Exposing the Student Loan Racket (Infographic)
Student loan debt, now at $830 billion, has surpassed credit card debt—a statement unheard of 20 years ago. Student loans, unlike any other form of debt, CANNOT be forgiven via bankruptcy—these loans MUST be repaid. Is this the next bubble to burst?
DISCLAIMER: THE VIEWS EXPRESSED IN THIS INFOGRAPHIC AND THE USER GENERATED COMMENTS BELOW DO NOT REFLECT THE VIEWS OF HEALTHCAREADMINISTRATION.COM
I graduated from college with $26,000 in debt in 2005 with a major in business administration. Straight out of college, I got an analyst job at a mortgage lender in Orange County. Everything was great for a couple years, I paid down my loans to $18,000, but then the financial crisis came. I lost my job, I’ve long since been a 99er. I’m out of unemployment aid, I can’t find a job in this crappy economy. I’ve sold my car, living with my parents again. Even if I do get a job
So you want me to pay your loan!
No, I want the government to forgive my loan. Obama gave Wallstreet $800 billion in bailouts. Student loans are approximately $830 billion outstanding. Why is Obama so ready to give Wall Street a bailout but not give the voters any relief?? If he wants to be re-elected in 2012, he had better do something for the Citizens of America, rather than the Corporations.
No, I want the government to forgive my loan. Obama gave Wallstreet $800 billion in bailouts. Student loans are approximately $830 billion outstanding. Why is Obama so ready to give Wall Street a bailout but not give the voters any relief?? If he wants to be re-elected in 2012, he had better do something for the Citizens of America, rather than the Corporations.
I don’t think you understand what the “Bailout” was… it was a loan. The govt. gave $400 billion for the TARP program (bailout) in 2008, currently $360 billion has been paid back, leaving only $42 billion outstanding. If you do not have any options, join the military. The Govt. accepts sweat equity instead of cash for repayment.
No, the “bailout” included direct and indirect subsidies, loans and outright transfers from the taxpayer and Federal Reserve that total over 3 trillion dollars. TARP was just the direct Treasury loans of 669 billion. Then there were the capital infusions (AIG) of about 160 billion. Then there was the 1.2 trillion of secret Fed loans (at below market rates) that we only discovered after Bloomberg won its Freedom of Information Act suit (see: http://www.bloomberg.com/news/2011-08-21/wa
I don’t think you understand bailout. You let me know when the $1.2Trillion in garbage MBS the taxpayers absorbed is unloaded from the Fed’s balance sheet. I have no desire to cover students loans, but please keep from spreading the lies that the socialization of Wall Streets risks is now paid off.
Ya, right. Join the fucking military, which is an option for every unemployed. That way the lower classes can always go fight the wars for the rich — or to protect their assets in foreign lands, so that they can rape and pillage and become richer.
The gov. could at least give him a 1-2% loan like they did the banks…. but instead he gets the 9% plus collection fees on top of that.
Yes, but Wall Street (or rather, some favored Wall Street firms) matters to Obama and the Democrats. (Who do you think funded Obama’s 2008 campaign? Go to opensecrets.org, and you will discover that you and the rest of the kids who voted for Obama were actually backing the guy with more millionaire support.)
Who cares?! What are you trying to say anyways, retard?!
moses folliville was just giving his opinion and replying to a comment that was made by cwest020 if you scroll up a little bit. calm down with the remarks you dont have to be rude just becuase you dont understand or agree with the comment
WOW! That graphic was very well laid-out and not confusing at all! Thanks, Obama!
how the F do you default on students loans in utah? there is only one private school in the state, and rent is like $400 / month.
The reason that education is so expensive is because of government subsidies in the form of student loans. There is no incentive for colleges to decrease costs because they can always rely on the customers (I mean students and parents) to get no-qualifying student loans for whatever amount is needed. If the free market (no government loans) were allowed to operate, you’d see a lot of these college institutions slash costs, merge, or go out of business.
