Taxpayer

31% Of College Students Spend Their Loans On Spring Break

Obama’s $700 billion investment of your tax dollars in the youth of America, really paying dividends.

As Washington D.C. liberals continue their fight for ‘free’ college education for all (which, of course, is just a nicer way of saying largely useless community college education crammed down the throats of taxpayers) and student loan forgiveness programs, a new study from LendEDU reveals some of the shocking realities behind where college students are really spending their $1.3 trillion worth of student debt.

native advertising

Per a survey of 500 college co-eds, LendEDU found that 31% of students, or roughly 2.4 million kids, admitted to using student loan money to fund their binge drinking trips to Cancun and Daytona Beach for spring break.

Continue reading “31% Of College Students Spend Their Loans On Spring Break”

HILLARY: DECEIT, DEBT, DELUSIONS (PART ONE)

“While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.”
― Henry Hazlitt, Economics in One Lesson

One of the benefits of running a blog for the last seven years has been interacting with so many smart people. During these daily interactions I am introduced to new ideas, different points of view, and become acquainted with a plethora of great thinkers. When I was younger, before kids, long commutes, running a blog and being beaten down by life, I was a voracious reader. My regular commenters direct me towards writers and books I wish I had read in my twenties rather than my fifties.

But I guess it is never too late to learn something new. I’ve now read the first two of the four books I bought myself at Christmas: The Law by Frederic Bastiat; Economics in One Lesson by Henry Hazlitt; The Road to Serfdom by F.A. Hayek; and Tragedy & Hope by Carroll Quigley. What is so striking after reading The Law (written in 1850) and Economics in One Lesson (written in 1946) is humanity’s foibles, belief in fallacies, and ignorance of economics hasn’t changed over the last two centuries.

Continue reading “HILLARY: DECEIT, DEBT, DELUSIONS (PART ONE)”

DIPLOMA MILL ITT – AND IT’S GONE!!!

Five years ago ITT Educational Services had revenues of $1.5 billion and profits of $300 million. Of course, it was nothing but a scam diploma mill totally dependent upon Federal student loans. It’s stock traded for $77 per share. Yesterday the Feds said they would no longer fund federal loans to this diploma mill. It’s stock this morning is trading at 64 cents. And it’s gone!!!

Guess who will be picking up the tab for all the loans doled out to the brainless twits who enrolled at ITT during the reign of Obama? YOU!!!

I wonder who was writing articles about this diploma mill scam years ago? Who coulda knowed?

University of Phoenix is next.

http://www.theburningplatform.com/2012/06/01/seven-years-of-college-down-the-drain/

http://www.theburningplatform.com/2012/10/21/dysfunctional-dishonest-insane-intolerable/

http://www.theburningplatform.com/2013/02/06/all-is-well-3/

http://www.theburningplatform.com/2015/03/01/breaking-bad-debt-episode-three/

http://www.theburningplatform.com/2016/03/19/the-great-student-loan-scam/

YOU ARE PAYING FOR SPRING BREAK

Obama and his government minions have doled out over $1.3 trillion to our yuuts so they could get educated. I bet you didn’t know that the funds aren’t all directed to the school for tuition and fees. The funds for books, rent, and living expenses are given directly to the student. How many responsible 18 to 21 year olds do you know. We already know that over 50% of the morons matriculating into college have 0% chance of graduating because they are dumber than a sack of hammers.

But they do know how to spend “found” money on iGadgets, HDTVs, booze, concerts, fast food, and they absolutely need to kick back on Spring Break after getting 3 D’s, a C in remedial maff, and an F in financial planning. It seems millions of these morons are spending their student loan money on a good time. They deserve it.

The best part is that Obama and his cronies wanted this to happen. The student loan scam was nothing but an artificial attempt to reduce unemployment and boost GDP. It’s been a huge success. Now that 40% of all student loans are in default, your government will come up with some asinine reason for writing off at least $500 billion. That means, you funded the spring breaks of these worthless pieces of shit. Happy Saturday suckers.

Via Bloomberg

Can You Use Student Loans to Go on Spring Break?

The essential college experience requires all-nighters at the library and, to some, a keg stand or two and a less-than-lucid spring break vacation. And much like a degree, tequila shots and beachside hotels don’t come cheap.

