Thursday, May 10, 2012

No Need To Hide The Truth: We Don't CARE If People Default

They don't beat around the bush when they're talking to a particular audience. Today Bloomberg published an article, "Discount ABS May Benefit From Student Defaults, Citigroup Says," stating, "Discounted asset-backed securities tied to government-guaranteed student loans could benefit from defaults, according to Citigroup Inc. (C)."

When they talk about government-guaranteed student loans, they are referring to the Federal Family  Education Loan Program (FFEL). FFEL is no longer in existence, thanks to the Obama administration, but there is still billions and billions of dollars worth of outstanding loans through the program.

Does this mean we'll see an acceleration of defaults, because this will help investors?

Great system we have here, you know? They are openly talking about the benefits of people defaulting.


Anonymous said...

No different than subprime mortgages then. I'm not surprised. And I'm disgusted at the same time. Time for an organized student loan debtors strike, maybe?

Anonymous said...

What are the chances that the government is actually going to do something to help us, especially with all of the attention that this scam is receiving as of late?

Anonymous said...

For several years, I have thought about killing myself because of my crushing student loan debt. Well, after destroying my resume in exchange for financial freedom by steadily working a dead-end job that will ruin any chance I have of getting a job in my field, I finally paid my student loans off last January. I thought life would get better, but it hasn't. I am still in mental angony daily at my job, and it is to the point, where I would rather be dead than keep doing what I am doing just to get a paycheck. I have almost quit many times, but then I would just end up with the same kind of job at a different place.

Every day is a blur; things that happened years ago, seem like they just happened yesterday because I just get up and go through the motions like a brain-dead zombie that sits, reads email, clicks, and silently cries. I am so proud of how disciplined, creative, and hardworking I have been these past years to get out of student loan debt hell, and I so admire how you help those struggling with debt. But let me warn everyone - especially you in-debt lawyers out there - it doesn't get better after you're out of debt. The anger, humiliation, shame, rage, and disgust does not go away, no matter how hard you try. And working an easy job that doesn't pay much doesn't pay the bills, either, so you've got to keep doing doc review or administrative work (or something similar, if you can get it).

I don't know why today was so hard but the thought of having to go to my depressing job tomorrow, where I'm treated like a moron on daily basis, by people with less education than me, really got me down. It was so bad that when I came home, I shut the garage door with the car still running and let it run for about 10 minutes. As the car ran, I felt this amazing sense of relief, that I would never have to endure being looked down upon again or talked down to again or made to feel like nothing more than some micro-managers lackey when I worked hard in law school, graduated in the top of my class, and worked even harder after school and put up with even more to get my freedom back. But then I thought about my poor spouse coming home and finding me, and I just couldn't do it. I'm not sure what the point of this comment is - just wanted to let people know that maybe student loan debt isn't the sole issue so much as a lack of good jobs for the indentured educated class. I thought my life would be wonderful once my loans were paid, but I'm still so sad. I just want the pain to go away. Thanks for listening, and I do know how blessed I am, to be out of debt and to have a fairly decent paying job that allows me to pay for health insurance, food, gas, etc. I have tried so hard to like my job, but I just don't. It is not what I wanted to do and being treated like an imbecile every day doesn't help. I know I should just quit, but I want the money. I have lost so much financially.

JD Painter said...

@ May10, 6:02PM

You touched on a few topics that I can really identify with.

I tried to express the humiliation of underemployment in my Allstate Interview Story. It is on my blog.

And I am trying to save up some money for Health Insurance, which I have been without since last Fall because I couldn't afford the year end double premium payment.

Not having health insurance is pretty scary.

But I would suggest you try to find a work enviornment where you will be happier.

Although I have worked in some bad work enviornments, it doesn't always have to be that way.

A company is like a little Island or Country, where the management, if they are not nice people, will surround themselves with people much like themselves. It is human nature. Call it water seeking its own level, and I have learned that education does not necessarily endow a person with virtue either.

The very darkest and despairing thoughts I think come from the whole combination of factors including the debt, the negative work atmosphere, the feelings of isolation with the debt etc.

A support group goes a long way towards pulling the mind out of the depths of depression.

And that is what these blogs are in a sense: A place where there is suppport and where one can find others who identify.

The Declaration of Independence had the words: "Life, Liberty, and the Pursuit of Happiness"

And placing people in debt for life with no bankruptcy protections is counter to all that and just plain wrong.

Nando said...

This truly is a sign of a morally decaying society. But we already knew that, about this country. It still disgusts me.

Anonymous said...

I'm working with DW-TV in Washington D.C. We are looking for students in the DC area who have a lot of student debt and who are struggling to find a job! If this sounds like you and you wouldn't mind doing an on camera interview, let me know!

Anonymous said...


I am in DC and have a lot of debt. What are the details? For certain reasons, I have to be very careful in regard to disclosing my identity (I can explain more in a private communication). What is your contact information? Depending on the requirements, I may be able to share my story with you.

Demosthenes of America said...

Also, wasn't this the express plot of the villain in the movie Casino Royale? Bet on catastrophe?

Anonymous said...


Defaults do indeed help the lenders. This is assuming that payments resume AT SOME POINT.

Shortly after graduating from law skool, I defaulted on my loans.

I stayed out of the system for years, six or seven.

I finally got my life turned around and wanted to start paying on my student loans. I was told I needed to pay $1,600 a month for a year in a timely fashion. If I could do this, I would be "rehabilitated".

I did this, and was "rehabilitated" shortly after my twelve payments.

My monthly payment went down a few hundred dollars.

A few years after that, I was looking at my outstanding balance. It was not right. I called and went round and round with various reps. I finally got to the bottom of it.

My first 12 payments were "penalty" payments, and did not count towards any interest OR principal.

For if you default, the lender can tack on as much as 20% of the loan balance in fees. If you have 100K in loans, that is about $20k in fees.

WOW! I wish I had known that up front.

That really does not seem right or ethical, as student loans are not dischargeable in bankruptcy. They can also garnish your wages and social security.

This is not right!

Anonymous said...

You can email me at if your are a student in the D.C. area who is in debt and struggling to find a job. Thanks!