The Market Ticker – NOW You Noticed? (Student Loans)

I don’t know whether the laugh, cry, or wish for (another) hurricane or other natural disaster to destroy the clown-car brigade involved in this intentional, rabid and outrageous assault on our young people.

Payments on 11% of student-loan balances were 90 or more days behind at the end of September, up from 8.9% at the end of June, a rate that now exceeds that for credit cards. Delinquency rates for all other consumer-debt categories fell or were flat.

Nearly all student loans—93% of them last year—are made directly by the government, which asks little or nothing about borrowers’ ability to repay, or about what sort of education they intend to pursue.

The government doesn’t care if you can pay.  All they care about is making sure that the banks and colleges get to screw you, and if they can manage to get you to “volunteer” for that screwing, so much the better.

I’ve been writing about this for several years; you can find examples all through the Ticker, and have been breaking out student loans from the consumer credit report since the federal government shifted nearly all student lending to themselves a couple of years ago.

This is the next bubble to pop and the worst part of it is that it was targeted directly and intentionally at inexperienced people barely of legal age and has intentionally screwed our young adult population both through exploitive terms (e.g. no ability to discharge said debt in bankruptcy) and the intentional feedback mechanism into college pricing.

Were the federal government not directly involved in this and in fact the designer of this scheme someone would probably craft a racketeering complaint and go after the colleges and lenders involved.

When the federal government does it, however, we call it “public policy.”

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