About one in five American students graduating this year who carry debt said they used student loans to pay for such expenses as vacations, dining out, and entertainment, according to a poll¹ conducted in early May by Google Consumer Surveys on behalf of Student Loan Hero. Undergraduates finishing college in 2014 owed an average of $28,950 in student debt, the result of loans taken out to cover both tuition and living expenses.

But when is it living, and when is it living it up?

Beyond tuition and housing, cost-of-attendance expenses that can be paid for with student loans include books, school supplies, transportation, and “miscellaneous personal expenses,” according to the U.S. Department of Education. Asked whether that covers vacations, the department said it would look into the matter.

Continue reading “YOU ARE PAYING FOR SPRING BREAK”

Via Townhall

Don’t Think the Status Quo Will Save You

Guest Post by Charles Hugh Smith

Here’s a chart that shows how the Status Quo “fixes” every problem: it transfers more debt and more losses to the taxpayers.

Many hold a touchingly naive faith that the Status Quo will save them even as the current system unravels. Why is this faith naive?

Let’s start with this key question: does the Status Quo strike you as being even remotely competent?

If you answer “yes,” we have to ask: what planet are you on? Mars? Here on Earth, no one that isn’t a bought-and-paid for-shill of the Status Quo would even make the risible claim of Status Quo competence, except as a bitter joke.

The Status Quo assumes we can’t deal with the truth like adults, and so it sugar-coats every unsolvable problem with lies and false assurances. The Status Quo assumption is the Great Unwashed 90% will shoot the messenger, i.e. toss out our public leadership should they be foolish enough to tell us the truth: the promises issued to you cannot possibly be fulfilled.

Not because of an evil cabal, but because the demographics and financial realities render the promises impossible to keep, regardless of who’s in office.

Continue reading “Don’t Think the Status Quo Will Save You”

ANOTHER FOR PROFIT DIPLOMA MILL CAUGHT SCREWING THE TAXPAYER

ITT Educational Services is just another taxpayer scam. Corinthian, University of Phoenix, DeVry, and every other for profit college that spend more on advertising than the annual revenue of Ivy League business schools are nothing but government enriched phony educational fronts. The billions of loans doled out to “students” by our beloved Obama haven’t made anyone smarter. Most of this money has been absconded by these fake colleges and the fake students who pretend to go there.

WTF? Over 52% of all the students who enroll in these clown colleges drop out within one year. The graduation rates are about 20% and the number of graduates who get a job in their field of study is about 2%. Where does the money go. No one seems to know, because that isn’t the point. Obama is perfectly fine with these fake students using the money to prop up the economy by buying iGadgets and burritos. It’s all good. When the government declares each of these “colleges” to be a fraud, they’ll relieve all the fake students of their debt.

That means they’ll write off hundreds of billions and hand you the bill. Isn’t Obama’s ‘Murica great?

Via Marketwatch

The government is cracking down on funding for a major for-profit college chain

ITT Educational Services is facing new restrictions on its financial aid funding from the Department of Education.

The Department sent a letter to ITT’s chief executive, Kevin Modany, on Monday, outlining tightened financial controls on the company. The new restrictions are a response to ITT’s “failure” to meet its “fiduciary obligations” to the Department since the 2009 to 2010 financial aid award year, Michael Frola, the director of the Department’s multi-regional and foreign school participation division, wrote in the letter.

Under the new restrictions for ITT ESI, -5.21% it will be required to prove to the Department that a student actually began attending classes before the company can disperse the aid to the student. Typically, schools are allowed to disburse financial aid up to 10 days before the first day of classes. The company will also face additional reporting requirements on its enrollment and disbursement of financial aid.

Since the 2009 to 2010 financial aid award year, ITT has struggled to reconcile the amount of financial aid money it pulled from the Department with the charges students actually incurred, according to the Department’s letter. The discrepancy could be an indication that a large number of students withdrew from the school after ITT had already tapped the financial aid dollars dedicated to the students, said Elizabeth Baylor, the director of post-secondary education at the Center for American Progress, a left-leaning think tank.