The logic follows that the costs would go down because the govt isn’t taking away the risk on the loans for the private companies. Private companies are already fronting the money in loans, but they have no risk because the government pays the loan off with interest if the student defaults. If the private banks assumed risk they wouldn’t give out as many loans (less money to colleges) so colleges would cut costs because they would need to keep enrollments up to be able to justify the
America is crying for smart people not schooled idiots, we have too many of those. Education NOT EQUAL TO Intelligence. Even retards like you are capable of getting a university degree, thus you are a great example that proves my case. People like you exist to serve in Afghanistan and Iraq.
Oh, so now your knocking our troops…!! I dare to say they have a little more common sense than you cause common sense isn’t something you learn in school and common sense is all you need to start and run your own business(s)… I’m living proof my friend… School after high school only does one thing for most grads… It says you know how to learn… I on the other hand use my experiance to show not only that I know how to learn but that I know how to do the jo
I believe Russ_murray’s logic is as follows: If the government stopped guaranteeing student loans, banks would apply more stringent lending requirements because they now bear the full risk of non-payment. Basically, students will have to prove to banks that they are good candidates to repay loans, or they will not get the money. More stringent lending requirements leads to fewer loans, or at least loans in smaller amounts, and fewer/smaller loans leads to fewer students attending college a
The main reason for using the presence of a college degree in the hiring process is that current law basically doesn’t let businesses use IQ tests or other general ability tests to ‘sort’ their applicants [well, unless you don’t care about losing lawsuits]. Otherwise it wouldn’t matter in a great many jobs if you had a degree or not.
+1 for “Otherwise it wouldn’t matter in a great many jobs if you had a degree or not.”. But Moses is incapable of understanding this fact. He’s too retarded to realize there is too much bullsh|t going on in the university business.
I graduated with an engineering degree. And most of my time in university 90% was wasted on bullsh|t. You are too retarded to realize that universities are businesses, they have no incentive to make the system more efficient so long as the gov is funding their business.
“If an employer is interviewing 50 people for one job whats the easiest way to rule out people? Thats what college does. It says you’ve committed 4 years of your life to one subject.” And government has to fund this because??? You are too stupid for this discussion, go troll somewhere else.
“Just asking” – Very concise and (In my opinion) accurate summary. I think many people would be surprised at how quickly tuition would drop if the fed either stopped guaranteeing student loans or else significantly tightened the requirements for obtaining them. Colleges would need to drop prices or face a major hit in both the quality and diversity of incoming classes. In an effort to stay competitiveness with peer institutions in these categories, schools would drop tuition or
@Moses LOL. Universities could be made more efficient, because 90% of a customer’s (aka student’s) time in universities is wasted on crap. Those 4 years could easily be reduced to 1 without losing any quality.
I don’t think someone is “retarded” because they have an opinion. I do think it is retarded to call someone a retard and a troll just because their opinion happens to differ from yours. I went to a liberal arts college and I will admit at the time I considered many of my non-major courses unnecessary. However looking back I am glad that I received a well rounded education. Different colleges have different requirements when it comes to your program. It is your job to pick the c
Does the nation really need a small college like St Copious of the Plains in Fairfield Nebraska with its $60,000 tuition and new weighroom and NCAA Division 3 Basketball program that draws maybe 50 fans a game? Gold plated dormitories and 15 story Dudley Administration Building? Great value if you have the cash but isn’t the state college down the road more affordable?
Thanks for the great work. I left a link at http://www.edububble.com
Cwest–First of all, the rhetoric that the government got “paid back” the TARP money is a slight of hand. A lot of what they are saying they got paid back with were the “toxic assets” notes that have no real value…hence the Troubled Assets Relief Program’s name. You really believe the government is telling you the truth about getting paid back. Don’t be naive…do some research for yourself. Also, TARP was small potatoes compared the to open win
All it takes is a 30 second look at the CBO tranche reports and you’ll see that for the most part, you are incorrect.
enlighten me then…are you meaning the Congressional Budget Office’s reports on CDOs? How does this prove anything wrong?
And incorrect about what? You claim you can prove my entire post incorrect from a 30 second glimpse at one report. Ever heard of a fallacious argument?
First of all, it’s sleight of hand. Secondly, “tens of trillions of taxpayor dollars (made out of thin air)” is a contradiction. It’s either tax revenue or fiat money, not both. You pretty much lost me after that.
