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Intro: "America is currently embroiled in a student loan bubble and when it pops ... let's just say that I hope you can use some lacquer and a long stick to turn your college diploma into some sort of edged weapon to fight off the starving graduate student food mobs."

Student debt has surged as tuition and enrollment continue to climb. (photo: Gawker)
Student debt has surged as tuition and enrollment continue to climb. (photo: Gawker)

The Student Loan Mafia Is Coming for Your Mom

By Hamilton Nolan, Gawker

02 May 12


merica is currently embroiled in a student loan bubble and when it pops, wooo buddy. *Makes whistling sound, gazes off into distance*... let's just say that I hope you can use some lacquer and a long stick to turn your college diploma into some sort of edged weapon to fight off the starving graduate student food mobs. Let's just leave it at that. Let's not get explicit, except to say that banks will literally take your mother's home if you try to not pay them back, so, you know, the weapon thing is maybe the way to go.

See, thanks to some nifty lobbying, you can't discharge your student loan debt through bankruptcy, even though that more or less ruins the entire point of bankruptcy for the younger generation of Americans. The WSJ explains the problem in a nutshell:

In the past decade student debt has surged as tuition and enrollment climbed. At the same time, college graduates' earnings have declined. The average debt load of all new graduates rose 24%, adjusted for inflation, from 2000 through 2010, to $16,932, says the Progressive Policy Institute, a left-leaning think tank in Washington. Over the same period, the average earnings of full-time workers ages 25 to 34 with no more than a bachelor's degree fell by 15% to $53,539.

To review: huge loans, poor job market, low earnings potential, debt that is inescapable through legal means. What could go wrong? Now, some Congresspersons who must have forgotten upon which side their bread is buttered (the banking industry's side, naturally) are trying to put together some wee modifications to the bankruptcy law which might allow this hopeless generation to retire their debts in a manner that avoids total violent revolution in the streets. Of course, even if Congress somehow did deign to allow you to escape your student debt through bankruptcy, the banks would make sure to ruin your parents at the same time:

While the legislation is aimed at helping thousands of borrowers struggling with debt, some experts say banks seem to have prepared for this possibility. Since they now require cosigners on most of the loans, both the borrower - and in many cases his or her parents \u2013 would need court-approved bankruptcies in order to wiggle free of the debt.

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+32 # cadan 2012-05-02 10:48
We are dedicated to our own destruction.

How can it possibly be bad for us to have an educated population?

Society benefits from practically any form, whether something very technical like electrical engineering, or something very "literary", like history, so that we don't continually forget our sketchy past.

Why can't it be free?

$1 trillion in educational debt could be wiped off the books for less than the cost of the war against Iraq.

Is that really something we cannot afford?
+1 # cordleycoit 2012-05-02 11:12
You see why the Obama Administration has protected the bankers. So they cn steal our homes. Bankers seem to be Republicans who buy the guys from Chicago. Why is this happening? All sides of Congress are pigs feeding in the lobbyist's trough
+6 # barbaratodish 2012-05-02 11:16
Instead of GETTING HIGHER EDUCATION,HIGHE R ED got students! Professors(I was an adjunct instructor for years @ universities & community colleges) are afraid to teach critical thinking.Yes,IM HO, I tried to teach critical thinking, got banned.Most professors have yet to critically think for themselves! Academic jargon(mumble speak?)is substituted for communication in the "Higher Ed" classroom! Professors are focussed on "teaching to assessment",wor ry @ how their class their college, university will perform statistically,f or accredidation-r ead STUDENT LOAN qualified-& how their evaluations. Professors, administrators & students hardly HAVE a thinking self TO BE assessed. Professors PROFESS via power point, just show movies, it's similar to 2nd grade teachers turning the light off in the classroom, saying "Put your heads down on your desks, sleep."(I witnessed this & yes, tried to report it,was fired, tried to use whistleblower statutes,was accused of doing WHAT I whistleblowed about-talk about freezing,(what is boommeranging!) speech!Join petition:
+17 # hobbits6 2012-05-02 12:02
While we elect individuals who read the constitution as government "by the rich and for the rich" students in Sweden have their tuition, books, medical care paid for by the state. And the state provides a $700 per mo living allowance. The country has one on the highest standards of living in the world. When will we start electing folks who care about us?
+3 # Billy Bob 2012-05-03 19:16
Sweden even pays its students to study abroad. One of my friends in college was a Swedish student with MONEY TO BURN compared to me.
+19 # Citizen Mike 2012-05-02 13:17
How can it possibly be bad for us to have an educated population? A well-educated generation of nonrich youth having access to colleges at reasonable cost is a threat to the empire. Remember what happened in the 60s and 70s? Well-educated youth revolted against government authority and corporate dominance, renounced violence and materialism and formed a loud and massive antiwar-hippie- psychedelic movement affirming the Family of Man over More War and More Stuff. The establishment will not tolerate that again, and seeks to prevent it by downgrading public schools and placing colleges out of reach. To create a more ignorant, docile and obedient public. And by enslaving college graduates to debt peonage. Got that?
+5 # panhead49 2012-05-02 14:18
Well, they ain't gonna get this mom's house. The kids are going to college the same way I did - on the G.I.Bill. We're old fashioned like that around here - heck, I even read my mortgage before signing it. Great motivator for paying that sucker off early.

Went to the bank this morning and one of the tellers was bemoaning the fact of all the damage done to those poor merchants (in Oakland) because of the May Day protests - we have what we have in America because most Americans act like chum - then can't figure out why they are being digested.
+4 # soularddave 2012-05-03 05:44
A little perspective: In 1965 I went to state college and it cost $85/ semester for books - that's all. We had a war going on, too (I got drafted). Lots of kids sis the same thing.
Clue: The tax structure was different.

Ever wonder why the right wing wants to go back to "the good ol' days", but supports Corporatization and tax breaks for the rich? Maybe too much kool-aid and TV? Maybe they didn't pay attention in class? Maybe they're just selfish little draft dodgers?

Today's young people are up against a wall and maybe -just maybe, we'll see than in the streets demanding justice in its many forms. They should be; the conditions are right - again.
+1 # Elene 2012-05-05 23:22
If most young college graduates with $17,000 in debt were really making over $53,000 per year, there wouldn't be the degree of trouble we're seeing. The problem is more that so many of them are making $0 because they can't find jobs at all, or making less than $10 per hour at jobs that don't match their level of education.

My daughter isn't making a lot of money, but she also has no debt, thanks to a combination of the lottery scholarship here in NM, going to school in her home town, and money we had put aside for tuition. Not everyone is so fortunate.

Many articles, like this one, leave out a major reason for the huge amount of student debt-- private, for-profit "colleges" that charge gigantically high tuition but fail to give students an education that actually allows them to get a job. Cracking down on these schools would be a great help to the country.

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