When Baylor worked as a staffer on the Senate’s Health, Education, Labor and Pensions committee, she said her team found that of ITT students who enrolled during the 2008 to 2009 academic year, 52% had withdrawn one year later. The average withdrawal rate for students at for-profit colleges was 54.5% that year. ITT was “falling down on its fiscal responsibility” because it was unable to even identify how quickly its own students were withdrawing, Baylor said. “That in and of itself is a huge cause for concern.”

Continue reading “ANOTHER FOR PROFIT DIPLOMA MILL CAUGHT SCREWING THE TAXPAYER”

7 Million People Haven’t Made A Single Student Loan Payment In At Least A Year

Submitted by Tyler Durden on 08/22/2015 11:43 -0400

Perhaps it’s all the talk about across-the-board debt forgiveness or maybe the total amount of outstanding student debt has simply grown so large ($1.3 trillion) that even those with no conception of how much money that actually is realize that it’s simply never going to paid back so there’s no point worrying about, but whatever the case, the general level of concern regarding America’s student debt bubble doesn’t seem to be at all commensurate with the size of the problem.

And it’s not just the sheer size of the debt pile that’s worrisome. There’s also the knock-on effects, such as delayed household formation and the attendant downward pressure on the homeownership rate, and of course hyperinflation in the rental market.

Of course one reason no one is panicking – yet – is that the severity of the problem is masked by artificially suppressed delinquency rates. As we’ve documented in excruciating detail, if one excludes loans in deferment and forbearance from the numerator in the delinquency calculation, but includes those loans in the denominator then the delinquency rate will be deceptively low. In any event, as WSJ reports, even if one looks at something very simple like, say, the number of borrowers who haven’t made a payment in a year, the picture is not pretty and it’s getting worse all the time. Here’s more:

Continue reading “7 Million People Haven’t Made A Single Student Loan Payment In At Least A Year”

Why Obama’s Favorite Student Debt “Relief” Program Will Cost Taxpayers $100 Billion

Submitted by Tyler Durden on 08/07/2015 11:25 -0400

A few months back, we called the government’s Income Based Repayment plans, or IBR, “the student loan bubble’s dirty little secret.” As the name implies, the idea with IBR is that monthly student debt service payments are based on the borrower’s disposable income. The less money one makes, the less one has to pay. Each monthly installment under the program counts as a “qualifying payment”, and after 300 of these, the balance of the loan (assuming it’s not paid off after 25 years), is forgiven. Perhaps the most interesting thing about this scheme is that it allows for “payments” of zero. Here’s what we said back in April:

After 300 “qualifying monthly payments” — so after 25 years of payments — any remaining balance is forgiven and legally discharged. The interesting thing about this is that if the calculated payment is zero, it still counts as a “qualifying monthly payment.” That is, if, based on the borrower’s financial situation, he/she is not required to make an actual cash payment for a period, that period still counts towards the 300 “payments” needed to have the balance of the debt discharged, meaning that in the end, borrowers could end up paying substantially less than principal (taxpayers eat the balance) and are effectively allowed to remain in a perpetual state of default while avoiding actual payment default along the way.

Needless to say, when borrowers elect to enter an IBR plan, the payment streams from their loans become far more unpredictable, which is why suddenly, Moody’s and Fitch can’t figure out how to rate student loan-backed paper. The best (and most hilariously absurd) idea yet comes from Citi, who suggested last month that Moody’s should consider scrapping the whole idea of loan maturity, because after all, one can’t really default on a loan with an indeterminate maturity date so if you just amend the bond indentures and extend the legal maturity date to infinity, you don’t have to downgrade the ABS.

Continue reading “Why Obama’s Favorite Student Debt “Relief” Program Will Cost Taxpayers $100 Billion”

Taxpayers To Lose Billions On Student Loan Refinancing

Submitted by Tyler Durden on 06/10/2015 15:40 -0400

Monday marked the beginning of what could end up being one of the largest taxpayer-funded bailouts in history. On the heels of Corinthian Colleges’ move to shutter its remaining campuses after government investigations tied to deceptive practices forced the school to wind down operations last year, thousands of students have appealed to the Department of Education to have their federal student debt forgiven.

