Financial collapse and student loan debt burdens. How will they pay the loans back?

[GRG55]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

the facts in this case were really ugly

http://www.usatoday.com/news/washing...nt-loans_x.htm

Let's see...no escape from bad debts...

...food prices, including Spam, still going up...

CHICAGO, Nov 25 (Reuters) - Hormel Foods Corp...Spam and other canned foods...sold well during the quarter as consumers chose to eat less-expensive meals at home rather than dine out in a slowing U.S. economy...

For fiscal 2009, the company faces...higher commodity costs at Jennie-O, as well as the prospect of rising hog prices as supply gradually declines...

...wage cuts and layoffs for UAW, state employees, airlines, FedEx and most everyone else...

Dec 19, 2008 -- Package delivery major FedEx has announced that it is slashing wages for all salaried employees by 5% and is suspending retirement plan contributions for at least one year in a cost-cutting move aimed at dealing with the downturn in the US economy...

...and a two-faced Congress that looks away while taxpayers subsidize bonuses at AIG.

Let's hope the USA gets through the "try everything else" phase quickly, so we can all get to that "do the right thing" part soon...

[Jeff]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

In spite of what Gil Scott Heron believed, the revolution will NOT be televised. It will, however, be all over YouTube. You can only push so hard.

Debts to the IRS and student loans have long been bankruptcy-proof debts. I suppose it makes some sense but in a shitty economy it's a bear. Can I tell the story about graduating from college in 1982 into the highest unemployment rate in generations?

[Wild Style]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

In spite of what Gil Scott Heron believed, the revolution will NOT be televised. It will, however, be all over YouTube. You can only push so hard.

Debts to the IRS and student loans have long been bankruptcy-proof debts. I suppose it makes some sense but in a shitty economy it's a bear. Can I tell the story about graduating from college in 1982 into the highest unemployment rate in generations?

A honest question for all. What do you guys think the reaction of the "ignorant" masses will be as things get worse and some debts, like stains wont wash out?

Also did anyone listen to the Catherin Austin Fitts interview on the coast to coast radio show someone posted on youtube? This lady imho seems to be extremely sheltered and out of touch with reality. She seems to think people wont rise up and that the only way to change things is to hold hands and sing love ballots until the system rights itself. Ok, maybe she didn't say that but she did say spirtual movements and peaceful organization is the only way systems change and that violence doesnt work. seems her history books must be broken.

[Sharky]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

A honest question for all. What do you guys think the reaction of the "ignorant" masses will be as things get worse and some debts, like stains wont wash out?

More bankruptcy (even if some debts won't wash out, others will), foreclosures and unemployment, leading to more calls for government intervention -- more nationalizations, regulations and general interference in the economy. Followed by more business failures, and it starts all over again. There might be some demonstrations at first, but it's tough to demonstrate when you're hungry.

Also did anyone listen to the Catherin Austin Fitts interview on the coast to coast radio show someone posted on youtube? This lady imho seems to be extremely sheltered and out of touch with reality. She seems to think people wont rise up and that the only way to change things is to hold hands and sing love ballots until the system rights itself. Ok, maybe she didn't say that but she did say spirtual movements and peaceful organization is the only way systems change and that violence doesnt work. seems her history books must be broken.

CAF is an eternal optimist. She definitely understands how bad things are going to get, but she's trying to take the high road and do something constructive. I admire her for that, even though I think the chances of success are slim.

[hayekvindicated]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

For the past 3 decades it has become the norm to borrow for rapidly increasing tuition costs. Currently ~ 66% of college graduates graduate with student loan debt. The average debt for one of these students being ~20k (http://www.finaid.org/loans/). This doesn't include credit card debt, which I'm sure is high considering the aggressive marketing by CC companies to students.

The numbers are higher for those graduating with masters degrees which seem to be getting more and more popular. During the last downturn (2001-2003) graduates unable to find jobs opted for graduate school and many took on extra debt to do so. This time, it seems to be happening again ( http://www.mlive.com/flintjournal/in...arity_inc.html )

But what if we ARE about to enter the second great depression? In that case, the jobs won't be back for quite some time. What if we have millions of young people graduating with crushing debt burdens and finding it difficult to get a job even at Starbucks? Even lawyers who are graduating over 100k in debt may struggle in a depression economy, and student loans can't be wiped through bankruptcy.

What's going to happen when these kids can't find jobs to pay back their loans?

Speaking as somebody who has a Master's degree, I believe college education is mostly useless unless one intends to become a lawyer or a doctor or enter into a specialised area like engineering. The vast majority of people DO NOT require college degrees for the work they do. It is a wasteful societal fad that piles on debt on the unwary, wastes enormous time and resources teaching things to people that they never use in their career.

The proliferation of university education is another example of the wastefulness that characterises contemporary America and Britain. In the 1980s, a statistic encapsulated the situation: America has 15 times as many lawyers per thousand as Japan, Japan has 15 times as many engineers per thousand as America.

