Through 2020, it is projected that taxpayer-guaranteed student loans will rise from $489 billion in 2009 to $1.68 TRILLION in 2020. According to Mike Shedlock at Mish’s Global Economic Trend Analysis, the program is destroying millions of lives as they struggle with debt they can never repay, as a student and far beyond.
“Since student debt cannot be discharged in bankruptcy, and since universities get paid by the government, the universities (even legitimate ones) do not care how many lives they destroy.
The way to end the madness is to phase out all student loans over the next 3 years, immediately halting all new loans to freshmen. If colleges want to lend directly to students, nothing stops them. However, those debts should not be guaranteed by taxpayers.”
Shedlock warns of unscrupulous “collegiate scams” such as The University of Phoenix. If you are familiar with accounting you will want to read this story to understand how these taxpayer guaranteed loans are hidden from scrutiny, and you will want to know how this question was answered:
“If it’s such a simple accounting identity, would you please reconcile the $1.9 trillion and $1.65 trilliondebt increases in FY 09 and FY 10 with the alleged deficits of $1.4 trillion and $1.3 trillion for the same fiscal years?”
If you are a parent with children planning to secure a student loan, you’ll want to read the story as well, and prepare yourself for the dismal struggle lying in wait for your son or daughter, if government loans are a part of their funding program. Thanks to The Lonely Conservative for this appalling story.