Trillion-Dollar Student Loan Industry to be Bailed Out by Taxpayers

The government’s problem-reaction-solution strategy to buy votes was summed up best by the late libertarian Harry Browne:

“The government is good at one thing. It knows how to break your legs, and then hand you a crutch and say, ‘See if it weren't for the government, you wouldn't be able to walk.’”

The government deliberately causes problems in order to elicit their desired reaction from the public and then offers their “solutions” that will inevitably earn politicians the undeserved trust of naïve voters.

Voters are usually bought with some kind of bailout. It could be a moral bailout as in the case of legalizing abortion, but most of them are financial bailouts. The Democrats own the black vote, much of the elderly vote, the Latino vote and much of the female vote all because of “bailouts” in one form or another that were sold on the premise of a solution to a problem that the government helped create in the first place.

The latest sector to benefit from a taxpayer-subsidized bailout is the taxpayer-subsidized student loan industry. Currently, student loan debt is larger than credit card debt. Collectively, students have racked up nearly $1 trillion in loan debt. And it’s all thanks to government taking over the student loan industry which prompting schools and universities to increase their tuition fees and diminish their own aid programs. Students were fed the promise that a college degree would yield them an additional $1 million in income over their lifetime compared to their high school graduate counterparts, so paying off their loans wouldn’t be all that hard, right? But recent studies show that the number has plummeted to $300,000 in additional income, and the average college graduate enters the workforce with $30,000 of debt. Nowadays, most college graduates don’t have much better jobs than those without college degrees, and the one thing they’re guaranteed to have is a giant loan that they will spend the rest of their life trying to pay off.

Is it really worth it anymore to get a college education when it’s become little more than a racket for the loan industry, the university system and the government that just wants to create another entitlement with which to buy votes?

This scam is the reason for all the internet advertisements and billboards for universities specifically targeting middle-aged people and particularly at-home mothers. “It’s never too late to go back to school,” the ad might read. They don’t care about making sure these people get college educations. They just want them to get a student loan that will pay the over-priced tuition and force them to become debt slaves so that later, when they’re about to commit suicide from all the unpayable debt, the government will swoop down and save them. Then, these students will become indebted to the Democrats if they weren’t already.

This bailout hasn’t happened yet, but it’s being proposed as part of the fiscal cliff negotiations, and I’d be surprised if it didn’t pass. The Student Loan Forgiveness Act provides debt forgiveness to all student loan recipients who have paid 10% of their discretionary incomes toward their loans for 10 years. If the recipients go into teaching, “public service” or medicine in underserved areas, their debts will be forgiven after only 5 years of such payments.

If this becomes the new norm, what incentive will there be for future students to pay off their loans at all? The next step will “free” college education for all.



204 thoughts on “Trillion-Dollar Student Loan Industry to be Bailed Out by Taxpayers

  1. For those who didn't have the opportunity to go to college because of the cost, I'd be so angry right now to know all those other pot heads got to go for free.

    This stinks to high heaven. DO NOT PASS THIS STUPIDITY IDEA

  2. tiredofsocializm says:

    Sorry students of today, I worked days and went to college nights and many of my friends worked nights to go to school in the daytime, so we would not have any student debt... What a concept!!!! Another great concept is only buying a home when you have saved or acquired a 20% down down payment for a mortgage, so if the value drops because of stupid or foollish government policy or regulation you will not be under water. Or how about buying a $25,000.00 Hyundai instead of a $50,000.00 BMW either car will get you where you need to go? What concepts huh, they are called common sense!

    • Devon Sanchez says:

      Your yesterday is not today. The majority of loans offered are only available because of fractional-reserve (centralized) banking with guaranteed insurance of failure to collateralize. The ignorant behavior that follows is consequence of that.

  3. We at least will have the best educated, out of work employees in the world, they can all sit around and discuss their educations as the Country falls apart.

    • Devon Sanchez says:

      Wrong. The majority of education that is taught is insignificant by any intelligible design and most students that graduate do not retain the information preached to them. The only students that have any worth are ones that have education in computer design and programming, engineering (all forms), science and math based curriculum. Oh, and the jobs that will be waiting for these individuals won't be in this country. They are offered in great far-away lands such Hong Kong, Singapore, New Zealand, Australia and mainland China.

  4. Sucker train leaving the station. All aboard! Get $100k in student loans and work for Obamao. He will take off your debt chains. Bye bye USA, hello USSA.

  5. That would be very nice if tax payers would take over the debt. My youngest son is in his 4th year paying off his student loan and will be done in another 2 years, He has never missed a payment, just like millions of other former students who now have good paying jobs. This reminds of the GI bill, except that you have to pay it back. You may not know this with student loans. If a former student does not make his payments every month with interest of course, his wages can be garnisheed. Theses rules apply to like any other loan people make.

  6. This is total unmitigated BS. My daughter went to a school she could afford for her bachelors, in state, and became a Dorm Director to defray expenses. She received her Masters Degree from a university that gave her a scholarship based on performance. She worked for that school too. She then received a scholarship and was the youngest candidate to receive her Doctorate at the University at 28 years old. She is now in the process of developing innovative high technology teaching methods that will change the way we teach in this country. The University where she received her doctorate retained her and as a result of her work the university has received approximately 4 million dollars from private industry for her work. She is now a tenured PHD, and gives lectures all over the country, and soon the world. And she started out in a small, hometown university with very reasonable tuition which she worked off.

