Monday, February 7, 2011

$1 Trillion!

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$1 trillion.

You heard me.

I said $1 trillion.

But why is that number significant? 

Mark Kantrowitz recently stated that outstanding student loan debt (federal and private) will eventually hit a staggering $1 trillion. That's our new magic number, but it is certainly not worthy of celebration. So, people, put your damned champagne bottles away for now. This is serious business and stone-cold sobriety is necessary.

As of June 2010, Mr. Kantrowitz stated, "the seasonally adjusted revolving credit totaled $826.5 billion."

Most of you know that figure, the one in the billions. It's fast approaching $1 trillion. My guess is that outstanding student loan debt will surpass the $1 trillion mark.

And yet President Obama made absolutely no mention of the student lending crisis in his last State of the Union Address. I found that remarkably odd, considering how many times he referenced student loan debt in his previous address. In fact, I've added this quote to my email signature: "In the United States of America, no one should go broke because they chose to go to college." 

How inspiring! But this time around, we got nothin' . . .

Now the administration is insisting that we educate more and more people, but they conveniently omit just how these folks will finance all this education that will lead us to a stronger and more innovative future. Future this. Future that. Bullshit talking points if you ask me, but then again President Obama is fast becoming Reagan-right (I stand corrected in asserting that he was simply Right-Right). Moreover, Roberto Rodriguez disappoints me and hundreds and hundreds of my readers. We have sent that guy letter after letter. Correct me if I'm wrong, but isn't it his duty as a public servant to respond to our concerns? I've even talked with him on the phone. He dodged my question about their plans to help current student loan debtors. Then you have Heather Higginbottom delivering the same dried up message, one that demonstrates just how tone deaf these folks in the White House are. Perhaps they're not tone deaf, but rather more concerned about an upcoming election, and are in severe denial about the severity of the situation. I can tell you one thing: they've lost the support of thousands and thousands of indentured educated citizens.

It is a funny thing, isn't it? President Obama fails to honestly discuss the fact that student loan debt is nearing $1 trillion. You know what that means when it comes to the increase in default rates? It's devastating. Just imagine the toll that that this debt is taking. Think of the families who have been ruined. Think of the families who will be ruined. Then think of how reckless the administration is being for suggesting that people take on more debt to go to school. But I don't have to tell you what this is doing to people, because most of you are the ones being ground into the dirt, and face first.

Here's another funny thing. Why the f--k aren't mainstream media outlets discussing this number? Is it not newsworthy? You tell me. I dunno. Maybe $1 trillion in outstanding debt is no biggie.



After I told Mr. Dollar our magic number, he said, "You gotta be f---in' sh--tin' me! One f--in' trillion of me!"

16 comments:

Nando said...

http://www.finaid.org/loans/studentloandebtclock.phtml

According to this graph, student loan debt has exceeded $887,608,550,078. Yes, $887 billion. If I remember correctly, it stood at $826 billion in June 2010.

But Obama the Empty Suit thinks that we can outwork, out-innovate and out-educate the rest of the world. True, companies *say* they want an educated workforce - but they want to pay them $9, $10 or $12 an hour.

How in the hell are people with $60K, $75K, or $130K supposed to make ends meet on such paltry wages?! This is a nation of bubbles. We have a ton of systemic problems. Thanks largely to a piece of garbage named Ronald Reagan, we became the world's biggest debtor nation. (Yet, many continue to deify this moron.)

Mark said...

I'm writing in Dalord Humongous for President. At least he would mete out justice to the bankers.Why the media don't report the 1 trillion in student loans? Maybe the media and the government are in cahoots with each other. Maybe the journalists feel bad about exposing the same university industrial complex they came from.

Anonymous said...

"Then think of how reckless the administration is being for suggesting that people take on more debt to go to school."

I distinctly recall a time when Alan Greenspan was making public statements suggesting that people should take out adjustable rate mortgages ("ARM") for financing homes. When I heard this I couldn't believe that the highest financial guru in the government was actually advocating that the sheeple take on this type of mortgage. The above statement pretty much suggests the same degree of recklessness. More education is not the answer. Throwing more money at something isn't always the right thing to do - Exhibit A: See Public School System in U.S. Bottom line is "someone" is getting rich off of these student loans and they are praying on the eternal optimism of the goold ol' USA - where everyone is a GD optimist. Can't happen here you say? Just wait, maybe open your damn eyes instead of watching Fox News.

Anonymous said...

I think that part of the reason that there is no coverage of this issue is that young people don't vote in high enough numbers. They also don't have a lot of money to donate to campaigns the way that people who are established, shall I say, do. If we can get the vast majority of young people voting then I think this would be something taken care of quickly.

Liz said...

