Student Debt Bubble Officially Pops As 90+ Day Delinquency Rate Goes Parabolic

[AZRedhawk44]

No matter what happens with student debt, you can't ignore that the debts are being unpaid.

Prediciton time!

The president will propose, and push, within this term, forgiveness of all government held student debts. 

Thank God that I will have my loans paid off in full with complete honesty and integrity before this happens.  Should be done by June.  I owe $3800 or so, and pay about $600 a month on that.

ANd I say EVERY ONE OF US who can take advantage of such a disaster do so, if for no other reason than to break it.

I want nothing to do with Government having any claim over my degree or my mind.

[SADShooter]

My loans being pre-conversion and privately held, it shouldn't affect me. I'll keep making payments, which I've never missed excepting an unemployment forbearance, until they're gone.

[Scout26]

Meanwhile the president is off campaigning about the fiscal cliff.  Republicans are going back on their No-new taxes pledge in an attempt to meet the Democrats halfway.  Yet the Democrats have offered no meaningful cuts (all cuts take place in "out-years").  It should be for every $1 in new revenue this year, then $3-$4 in cuts THIS YEAR.  Obama will not got for it, so off the fiscal cliff we will go. Fun, Fun.

Meanwhile the banks will be clamoring to be bailed out for all the bad student loans they hold. 

[agricola]

Student debt Of this magnitude exists because government throws billions of dollars at the academic system.  Stop that and you will lower costs and that will reduce the debt load.

As for the current levels of debt I say let the colleges and universities eat the majority of it.

Perhaps, though the pre-1994 system in the UK (where the state paid for the fees and provided a very small grant towards living expenses for students who had the academic ability but not the means to attend, and paid for the fees for most other students) was at least as good at keeping costs down, removed debt from the equation entirely and still resulted in the money being paid back because of the increased taxes paid by graduates once they went to work. 

[longeyes]

It is the scale that has changed. 

Half century ago we did not have university presidents making half a million a year or law professors making $300-$400,000 a year.

[MillCreek]

^^^ Or college football coaches making a million a year.  What the heck does that have to do with academics?

[longeyes]

When did education become welfare for the mind?

[Tallpine]

When did education become welfare for the mind?

It's a "constitutional right" - doncha know? 

[SADShooter]

When did education become welfare for the mind?

When the Federal government decided to impose itself on the marketplace, of course, and the hammer found its nail.

[White Horseradish]

As for the current levels of debt I say let the colleges and universities eat the majority of it.

How do you propose to do that? They aren't the ones holding the  loans.

[longeyes]

Cut off the subsidies commensurately.

[charby]

It is the scale that has changed.  

Half century ago we did not have university presidents making half a million a year or law professors making $300-$400,000 a year.

A think very few law professors actually make $300-400k, that would be more the medical professors.

So what did university professors get paid 50 years ago, then adjust for inflation.

according to fistful's inflation calculator $65,000 in 1962 is about $500,000 in 2012 dollars.

[Jamisjockey]

Cut off the subsidies commensurately.

The entire federal loan scam is a subsidy.

[Physics]

I find it funny that there are so many people going to college, but so few majoring in subjects that are actually employable.  To me, this is a failure at the personal level, the failing of each individual student who chooses to do what they love, not what will help them succeed.  There are many useless degrees out there.  And yet, at the same time, we are completely falling behind in Science, Technology, Engineering, and Mathematics (STEM).  These subjects are absolutely critical to our country, as if I need to tell this group, and yet we can't find enough people to fill these jobs.  Yet we have an over-abundance of underwater basket weavers. 

[MicroBalrog]

If that was true then is would be no problem for colleges to become partial cosigners on student debt. They would be taking on no additional risk, regardless of the major. The risk tables would be the same for ChemE, MechE, Pre-Med, Business & Finance, and History and colleges would accept student loans in these fields all the same.

But if it is not true, then colleges would fight this rule change tooth and nail. Because if implemented they would have to rescale the student body size per degree according to the job market demands (except for the students who pay cash up front, they will always be able to do whatever they want).

No, the problem is that 90% of the peopel who get these degrees are not interested in learning anything at all

Also 'this major is not unemployable' is not the same as 'all majors are equally employable'.

[Jamisjockey]

No, the problem is that 90% of the peopel who get these degrees are not interested in learning anything at all

Also 'this major is not unemployable' is not the same as 'all majors are equally employable'.

How about "there is no market to sustain X number of these majors, therefore Y number of these majors are unemployable"??

Easy money for education and lack of direction for that money has pushed a huge number of people into feel-good and easy-sounding degrees, with no market for said degrees.  Therefore, those people are unemployable.

[longeyes]

This process is not education it is labeling, no different from stamping a brand at the plant. 

[MillCreek]

How about "there is no market to sustain X number of these majors, therefore Y number of these majors are unemployable"??

Easy money for education and lack of direction for that money has pushed a huge number of people into feel-good and easy-sounding degrees, with no market for said degrees.  Therefore, those people are unemployable.

This can be so dependent on the economy, though.  I graduated with an honors grad degree in chemistry in the early 80's, and there were no jobs in my field at that time during the recession then.  There are nurses graduating now who cannot find jobs due to the economy and the recession in the hospital field.  I know mechanical engineers in this area who are looking for work.  So you can easily have people with good degrees who still cannot find jobs as a function of the economy. 

[Stetson]

And I was thinking about going to a real college for a couple of reasons, mostly to get the 4-yr degree.  I can't get my foot in the door on a lot of jobs because of this.  I have done the jobss with other companies but I can't get past the HR drones.

[MicroBalrog]

How about "there is no market to sustain X number of these majors, therefore Y number of these majors are unemployable"??

Easy money for education and lack of direction for that money has pushed a huge number of people into feel-good and easy-sounding degrees, with no market for said degrees.  Therefore, those people are unemployable.

The problem is not inherent with the 'uselessness' of things taught in these degrees. Rather, it is inherent with the 'uselessness' of most people who attend them.

[zahc]

These subjects are absolutely critical to our country, as if I need to tell this group, and yet we can't find enough people to fill these jobs.

[citation needed]

[Boomhauer]

And I was thinking about going to a real college for a couple of reasons, mostly to get the 4-yr degree.  I can't get my foot in the door on a lot of jobs because of this.  I have done the jobss with other companies but I can't get past the HR drones.

Another part of the stupidity,

"You gotta have a 4 year degree to even be considered for this position, even though you will never use the degree in it and it doesn't matter what the degree is in". THAT is a load of bullshit driven by "management" dipshits.

[kgbsquirrel]

Another part of the stupidity,

"You gotta have a 4 year degree to even be considered for this position, even though you will never use the degree in it and it doesn't matter what the degree is in". THAT is a load of bullshit driven by "management" dipshits.

+1. Part of the reason why I'm not working as a civi doing the same stuff I was doing in the military. Loads of cross discipline practical experience and a demonstrated ability to learn out-of-field jobs quickly, but don't have the required $100,000 piece of parchment.

[RocketMan]

Student debt Of this magnitude exists because government throws billions of dollars at the academic system.  Stop that and you will lower costs and that will reduce the debt load.

This becomes true for anything at which the government throws money.

[birdman]

^^^ Or college football coaches making a million a year.  What the heck does that have to do with academics?

Nothing.  However, it DOES have a lot to do with economics.  If the school didn't believe the marginal revenue increase associated with spending the money on a more expensive coach wasn't greater than the marginal increase in pay vs a cheaper coach, they probably wouldn't. 
Why is marginal return on invested capital or NPV of revenue vs NPV of cost so hard for people to see as an or the only reason for economic decisions?