The initial joint petition sent to Secretary of Education Arne Duncan came from dozens of consumer and labor organizations claiming to represent some 80,000 aggrieved students seeking to have their loans discharged on the basis that the government’s move to close the school was the result of Corinthian’s fraudulent practices.

Initially, the Education Department wasn’t sure how to proceed, but after two weeks of apparent deliberation, the decision was made that students who attended schools run by Corinthian would be eligible to have their federal student debt forgiven, a move that could cost taxpayers some $3.6 billion.

Should the government crackdown on for-profit institutions continue, the taxpayer bill could run into the tens, if not hundreds of billions. For the Education Department, it’s a choice between eradicating fraud and saddling taxpayers with the bill once the schools are closed.

Continue reading “Taxpayers To Lose Billions On Student Loan Refinancing”

GOVERNMENT USING SUBPRIME MORTGAGES TO PUMP HOUSING RECOVERY – TAXPAYERS WILL PAY AGAIN

It seems hard to believe, but your government is purposely recreating the mortgage debacle of 2007 and putting you on the hook for the billions in losses coming down the road. In their frantic effort to generate the appearance of economic recovery they are willing to gamble with taxpayer’s money while luring unsuspecting blue collar folks into buying houses they can’t afford. During the previous housing bubble, greedy Wall Street bankers, deceitful mortgage brokers, and corrupt rating agencies colluded to commit the greatest control fraud in the history of mankind. This time it is your government, aided and abetted by the Federal Reserve, that is actively promoting the lending of money to people incapable of paying it back. And again, you the taxpayer will be on the hook when it predictably blows up.

The FHA, created during the first Great Depression, is supposed to be self-sustaining through mortgage insurance premiums charged to homeowners, just like Fannie, Freddie, Medicare, Social Security, and student loan lending were supposed to be self- sustaining through taxes, fees, and interest. This agency was supposed to promote homeownership for lower income Americans, but has been used by politicians as a tool to capture votes, payoff crony capitalist benefactors, and as a Keynesian stimulus tool designed to kindle a fake housing recovery. They entered the fray at the tail end of the last Fed/Wall Street created housing bubble, insuring a huge number of subprime mortgage loans from 2007 through 2009. The taxpayer has already had to bail out this incompetent, politically motivated, joke of an agency to the tune of $1.7 billion in 2014.

Edward J. Pinto, a former Fannie Mae official, estimates that under standard accounting practices the agency is already insolvent to the tune of $25 billion. Mark to fantasy accounting hasn’t just benefitted the criminal Wall Street cabal, but also the bloated pig government housing agencies – Fannie, Freddie and the FHA. The FHA’s share of new loans with mortgage insurance stood at 16.4% in 2005 and currently stands at 44.3%. This is a ridiculously high level considering the percentage of first time home buyers is near all-time lows and low income buyers have lower real median household income than they had in 2005. Distinguished congresswoman Maxine Waters, who once declared: “We do not have a crisis at Freddie Mac, and particularly Fannie Mae, under the outstanding leadership of Frank Raines.”, prior to them imploding and costing taxpayers $187 billion in losses, thinks the FHA is doing a bang up job. Her financial acumen is unquestioned, so you can expect another bailout in the near future.

Continue reading “GOVERNMENT USING SUBPRIME MORTGAGES TO PUMP HOUSING RECOVERY – TAXPAYERS WILL PAY AGAIN”

THE FANNIE & FREDDIE FARCE IS OVER & THE TAXPAYER IS ABOUT TO GET A$$ RAPED AGAIN

Interesting how the MSM virtually ignored this little tidbit of information. A report from the inspector general for the Federal Housing Finance Agency, which regulates Fannie and Freddie, warns that these two bloated insolvent pigs are going to face declining profits and miniscule capital cushions which will result in the taxpayers getting fucked over once again.

The inspector general’s report noted that for the past few years, Fannie and Freddie’s net income has been driven by major legal settlements as well as the revaluation of tax assets and other one-time items that aren’t sustainable. That, along with the companies’ declining capital cushion, increases the likelihood they could need more government money in the future.

More government money means more of your money.