    One of my brother-in-laws kids went to a school that they could not afford, but he whined and complained that he wanted to go to so-and so and that they (his parents were supposed to have money for his schooling) so they gave in and paid the first tuition, and dferred all the rest. They are now 250,000.00 in debt for his school loans. (I say they, because parents have to co-sign now)

    So what this will do is once again penalize the people who were frugal, bought within their means, and take their money to pay for the idiots that could not add or subtract, just exactly what happened with the housing industry.

    Not only this, but if this goes through, those same people will say to the fiscally responsible people, "See, our kid went to a better school than yours"

    Not that I think it matters even a little bit where you go, other than the good ole boy network BS

    This is simply atrocious, and shows again that Altruism on the part of big government is EVIL. Ayn Rand is absolutely correct. Everything the federal government touches turns to s**t. If you would simply leave free enterprise alone, everything will work out.

  7. truepatriotintx says:

    Because of this "easy money", tuition rates have skyrocketed! Anytime the government interferes, the market adjusts. In this case, the high-education market adjusted by jacking up their costs. Do you blame them? Guaranteed money means everyone can afford it, right?
    There's no such thing as "working your way through college" any longer. A part-time job and even some full-time jobs do not allow it. It's a vicious cycle created by the government and banks.
    WE THE PEOPLE need to demand an end to the easy money and force tuition rates to come back to market levels. Then people who can afford it or work for it, can attain a college education.
    Next, we'll be reading about suicides and depression from this ridiculous racket!

  8. Make all politicians take a 10% paycut and apply the savings towards the so called fiscal cliff. Problem Solved !

    • Devon Sanchez says:

      How about more like 50% paycut for politicians and their lofty retirement accounts. And then take a 50% current budget cut in EVERY federal department. Then we could better agree on this "balanced debt idea". And no, not a baseline cut from projected budget figures but a real 50% cut to the current figures. The paycut would have to be indefinite and any future pay would be based on the individual's yearly pay from the previously held REAL job (a portion of that figure would be the calculated salary). As I am sure we all want productive members of society, protecting our freedoms. Then you would be on a better PATH to a balanced budget.

      (But, we all know this would never happen and so it is best to position yourself and your family to be financially stable when the collapse comes)

  9. Paid for mine and my kids college. Never asked for a dime....I worked 2 jobs while I was in college and 3 while my kids were in college. If one can't afford kids then they shouldn't have them. I am sick as well of paying for others kids and elders. If the government wants to regulate something why not make folks pay for their own family members stuff! Adopt a no free ride for anyone. I was raised in the house with 2 physically handicapped kids and my parents worked and paid for all their needs and all of us kids had to help and that meant ALL of us. We took care of our own. Don't need a pat on the head for doing what one is suppose to do. We grew up knowing responsibility was something to be shouldered and not shunned.

  10. Chris in Texas says:

    Anyone - and I do mean ANYONE - who has served our country in the military for any length of time and received other than a dishonorable discharge should have their student loan debt wiped clean off the books.

    • Devon Sanchez says:

      Even though I despise war and all its baggage, I do believe that lying to the many individuals that have fought in real combat is a heinous act and that they deserve better. The first action that should have happened many years ago is bidding off the VA Hospital system to willing buyers. They would be in much better care if this had happened. THEN any promises of home loan rate guarantees and student loan rates/free assistance should be honored. Now...forgiving all student debt owed by veterans of military is not an option and should never be considered. If this had any ground, then those who never went to higher education but took on a home loan should have a portion or all of their mortgage debt paid off as well (depending on the circumstance). This doesn't make a lick of sense...

  11. "I'm sorry, but who paid the tab for me or my daughter to go to college?
    I'm tired of paying everyone else's bills while I scrimp and save for

    Ditto ..Cindy!

    Same here!

    I paid for MYSELF ..and then paid for MY daughter..and I'm tired of being expected to pay for everyone else.

  12. Why should any tax payer pay for some ungrateful Communist fools indoctrination?

  13. Bailout can't be a solution. Government doesn't have the capacity to pay for massive student loan and consequently it will become more of a burden for the taxpayers.

  14. And I busted my rear all those years in a sweatshop working as a welder so that when I graduated I owed a whopping $335. Which I repaid.

  15. Why the heck is our government guaranteeing student loans, mortgages, GM and any other business? No more bailouts of anything at anytime. Screw those 'too big to fail."

  16. It's a way to make students servants to the government. Oh you can't pay back your loan? Well just work for us as repayment.

  17. I have no problem with paying off my's the interests and fees that make it difficult, especially when widowed and struggling with maintaining employment. The interest and fees should be removed making it easier for payment.

  18. If the Federal Government is going to bail out the Student Loan Industry, I might as well see about getting back the $5,000.00 that I paid back on my two (2) Student Loans. It's only fair that I should get my Money back that I legitimately paid back. I could use the Money.

  19. The private sector had a big sigh of relief when obama took the college loans off their hands.