THE GREAT STUDENT LOAN SCAM

Doug Short quantifies the amount owed to the government for student loans, but he doesn’t discuss the absolute fact that hundreds of billions will never be repaid. The Obama administration is solely responsible for this disaster and they don’t give a shit. Keeping millions of morons in school artificially lowers the already fake unemployment figures. Doling out billions in loans to functionally illiterate dumbasses is a perfectly acceptable liberal solution.

The government is hiding the true disaster in plain sight. Obama has the balls to declare that “only” 11.6% of student loans are in default. Now that’s funny. Here are the facts:

  • Total student loan debt outstanding of $1.32 trillion.
  • The Federal government is owed $972 billion, up from the $945.6 billion in Doug’s article.
  • Loans in official default of $51 billion.
  • Loans officially in repayment of $400 billion – the other $500 billion isn’t due because the students are still in school or the government says they don’t have to pay because they have a good excuse (like the dog ate their homework).

According to the government that makes the default rate a high, but reasonable 11.6%. One problem. The total amount of debt that should be in repayment is $600 billion, not $400 billion. There is $200 billion of student loan deb that should be being paid back, but the government has either allowed forbearance or deferment. The reasons allowed for these categories are unemployment, non-full time job, or the ever popular financial hardship.

So in layman terms, that means that $200 billion is in DEFAULT. They aren’t paying because they can’t pay. Therefore, the true default rate is 38%, not 11.6%. Obama and his minions prefer the BIG LIE when reporting any statistic. And what’s worse, this is after shifting $200 billion of debt to their new and improved repayment programs with Orwellian names like: Income-contingent plan, Income-based plan, Pay As You Earn. 

Obama and his Keynesian acolytes are doing everything in their power to shift hundreds of billions in bad loans onto the backs of taxpayers. Every time one of these fraudulent for profit diploma mills goes bankrupt or is charged with fraud by the government, they relieve the debt of the morons who were stupid enough to enroll in these criminal institutions. Relieving their debt means you pay. Easy peasy. Who could have possibly figured out the University of Phoenix, Corinthian, Devry, ITT, and the rest of the for profits were a fraud? 

Obama continues to dole out over $100 billion per year in future bad debt to people intellectually incapable of succeeding in college, with no oversight, no realistic chance of getting repaid, and no concern for the massive budget implications. The losses to taxpayers will be in excess of $300 billion. So it goes. 

 

Guest Post by Doug Short


Pop Quiz! Without recourse to your text, your notes or a Google search, what line item is the largest asset in Uncle Sam’s financial accounts?

  • A) U.S. Official Reserve Assets
  • B) Total Mortgages
  • C)Taxes Receivable
  • D) Student Loans

The correct answer, as of the latest quarterly data, is … Student Loans.

Continue reading “THE GREAT STUDENT LOAN SCAM”