Student debt bubble officially pops as 90+ day delinquency rate goes parabolic. Unlike housing, where the lender can at least take back the house and resell it, there is nothing to recover from junior’s $100k degree in Marxist Nonsense. But, don’t worry – student loans are not dischargable in bankruptcy so junior will spend the rest of his life, if need be, paying it back – assuming he ever gets a job. Boom!
{ 25 comments… read them below or add one }
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Like the underwater mortgages, like the debt to China, this will also be solved by a (hopefully) managed inflation. If you have a nest egg or expect to retire soon, this would be a good time to buy real estate.
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Need to know info in this situation. The last point is the most informative at the end of the article.
5 Reasons the Student Loan Crisis is Nothing Like the Mortgage Crisis. Marc Prosser
http://www.forbes.com/sites/marcprosser/2012/08/22/student-loan-crisis/
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Zero Hedge makes the point in a linked article (http://www.zerohedge.com/news/2012-09-28/next-subprime-crisis-here-over-120-billion-federal-student-loans-default) of comparing student loans to subprime mortgage debt which is a fraction of the total mortgage market Prosser talks about. Interestingly enough, according to his graph student loan debt is already as big as credit card or auto loan debt.
That being said, yeah, it probably won’t roll out like the subprime crisis did. For one thing, the securitization and derivatives issues don’t apply to student loans as they did with subprime mortgages. But as Prosser says, these debts can become a drag as students work (or try to, at a time when jobs are already scarce) to pay off these debts instead of buying homes, cars, etc. That could end up being the straw that broke the economy’s back. I would make the following analogy: subprime mortgages were like a nuclear bomb and student loans are more like a dirty bomb.
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Consumer Debt Drops In Third Quarter
By Steve Goldstein
Published November 27, 2012
MarketWatch Pulse
WASHINGTON – Total consumer indebtedness dropped $74 billion to $11.31 trillion in the third quarter, a fall of 0.7%, on a decline in mortgage debt and home equity lines of credit, the New York Fed said Tuesday in its quarterly report. Excluding real estate, household debt rose 2.3% to $2.7 trillion on rises in student loans, auto loans and credit-card balances. New foreclosures are returning to their pre-crisis levels, as about 242,000 consumers had a new foreclosure added to their credit report, the lowest in nearly six years. The percent of student loan balances 90 or more days delinquent stood at 11.0%.
Copyright © 2012 MarketWatch, Inc.
Read more: http://www.foxbusiness.com/markets/2012/11/27/consumer-debt-drops-in-third-quarter/#ixzz2DXHHwHkv
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The fact that consumers are not able to get loans on new homes for the last six years at previous rates are showing false positive in the numbers concerning consumer indebtedness. Economists are spotlighting the failing growth as a positive in lessening debt.
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What the US is experiencing in failing growth countries like China, Russia, and India are making gains. The Corporations are willing to sanction the US while gaining in foreign markets. Until the federal government makes money and business welcome to the US without crippling regulation and taxation at extreme levels student loans will continue to be a problem. The student loan dirty bomb would not exist if the class warfare, eat the rich policies of the current administration did not impede growth.
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From the Forbes article: “….the balance of federal student loans has grown by more than 60 percent in the last five years. While the increase in student loans has helped many people go to college that would not have been able to otherwise, it has also allowed universities to increase tuition fees dramatically. ”
Even the Marxist bastions of academia can’t resist the free market.
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Academia greed?
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If each of these recipients would get 8 or more part-time jobs they could pay off their debt in no time.
http://www.youtube.com/watch?v=Jpu5_3qk4KM
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So, what was your major?
Why can’t you get a job?
Don’t tell us you blew all of mommy and daddy’s money on some stupid liberal arts degree.
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Probably marketing. That’s probably how he got the job as a census taker. I bet they required a minimum of a BA, lol. I once saw an administrative assistant government job that REQUIRED a masters degree – but preferred a PhD. Whomever they hired was probably as educated as a HS graduate from 30 years ago!
Seriously, I take classes and it is absolutely amazing how unintelligent and uneducated some of these grad students are! Many of them can’t even form a proper, coherent sentence. Shouldn’t that be a requirement for even an undergrad student? It’s pretty shameful.
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Many of them can’t even form a proper, coherent sentence. Shouldn’t that be a requirement for even an undergrad student?
I do believe that being unable to even form a proper, coherent sentence IS a requirement for even an undergrad student.
Otherwise they might think for themselves, and we simply CANNOT have that now, can we?
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Creep Crowley’s major was Transgender dwarf studies with a minor in Lark Scooters and Overweight women who drive them.
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Hey John,
Ron Paul is tired of supporting you.
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YOU HAVE TO WRITE IN BOLD *AND* ALL-CAPS, DAMMIT!!!!!!
AND *NO* PUNCTUATION!!!
(EXCEPT FOR MULTIPLE EXCLAMATION POINTS!!!!!!)
AND LOTS OF “……”!!!
AND DON’T FUCKING BOTHER ABOUT PARAGRAPHS …. OR EVEN RUN-ON SENTENCES ….. OR SENTENCE FRAGMENTS …. ITS ALL GOOD!!!!!!!!
AND THE ‘BITCHEZ’!!!! NEVER FUCKING FORGET TO ADD ‘BITCHEZ’!!!!!!
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Looks like all those post graduate barry jobs are not there. Yet the foolish youth follow the pied piper all the way to the end.
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And a good portion of these idiots voted for “Dear leader” because they thought he was going to forgive their loans. Suckers!!!!!!!!
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Trust Obama. He will take care of us.
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You need to put the little /sarc notation in your posts like that so we know you are being sarcastic.
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In Which I Agree With John Quiggin: Markets are prone to crash, sometimes catastrophically
http://www.thedailybeast.com/articles/2012/11/27/in-which-i-agree-with-john-quiggin.html …
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Too many times the federal government creates a crisis only to be the proposed solution to fix the crisis that was its own creation. The American people allow this to continue and in fact reelect those phony leaders to continue cronyism. There are no checks and balances only checks made out for campaign support and checks made to kickbacks.
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Jindal’s education reform offered 5,600 vouchers to impoverished students. 10,300 families applied in first year alone. http://www.nola.com/opinions/index.ssf/2012/11/education_reform_heads_to_the.html …
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Interesting. Just a few days ago I was watching my student loan stuff and i was ecstatic in a couple of more years I am prettymuch done. A lot of the people that take out student loans do not actually need it and use it for crap. It is selfish because that money could ahve been used bys omeone who actually would have used it for educational purposes.
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Student loan program. When no one can afford to go to college, tuition will drop like a rock and profs will actually teach!
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