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Us Students Drowning In Debt

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I just saw this on RT news and found it on the website, it shows how screwed students in the US are.

http://rt.com/Top_News/2010-09-04/us-students-drowning-debt.html

The video report is also on their page to save you reading it but it won't let me add the flash video to the post :(

A ticking time bomb of American debt. Over $830 billion are owed by college students in the US with $3 thousand more added on every second.

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The most traditional financial baggage for Americans was credit card debt. For the first time, debt belonging to college students has over taken that number one spot.

Economist Max Wolff said, “Students graduating in 2008, 2009 and 2010 are facing the worst job markets in a generation at least. And so you have people with more debt that we have ever seen before, who are having a harder time finding any job, let alone a job that pays them enough to somehow pay off all this debt.”

29-year-old Shana Falb is haunted by major money problems.

If she continues at the loan rate she entered her first year, by the time she is finished with school, she will have about $120,000 worth of debt, just from school loans.

What Falb earns now is barely enough to survive on a day to day basis, let alone pay back her loans.

“The money that comes from the internship is, like I said, very little. It doesn’t pay for much. It could pay for a dinner, or two,” she said.

The combination of a lack of jobs and growing debt has never been as tight for graduates.

At some US universities, students have been borrowing 70 percent more money in the last year.

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RT contributor Danny Schechter told RT, “Universities are actually cutting deals with the student loan companies and making money on the side. There has been a lawsuit in New York – a million dollar fine – against Columbia University for steering people to expensive loans. The danger here is that instead of capitalism we end up with serfdom, because these students are indebted for life”.

Dennis House lives in a basement in Queens, NY with two roommates, he argued, “Your loan that you are paying back shouldn’t cost you as must as it costs to live in a home. What they’re doing is completely lowering the standards of living for an entire generation of people who couldn’t help it in any way”.

Just months after graduation, he said he receives calls four times a day.

“They’re terrible. They’re the biggest loan sharks in the world right now. If you’re late on a payment, they’ll harass you,” he added.

This harassing will never go away – college debt owners cannot eliminate their debt by filing for bankruptcy.

Max Fraad Wolff explained, “Your housing debt, your car debt, your credit card debt – if you go bankrupt, it gets wiped away. You literally cannot get out of your student debt. If you decide you can’t pay it – too bad. Student loan debt is special and it’s specially sticky and hard to get rid of”.

Moreover, when your credit score falls, getting a job becomes even harder as many companies check these numbers during hiring.

Outside a major loan corporation, journalist Joe Weisenthal said youth are often pressured into taking on commitments they cannot afford without even realizing it.

“There is an incredible amount of propaganda regarding student loans and education in general. How many times have you heard the phrase ‘education is the best investment you can make’,” said Weisenthal.

But unless a dramatic turnaround in the system takes place, that statement may soon become obsolete.

Ever since the economic crisis began in the US, the debate of how it started and how to define what is rages on. But in the meantime, a generation that is supposed to be the driving force for the country is stuck – jobless and indebted.

Edited by Pauly_Boy

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Makes you wonder where they can go next in terms of stimulating fake economic growth through debt, scraping the bottom of the barrel already. UK jas the same disease - notice the similarity in the rules making the debt sticky preventing bankruptcy from being used. You can just leave the country permanently and stick two fingers up at your economic inheritance.

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The figures involved in US student debt - hundreds of thousands of $s - are absolutely mind blowing.

Makes ours look like good value in comparison.

I predict that even in America will be looking back on that situation and thinking 'what the fook were we doing?' Astounding.

It must be really tempting for bright graduates to bin off the US for another country, despite what the Ayatollah said yesterday about not being able to return.

Edited by Kyoto

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Coming soon to this country. I left with £6K in debt and with the regular repayments it took me until my 30's to pay it back...

These products are pushed onto you as "the expected" thing to do. I was even told they were interest-free loans (inflation only) - it sure didn't look that way when the annual statement came through years later !

Seems £25k is "the norm" now - but if everyone around you is doing it, what could be wrong ???

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Coming soon to this country. I left with £6K in debt and with the regular repayments it took me until my 30's to pay it back...

These products are pushed onto you as "the expected" thing to do. I was even told they were interest-free loans (inflation only) - it sure didn't look that way when the annual statement came through years later !

Seems £25k is "the norm" now - but if everyone around you is doing it, what could be wrong ???

It has become a requirement to take on debt as soon as you reach eighteen. I am going to go to the doctor and get signed off for incapacity benefit.

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I've heard from bankers that so many young people are already deep in debt with low income that they can't lend money to them for mortgages. In addition huge numbers of other young people already have many missed payments or things like credit card debt that has gone to collection that their credit score is wrecked. So again they cannot get mortgages.

Another issue is the rabid credentialization.. where most jobs you used to be able to learn on the job, now you are not legally allowed to do even the basic things without the right credentials and those take years of school. So young people come out with skills not needed, but cannot just jump into fields where skills are needed. Beyond just being stupidly wasteful in society, and damaging to the young persons standard of living.. it means yet more cannot make any income so will never get a mortgage.

You see in some US cities where real estate has dropped in price 40 or 50% they still can't find people to lend to to buy these things.

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I've heard from bankers that so many young people are already deep in debt with low income that they can't lend money to them for mortgages. In addition huge numbers of other young people already have many missed payments or things like credit card debt that has gone to collection that their credit score is wrecked. So again they cannot get mortgages.