Here’s the truth about Fannie and Freddie. They hold trillions of mortgages on their books. Their balance sheets were filled with toxic mortgages in 2008 when the financial collapse occurred. You, the taxpayer, were forced to give these criminal government entities $187 billion to cover their losses.

But that was the tip of the iceberg. In March of 2009 the FASB suspended real accounting and allowed fake accounting for financial firms. So, for the last five years Fannie and Freddie could pretend they weren’t insolvent and have reported fake profits of $228 billion. They were nothing but accounting entries. They didn’t generate actual cash. They reduced their loan loss reserves and recorded tax benefit entries and a myriad of other hocus pocus bullshit.

It gets better. They then pretended to “pay back” the US Treasury with these fake profits. This is a major reason for Obama taking credit for declining deficits. These fake profits reduce the real deficit – on paper. Who says accountants aren’t bad asses?

The way you know these profits are fake is the stock price of Fannie and Freddie. Both stocks trade at $2.50. They have supposedly been generating $25 billion per year in profits – each. Back in 2007 they were generating profits of $4 to $6 billion per year and their stock prices were $70 per share. The market knows they are insolvent and knows the profits are a sham.

But now, even the sham profits have dried up. There are no more journal entries to make. No more fake profits to report. The housing market is headed south, the 3% down mortgages to deadbeats is going to blow up in their faces, and the American taxpayer is going to be ass raped again when the billions in losses start rolling in. This report is telling you what is about to happen. Book it Dano.

Continue reading “THE FANNIE & FREDDIE FARCE IS OVER & THE TAXPAYER IS ABOUT TO GET A$$ RAPED AGAIN”

CHRISTIE’S PLAN TO REVITALIZE ATLANTIC CITY WORKING TO PERFECTION

I sure hope Fat Boy Christie can work his crony capitalistic magic on the whole country as our next President Blimp. His brilliant plan to revive the putrid shithole of Atlantic City by taking taxpayer money and handing it to mega-corporation casinos has worked wonders. If his plan is any more successful there won’t be a casino left in Atlantic City by the end of 2015.

I love watching the union drones protesting the loss of their jobs as the Republican governor pisses away hundreds of millions on the $2.5 billion Revel albatross. It’s as if no one in New Jersey has any common sense, mathematical ability or balls to tell the truth. So I’ll do it.

PA and Delaware have opened dozens of casinos in the last five years. Why would someone from either of those states travel to the dangerous ghetto shithole of Atlantic City to lose their money when they can do it 15 minutes from their house? They stopped going to AC. Shockingly, this resulted in a plunge in AC gambling revenues and profits.

Then Christie and the politician bozos passed online gambling in New Jersey. You can go into debt by gambling away money you don’t have in the comfort of your own living room. Why take your life into your hands by entering the Atlantic City kill zone to lose your welfare paycheck? Shockingly, this has resulted in even less revenue for the gambling meccas in AC.

And guess what? The dumbass middle and lower income clientele who dump their cash into slot machines have run out of cash. They have either no jobs or shit jobs, while their cost to feed, house, and warm themselves has skyrocketed. The dupes and suckers don’t have a pot to piss in as their extended unemployment benefits expire and food stamps get cut.

The signs of collapse are everywhere if your eyes are open. Maybe Fat Boy Christie will come to the rescue again with more New Jersey taxpayer cash to save a few mega-corps and their union drone employees.

PA and Delaware will experience the same thing in the near future. You can’t get a jackpot out of a stone.

Trump Plaza To Close In September As Atlantic City Implosion Claims Fourth Casino

Submitted by Tyler Durden on 07/12/2014 10:41 -0400

The Atlantic City casino industry implosion continues. Following the second, and final, bankruptcy of AC’s “state of the art” Revel Casino a month ago, as well as the shuttering of Atlantic Club hotel Casino and the Showboat hotel casino, the grim corporate reaper has come for one of the most prominent boardwalk casinos of all: Trump Plaza.

The casino which opened in 1984 as a JV between Donald Trump and Harrah’s AC, was for a long time the centerpiece of Donald Trump’s one-time Atlantic City empire, which however promptly escalated into a series of sequential bankruptcies, chipping away at Trump’s reputation and business model, as one after another of Trump’s properties sought Chapter 11 protection.

