There are three dirty little secrets buried under the education/student-loan complex's high-gloss sheen:The third point, student loans as welfare, is new to me, but not surprising. Making "student loans" that prop up consumer spending but will never be paid back is just a way to do more stimulus spending without it showing up in the deficit. That debt will be forgiven by taxpayers decades from now, when the miscreants in power today have retired to a private life of luxury.
1. Student loans have little to do with education and everything to do with creating a new profit center for subprime-type lenders guaranteed by the Savior State.
2. A college diploma's value in the real world of getting a job and earning a good salary in a post-financialization economy has been grossly oversold.
3. Many people are taking out student loans just to live; the loans are essentially a form of "State funding" a.k.a. welfare that must be paid back.
And Karl Denninger weighs in on just-released data showing that consumer credit is still collapsing except for student loans. Those poor college kids are being made debt slaves for life in order to keep the bubble going past another election or two.
Those are really good points. I graduated with a lot of debt and can relate to all three. I've never thought about that third point either, but I definitely am guilty of it.
I started a site to help those of us in serious student debt find our way to financial freedom at Student Loan Killer. I appreciate everyone who raises awareness about this issue.
Nice post indeed. Glen Reynold's pointed out the connection between this scam and the OWS protests. The banking cartel is out of control in insidious ways that are still not visible to the general public. Obama has done nothing to reverse the trend, but has abetted it.
With the crazy interest attached to these loans, student loans might be the only thing with a decent return for DC these days.
By they way the government makes the loans now.
#4. It can be used as a convenient class warfare/political issue. Thanks, OWS!
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