[Wild Style]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

More bankruptcy (even if some debts won't wash out, others will), foreclosures and unemployment, leading to more calls for government intervention -- more nationalizations, regulations and general interference in the economy. Followed by more business failures, and it starts all over again. There might be some demonstrations at first, but it's tough to demonstrate when you're hungry.



CAF is an eternal optimist. She definitely understands how bad things are going to get, but she's trying to take the high road and do something constructive. I admire her for that, even though I think the chances of success are slim.

great post. dont know about the hunger = no riots thing though. Those Afghanis put up one hell of a fight on naan bread and water against the Russians.

[GRG55]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

A honest question for all. What do you guys think the reaction of the "ignorant" masses will be as things get worse and some debts, like stains wont wash out?

Also did anyone listen to the Catherin Austin Fitts interview on the coast to coast radio show someone posted on youtube? This lady imho seems to be extremely sheltered and out of touch with reality. She seems to think people wont rise up and that the only way to change things is to hold hands and sing love ballots until the system rights itself. Ok, maybe she didn't say that but she did say spirtual movements and peaceful organization is the only way systems change and that violence doesnt work. seems her history books must be broken.

I'm trying to think of a modern example [let's say in the last 100 years] where violent change actually left the majority better off?

[Wild Style]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

I'm trying to think of a modern example [let's say in the last 100 years] where violent change actually left the majority better off?

What do you mean by better off? You as a outsider may say such and such a place is worse off than before the revolution but is it that clear cut and dry? You have media telling the American or western public one thing about events inside one country when in reality things are another thing. So we have to tackle what is your perception. Secondly you have to look at the facts as far as are things better/worse off because of the coup d’état or because of outside meddling. Which is the case in many of these developing nations (especially the ones with resources.) So all things are not equal here.

[GRG55]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

What do you mean by better off? You as a outsider may say such and such a place is worse off than before the revolution but is it that clear cut and dry? You have media telling the American or western public one thing about events inside one country when in reality things are another thing. So we have to tackle what is your perception. Secondly you have to look at the facts as far as are things better/worse off because of the coup d’état or because of outside meddling. Which is the case in many of these developing nations (especially the ones with resources.) So all things are not equal here.

Evidently you can't think of one either...

[metalman]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

Evidently you can't think of one either...

yeh, choose your glorious revolutionary. step right up...

[Sharky]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

I'm trying to think of a modern example [let's say in the last 100 years] where violent change actually left the majority better off?

How about the overthrow of Mussolini at the end of WW II? The collapse of Germany after WW II could also be classified as "violent change." Ghandi's revolution in India could also be considered violent, even though the violence was mostly one-sided.

But why does it have to be a modern example? There are certainly other examples of where that has happened, such as the American Revolution. However, it does seem to usually take countries a while to recover after overthrowing a dictator -- sometimes quite a while, as with the French Revolution -- and maybe never (or at least not yet), as with the Russian Revolution.

[metalman]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

How about the overthrow of Mussolini at the end of WW II? The collapse of Germany after WW II could also be classified as "violent change." Ghandi's revolution in India could also be considered violent, even though the violence was mostly one-sided.

But why does it have to be a modern example? There are certainly other examples of where that has happened, such as the American Revolution. However, it does seem to usually take countries a while to recover after overthrowing a dictator -- sometimes quite a while, as with the French Revolution -- and maybe never (or at least not yet), as with the Russian Revolution.

you have to admit that rarely do the benefits outweigh the costs... for the revolutionaries, that is.

[LargoWinch]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

yeh, choose your glorious revolutionary. step right up...

Meet the Prince of Darkness (since 1979):

[SupermanTattoo]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

I was wondering about student loans from a different perspective. I am a big debtor...I'm about 70k in debt from my MBA. My loan is variable and I believe tied to 91-day T-bill rate. Given the itulip hypothesis of extremely high inflation won't this actually benefit me since even in the high inflation environment, the T-bill rate will stay relatively low? Should I be trying to consolidate to a fixed rate given the 8 years I have left on it?

[metalman]

Re: Financial collapse and student loan debt burdens. How will they pay the loans back?

I was wondering about student loans from a different perspective. I am a big debtor...I'm about 70k in debt from my MBA. My loan is variable and I believe tied to 91-day T-bill rate. Given the itulip hypothesis of extremely high inflation won't this actually benefit me since even in the high inflation environment, the T-bill rate will stay relatively low? Should I be trying to consolidate to a fixed rate given the 8 years I have left on it?

that depends. where'd you get the mba? a state school? you're in trouble. ivy league... maybe you can pull some strings and get a good job?

ha, ha. i'm just screwing with ya. sort of.

what kind of student loans are tied to 3 mo tbills? never heard of that.

your deal ain't rates it's can you get a J.O.B. post fire econ. right? don't mean to be too harsh here.