The final punch came in February 2013 when Trump Plaza was sold to a California company for $20 million – the cheapest ever transaction for an Atlantic City casino, and a fitting testament to the death of this one-time east coast gambling mecca. It was here, however, where a very bored Carl Icahn, once again spread his wrinkled activist wings when in April 2013, as senior lender for the mortgage, Icahn declined to approve the sale for the proposed price and the deal was put on hold.

Unfortunately for Icahn, this is one he may have let go, because as the Philadelphia Inquirer reports, Trump Plaza has decided not to bother with continuing the sale process and will instead shutter permanently. “Trump Plaza Hotel & Casino will shut its doors for good in mid-September, according to state officials who were briefed Friday by lawyers for the casino.”

“I believe Sept. 16 is the targeted closure date that we were told,” said Assemblyman Vince Mazzeo (D., Atlantic). Mazzeo said he and State Sen. Jim Whelan (D., Atlantic) received a phone call late Friday afternoon from a Trump Plaza lawyer. Atlantic County officials also were briefed, he said.

Mazzeo said the attorney told him that Trump Plaza management plans to make a formal announcement and issue 60-day layoff notices to about 1,600 employees Monday.

“This is another blow to the casino industry here,” Mazzeo said. “With mid-September the timing of the closing, it will have a devastating impact on the local economy.”

The news will hardly come as a great surprise: there has been speculation for more than a year that Trump Plaza was on the verge of closing. “Like the Atlantic Club, Trump Plaza is one of the city’s smallest and oldest gambling halls – it opened May 26, 1984 – and had difficulty competing with the bigger casinos in town and in nearby states, including Pennsylvania.”

But while the creditors will be angry they have other sources of income; one group of people even more furious and with zero recourse are the unions. Bob McDevitt, president of Unite Here Local 54, the union that represents most casino workers, led a Boardwalk rally Wednesday to protest Showboat’s planned closing. McDevitt, who labeled Showboat’s closing “a criminal act” by Caesars Entertainment since the property was still profitable, could not be reached late Friday to comment on the latest casino to fall.

Meanwhile, the city is slowly but surely realizing that its business model is dead.

Whelan, a former Atlantic City mayor, expressed his displeasure Friday night. “I go from depressed and sad to being angry,” he said. “When these casinos close, people lose their jobs and their careers. It’s a very sad situation.”

Employees at Trump Plaza had not been notified Friday of the planned closure, but slot attendant Stan Jelesnianski, who said he has worked there for 21 years, said employees had been worried “for a long time.”

“Business has been slow,” he said.

According to May 2014 monthly revenues from the New Jersey Division of Gaming Enforcement, the latest monthly data available, Trump Plaza ranked last among the 11 casinos in total revenue, making $5.2 million. Of that total, it generated about $4.6 million from slots, down 19.8 percent from May 2013. And it took in $660,666 from table games, a decrease of 45.6 percent from a year ago.

Its year-to-date total casino revenue of $21.9 million was down 26.7 percent from the same period a year ago.

Charles Pinkett, a Boardwalk rolling-chair operator, said the casino has seemed to be on life support for a while. “The people have been talking about how there’s no room service,” he said.

The only good news perhaps is that yet another icon of the Trump “empire” – built entirely on other people’s money and junk bonds – is being dismantled. After this, there is just one more left…

Mark and Alice Aronson, dining outside, said they were surprised and saddened to hear another casino was on the way out. Alice Aronson, a local therapist, said she had clients from Showboat who were dealing with the pain of the likely layoffs.

“It’s a shame,” she said. “This is a good place. I heard Donald Trump is not involved anymore. I thought maybe he’d fight for it. It seems, one by one, they’re not taking care of their employees.”

Trump Plaza’s closing would leave one Trump-brand casino in Atlantic City – the Trump Taj Mahal, between Resorts Casino Atlantic City and the soon-to-close Showboat.

We give the Trump Taj 6-9 months before it too joins its peers in the liquidation docket, and the name Trump will no longer appear on the boardwalk for the first time in over three decades. In the meantime, those curious to track the demolition of the Atlantic City gaming empire in real time, can do so at the New Jersey WARN Notice website.