I'd like to see some attention paid to the role the senate has in this mess - seriously some senators, cough BEN NELSON, have done everything but announce that they consider it a personal charge to transfer as much money to the banks as possible.

It's amazing, but no one seems to catch on that the biggest problems are happening in the Senate. And some legislators like Sherrod Brown and Al Franken have tried to pull out some student-friendly legislation, but they get no support from the other Dems.

C. Cryn Johannsen said...

Rest assured, Liz, I have taken Ben Nelson and others to task. (I presume you saw my piece about Rep. Foxx, too?)

Also, I give credit where credit is due. For instance, I have praised Sen. Harkin on several occasions. I am in touch with his office, just as I am in touch with Sherrod Brown's. I have developed good relationships with their staffers. Jack Reed is another one.

Liz said...

I love Harkin. He has had some great one-liners on this topic.

Anonymous said...

Ask the Egyptians if higher education is the solution.

Dr. V said...

C. Cryn Johannsen said...
Rest assured, Liz, I have taken Ben Nelson and others to task. (I presume you saw my piece about Rep. Foxx, too?)

Also, I give credit where credit is due. For instance, I have praised Sen. Harkin on several occasions. I am in touch with his office, just as I am in touch with Sherrod Brown's. I have developed good relationships with their staffers. Jack Reed is another one.

Cryn, if you have access to these people, ask them to lobby for legislation that get rid of the interest at least on the student loans; and, work for paying only the principal.
Showing is better than telling, maybe if we could put together a design that shows how much money they are really losing by placing their citizens in such high debt, such as with student loans. Have you tried such an approach? Verta

Joe Markowitz said...

That really doesn't sound all that alarming to me. We are a country of over 300 million people. So a trillion dollars is only about $3000 bucks apiece, or probably less than we owe on our credit cards. That means that even if every single student loan went into default, we could easily pay off this debt. Proportionately it seems like less than other countries pay to finance college education for their citizens.

C. Cryn Johannsen said...

Mr. Markowitz, you are wrong in assuming that $1 trillion is less than what we owe in credit card debt. For the first time, outstanding student loan debt has surpassed that of credit card debt.

Nando said...

Joe,

http://blogs.wsj.com/economics/2010/08/09/student-loan-debt-surpasses-credit-cards/

According to the conservative Wall Street Journal, student loans surpassed credit card debt back on June 2010. One might expect a trial attorney who follows Forbes to be on the ball, about this issue. At a minimum, you should have your facts straight before sounding off on this subject.

http://www.vanityfair.com/politics/features/2008/04/stiglitz200804

By your logic, Joseph Stiglitz shouldn't make a big deal out of the $3 trillion Iraq war. After all, that's only about $9,000 per capita. That is less than the cost of a used car.

http://usliberals.about.com/od/socialsecurity/a/SocSecReform.htm

Remember when Idiot George wanted to privatize Social Security, in 2005? Even Republicans were indignant, as George himself estimated that it would cost about $2 trillion - in initial costs - to privatize the system. Applying your reasoning above, the GOP should not have balked at the idea.

What world do you live in, where $1 trillion is no big deal?!?! I suppose if student debt doesn't directly affect you, then it is not urgent.

JPR said...

Markowitz writes: "That means that even if every single student loan went into default, we could easily pay off this debt."

Am I missing something here? Who is the 'we' who could so easily pay this off? Are, say, the corporate and/or government sectors just going to voluntarily step up and 'adopt a defaulter' and pay off their debt?

No solution exists. Only enablers, and an entire swathe of our once prosperous society is being made into an indentured, disenfranchised class.
So I repeat - a 'strategic' DEFAULT EN MASSE is what we all need to do to collapse this rigged, unfixable system, and rebuild from there.

JPR

Anonymous said...

Joe: Stick to whatever it is that you do, because you clearly have no idea about how financial markets have been operating.

Anonymous said...

I want to know what are other college graduates are doing to pay-off these loans. I am so much in debt with these loans and I have no idea how the hell I am going to pay them off. I know so many other people are in the same boat! So what are you doing? Not paying them off and letting it affect your credit rate? Letting it affect the ability of you even getting a job in the first place? I am just so lost in a sea of debt because of my education and I can't get a job to save my life!

C. Cryn Johannsen said...

@Anonymous May 1, 2011 3:28 - those are very good questions. I have said so many times, "I can't get a job to save my life," and so it is comforting to hear it from someone else. It's beyond frustrating, isn't it? And who the heck is concerned about the jobless? Have we been forgotten? One has to wonder. I recently wrote a post, asking people to share about paying off their debt. I've received one response so far, i.e., one that is from a person who has paid off their debt. I'll share it soon. Have you graduated yet? Have you heard of the Briefcase Brigades? Do you want to get involved? If so, feel free to write to me (ccrynjohannsen@gmail.com). In the very least, we can continue to vent.