Student Loans are the new HELOC's except you don't even have to "own" a house to get one. Not a Doubt.

Student loan debt WILL be dischargeable in bankruptcy or just outright forgiven in the future. Things change. Remember in 2005 it was unfathomable that the government would bail out banks, housing debtors, etc. The thought of people living in a McMansion mortgage and tax free for 3 years or more was impossible. It was said people would NEVER be allowed to take a short sale and not be 1099'd for the difference. It was said there would NEVER be principle reductions. Yet all these things have come to pass.

The deflationists argue there can't be inflation or hyperinflation unless you raise wages to get the money directly into the hands of the middle and working classes. They are just doing it in a more clever way. Free mortgages/refis that never need to be paid back, no property tax, student loans given to anyone who can fog a mirror, 99 weeks unemployment, an explosion in new people receiving food stamps/free school lunch/section 8/SSDI, etc. The money is being dropped from B-52s instead of helicopters with the intent of propping up housing and the DOW.

If you come out of highschool in today's job market and you plan on a fruitful career without a degree the odds are stacked even more against you than if you have a degree and $60k in debt.

Get an apprenticeship. Get paid to learn for four years, versus paying. If you are really college material, you will move as far and as fast with a journeyman's card as you would with a degree, and make more money along the way. I'm seeing that in action right now.

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Nope, no bubble there. Not a chance. No sir.

(removes Fed-colored glasses)

HOLY CRAP!! (faints)

Haha yep. I hope everyone doesn't take off the glasses at once.

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Get an apprenticeship.

Yep, why go to College when you are going to return home with a useless degree? If you start working you are local and know the job is there. Local small businesses don't look for masters in business, they look for some kid showing up and willing to do the **** work to prove his worth. You can't build a relationship with the company that hires you because of a degree like you can with the guy that appreciates your attitude.

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The money is being dropped from B-52s instead of helicopters with the intent of propping up housing and the DOW.

Frag that is the best post I've read in a long time.

I'd say it's more like "Smart Bomb" technology, the inflation money is being inserted into specific places and not being dropped on the masses.

For example, if you are middle class and paying your bills, you ain't getting no free money.

"This only works for one semester though, right? If they give you a certain amount, you still have to pay for tuition, etc. If you drop out, the loan is done and due, so what, they get one semester (ok $20K+), but they don't get 2nd semester money. How does this help them sustain a lifestyle? Maybe I am confused as to how the loans work (I only borrowed for one quarter of my entire education)."

Students can take out loans for more than just tuition and books. They also can take out loans for room and board. A student going to grad school because they couldn't find a job after graduation or a 30-something going back to school after their unemployment runs out can take out loans in excess of tuition to help cover the cost of their upside down mortgage, their luxury car, their family vacation, their iphone and their $4 lattes.

A lot of the rising cost of education is the cost of living on/near campus. Go to a college town and look where these kids are living. We're talking a lot closer to Ritz and Club Med with expensive food options than 30 year old dorm rooms and cafeteria food. Why would you ever leave? The loans aren't due until after you are out of school.

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The deflationists argue there can't be inflation or hyperinflation unless you raise wages to get the money directly into the hands of the middle and working classes. They are just doing it in a more clever way. Free mortgages/refis that never need to be paid back, no property tax, student loans given to anyone who can fog a mirror, 99 weeks unemployment, an explosion in new people receiving food stamps/free school lunch/section 8/SSDI, etc.

Most of that money is going to certain demographics. It's non-minorities who are taking out the student loans. The FSA is getting free ****, including student 'aid'. The kids taking out the loans are paying for their own education and 2 or 3 FSAer's educations.

If you're a communist, this is the perfect design.

Full speed ahead...

In the end that spread, plus the spread between education costs and the overall cost of living, is going to spell the end of higher education as we know it. Universities, by cashing in on the myth that their degrees are an automatic ticket to prosperity, but at the cost of impoverishing their graduates; in the long run they are slitting their own throats.

Jstanley -

But in the short to medium term they make out like bandits.

Given the way the system works in gov't, finance, and many other areas, why would you expect those who run Universities to not hop aboard the "I don't care if it blows up after I've retired with all my loot" bandwagon?

Students must be credit-worthy to borrow the "expenses" portion beyond tuition and books at any decent school. Taking on loans does not indicate someone is a "bandit" to me... if they have good credit and income why would they sacrifice that for a measely extra 30% max in living expenses? I'm sure some idiots do, but its non-dischargeable so even the few that are ignorant of that fact will not profit.

Also - and especially since - they're working on doubling student loan interest rates... I think you can feel pretty comfortable in the belief that there will be no student loan forgiveness.

Tj98, reading comprehension. the universities are making out like bandits, not the students. the students are screwing themselves over by taking on debt like a homebuilder going out of business.

Peterm99 wrote..

Given the way the system works in gov't, finance, and many other areas, why would you expect those who run Universities to not hop aboard the "I don't care if it blows up after I've retired with all my loot" bandwagon?

I don't. Blowing it up will be good for actual education. On the other hand, not so good for the indoctrination which makes up so much of what goes on whilst sailing under a false flag.

True Djloche - I'm multi-tasking here and appreciate your observation that I misunderstood the post previous to mine. That being said - my personal opinion is that the young students will be lucky to not experience doubling of their interest rates. I see zero chance .gov is going to start forgiving student loans. Seems more like an emotional topic that will simply distract those worried about the overall system.

Peter,

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But in the short to medium term they make out like bandits.

I believe Bill Black would call that control fraud. They are no different than the banksters.

Tj98 wrote..

I see zero chance .gov is going to start forgiving student loans.

Completely disagree with this. I believe it is almost inevitable that they will.

We already have gov't forgiving student loans for various types and terms of employment, specifically in "favored" fields involving gov't related employment. There is currently talk (both in the Administration and by many of both parties in the Congress) of forgiving all student loans provided that payments have been made for a minimum number of years for a minimum fraction of one's income, no matter how much remains unpaid.(***)

The cacophony of the entitled complaining about "Oh, it's sooo hard to pay these onerous debts off!" will reach crescendo levels in the not-too-distant future, and, IMO, politicians, as is their wont, will find that currying the favor of such a large voting bloc by forgiving their student loan debts will become irresistible. IMO, this will happen either through outright forgiveness along the lines of *** above but with shorter and shorter periods being required, and/or through changing the laws to make student loan debts dischargeable in bankruptcy.

TJ98, they can raise the student loan rate to 100% if they want. It won't matter, they still won't get paid. Debt that cannot be repaid will not be repaid.