaken then this will leave a substantial portion of an entire generation indebted, enslaved, depressed and ruined. Either they will flee, pay back their loans with glee, or despair in their hardship and austerity.
http://www.finaid.org/loans/studentloandebtclock.phtml
Subprime JD: A blog dedicated to exposing the law school and higher education scam.
Good post however the best way to avoid such situation can be to opt for student loan consolidation procedure. The solution is however not to control your expenses but to opt for the one that can actually offer you student loan debt relief
ReplyDeleteDon't forget that Obama wants an additional 8 million college grads by 2020. The policy wonks and elected officials keep saying "We need more education for the jobs of the future."
ReplyDeleteSo far as I can see, this nation has a service-based economy - and will have one for the foreseeable future. When I look up local RDA plans - completed and those in development - I can see CLEARLY that MOST of the jobs "created" are low-wage jobs. MOST of the developments are for call centers, fast food vendors, restaurants, hotels, chains, big box retailers, etc. And, of course, the politicians throwa big-ass press conference and pat themselves on the back for bringing more jobs to their city or state.
http://chronicle.com/blogs/innovations/why-did-17-million-students-go-to-college/27634
According to Richard Vedder – relying on info from the Bureau of Labor Statistics:
“Some 17 million Americans with college degrees are doing jobs that the BLS says requires less than the skills associated with a bachelor’s degree.”
Student loans are at the HEART of the scam. By eviscerating the Bankruptcy Code to prevent these bullshit loans from being discharged, the rotten fucking politicians have created a virtual debtors' prison for law grads and others. The only way out is to DESTROY the student loan system by any means necessary.
ReplyDeleteI'm not a financial person at all.
ReplyDeleteBut given the large default history involved in student loan lending, how does student lending benefit the student, or the Country at all? (We all know how a few individuals and entitys do profit from the scheme. Behind every great fortune there is a great crime.
But still, why do the banks still keep lending money?
Someone told me today that all of the Stimulus money (including Student Loan funds) has been borrowed from China. And that if China grows tired of America's inability to pay the money back, they could stop lending money.
If that happens--and that day may never come--
God Forbid.
An overnight 1929 style panic would erupt all over the US.
People like Glenn Beck are even advising to start stockpiling food for that day.
Sleep well all of you magnificant bastards.
After read blog topic's related post now I feel my research is almost completed. happy to see that.Thanks to share this brilliant matter.
ReplyDeleteAccounting Thesis
In an era of technical development, we all have high ambitions. The attraction of modern amenities and the higher cost of education are forcing students to opt for loans. Students are digging more to get burdened with student debt in the long run. Students under debt are often advised to go for free counseling with consolidation experts.
ReplyDeleteThese experts can teach them how to retain their credit worthiness and how to remove the burden of student debt (Student Debt - Rising demand for Student Loan).
Thanks, great blog
ReplyDelete