Ideas not Beliefs: Please re-read my comment, and then re-read your reply… The tangent you took makes zero sense. Where can you buy federal reserve shares? If you could buy shares of an organization that has the ability to print money (literally), the returns on that stock would be amazing, let me know how to get some! My belief was that Broke99er should have to pay back any contractual obligations he signed, and if he cant find a job, the military is hiring. I agree and know that the syst
I’m caught in this crucible and the weight of the my student loans are my biggest financial obstacle. I’ve basically been given a choice between paying rent and feeding my family or paying my loans. Even is I paid the amount my loan holder is asking, I’d never reduce my principle. This is a great illustration of the scam. Thanks for the work that went into it.
You’re right Russ. Higher Ed is using the Enron financing model (they stole from Hollywood:-) where you take income as profit for the year and put the debt on long term loans. It looks like you are doing good for a while but the scheme implodes eventually. What might make higher ed more unethical even is that those loans are tied to the backs of the young people trusting advise of so called experts who push the ponzi through faculty, administrators, and the general elder public at large. C
Resources for victims at http://www.studentloanjustice.org
And what if these over-debted kids grow up to buy annuities?
Government backed student loans ought to go to people only after they have completed two years of college. Default rates would plummet, and it would provide a bit of a brake against tuition inflation. Then I’d cap annual loans to 5K/year for undergrad and 10K/year for post graduate students. Another factor driving tuition up is foreign students with the means to pay full fare. It is market economics at work, but comes at a cost to low and middle income american students.
In a generation, university education have become unreachable without going into dept. In another generation, university education will be unreachable, period.
High educational costs at 4-year Universities are caused by 1 thing, and 1 thing only: Administrative Bloat. If my University fired all the new VP’s hired since 1999, the faculty (those who produce our product) could get a deserved raise and the students could pay less. Everybody wins except those with the power. FWIW, our faculty have LOST spending power every year of my career despite nominal (generous in the Board’s view) raises. Faculty do it for love, not money.
The math in this infographic does not add up. First, federal unsubsidized Stafford loans are at 6.8% interest, not 8.8%, with a standard repayment term of 10 years. But let’s assume $20,000 in debt at 8.8% interest with a 12 year term. The monthly payments would then be $225, not $293, and the total interest paid over the life of the loan is $12,452, not $23,376. Also, collection charges on federal loans are deducted from each payment, not added to the loan balance, with no separate commission t
This is Great. One graphic that spells it all out. But they forgot one thing. After you default, the predatory parasites come after you like a pack of hungry mosquitoes. And they never stop. The only way to get away from them is to live off the grid or underground so to say. In other words as a 3rd class citizen in your own country. Shame on America for allowing this to happen.
I do not have a degree and have an engineering job. I did several night courses while employed and paid them off myself, or the employer helped pay for some of them and hence never had a college loan. I get paid an above average pay in my field of engineering. College degrees are not always needed to get ahead.
Fundamentally the issue is that we don’t have any industrial jobs in this country because of globalization, and so the demand for higher education goes way up because students believe that the only decent job they are going to get is with a degree. Getting the government out of education isn’t going to be the final step in all of this. We have to encourage businesses to invest in manufacturing and industrial jobs here in the U.S. again so that no one feels forced to go to college at
Anyone sensible can follow a few guidelines. Don’t go to for profit colleges. Go to a state school. Get your associates from a JC. Finish your degree at a 4 year. Tuition at JC = MAYBE $1500 / yr Tuition at PUBLIC 4 year = 13k / yr 2(JC) + 2(4yr) = 3000 + 26k = 29k I’m a second year at a University of California campus. I believe California has some of the highest tuitions. But even 29k is manageable. I work around 15 hours a week and take home over $800 before taxes a month. In one
When you have the federal reserve imposing interest rates so to enact inflationary policies, there will be distortions in the market in the form of misallocated resources, malinvestments and pseudo consumer demand for products and services which would not have otherwise been there if these policies were not started. Free market capitalism has RISK embedded in it to keep investors and entrepreneurs always on the lookout for anything that might happen in the future. When you inflate a currency, th
Ron Paul!
Could some kind soul repost the graphic or provide a link?
When are you going to correct the technical problem with this infographic? It’s inaccesible now
wasn’t obama supposed to forgive my student debt?
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