Another issue is the rabid credentialization.. where most jobs you used to be able to learn on the job, now you are not legally allowed to do even the basic things without the right credentials and those take years of school. So young people come out with skills not needed, but cannot just jump into fields where skills are needed. Beyond just being stupidly wasteful in society, and damaging to the young persons standard of living.. it means yet more cannot make any income so will never get a mortgage.

You see in some US cities where real estate has dropped in price 40 or 50% they still can't find people to lend to to buy these things.

It will not stop until the parasites have killed the host. Shameful really.

I might be too late, but after twenty years of paying tax, and having abortions, I need to play the system.

Edited by Tonkers

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It must be really tempting for bright graduates to bin off the US for another country, despite what the Ayatollah said yesterday about not being able to return.

The laws enabling creditors to apply for a court order to have a debtor's passport seized only exist in some states (though sadly, the one relevant to my situation is one of them). A related problem is that developed countries, and especially the English-speaking ones, are rapidly tightening up their immigration controls for skilled workers. I can't say I feel too sorry for the US over this one, as they have what are probably the toughest immigration and naturalisation laws on the planet for skilled workers coming in from outside. But whereas a decade ago, a US graduate would probably have had little problem emigrating to here, Australia or NZ, they now face a points-based immigration test, and all three countries are talking about tightening the criteria. AFAIK, Canada is the only English-speaking country to which US citizens can go as economic migrants more or less without restriction.

What I don't know is how the credit scoring thing works. If your credit rating is buggered in one country, does that automatically extend to another? Do credit rating agencies in different countries share information with each other?

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I've heard from bankers that so many young people are already deep in debt with low income that they can't lend money to them for mortgages. In addition huge numbers of other young people already have many missed payments or things like credit card debt that has gone to collection that their credit score is wrecked. So again they cannot get mortgages.

Another issue is the rabid credentialization.. where most jobs you used to be able to learn on the job, now you are not legally allowed to do even the basic things without the right credentials and those take years of school. So young people come out with skills not needed, but cannot just jump into fields where skills are needed. Beyond just being stupidly wasteful in society, and damaging to the young persons standard of living.. it means yet more cannot make any income so will never get a mortgage.

You see in some US cities where real estate has dropped in price 40 or 50% they still can't find people to lend to to buy these things.

you need a masters to be a van driver these days.

the right Calibre.

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$120k of debt just for an education. It's insane.

Still at least it's sustainable.

An education that doesn't get you a job. Mugs.

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Coming soon to this country. I left with £6K in debt and with the regular repayments it took me until my 30's to pay it back...

These products are pushed onto you as "the expected" thing to do. I was even told they were interest-free loans (inflation only) - it sure didn't look that way when the annual statement came through years later !

Seems £25k is "the norm" now - but if everyone around you is doing it, what could be wrong ???

as a foreign student with a scolarship at the University of Reading in 2001, I was absolutely gobsmacked when one of my part-time work colleagues, himself at uni in his last year, mentioned he was 15k in debt. That's when I started to understand the nature of the Anglo-Saxon debt-based economy

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Makes you wonder where they can go next in terms of stimulating fake economic growth through debt, scraping the bottom of the barrel already. UK jas the same disease - notice the similarity in the rules making the debt sticky preventing bankruptcy from being used. You can just leave the country permanently and stick two fingers up at your economic inheritance.

Bear in mind that when the whole tuition fees/student loans thing first came up, the only reason that the current system was adopted was that it allowed the financial 'services' industry to get stuck in.

It really is a disgrace; blatant class warfare. No matter how hard a kid from a poorer background works, many professions will be closed off because of the debt mountain they will have on graduation combined with the 'internship' system.

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The laws enabling creditors to apply for a court order to have a debtor's passport seized only exist in some states (though sadly, the one relevant to my situation is one of them). A related problem is that developed countries, and especially the English-speaking ones, are rapidly tightening up their immigration controls for skilled workers. I can't say I feel too sorry for the US over this one, as they have what are probably the toughest immigration and naturalisation laws on the planet for skilled workers coming in from outside. But whereas a decade ago, a US graduate would probably have had little problem emigrating to here, Australia or NZ, they now face a points-based immigration test, and all three countries are talking about tightening the criteria. AFAIK, Canada is the only English-speaking country to which US citizens can go as economic migrants more or less without restriction.

What I don't know is how the credit scoring thing works. If your credit rating is buggered in one country, does that automatically extend to another? Do credit rating agencies in different countries share information with each other?

Good/Bad credit in one country doesn't follow you to another. US credit scores are all tracked through US Social Security numbers. As no one has heard of such a thing anywhere else (generally speaking), there's no easy way to create a credit history spanning the US and another country.

US student debt is a compete scam. My brother in the US took out massive loans to get a masters degree in philosophy (great investment, that) and is now unable to get any legal job in the US without the bank seizing his paycheck. He's been taking turns teaching English in Saudi Arabia or Latin America and spending months at a time living with my parents at home doing nothing. As the debt can never be written off, he'll never get a real job, ever. It's ridiculous.

Student debt, like sub-prime mortgages, have just been a way for Americans to think that they're standard of living is higher than it really is. Much of the debt has nothing to do with an actual education. I have three nephews who have been attending "art college" in the US for the past few years, studying to become "video game testers", all funded by student loans (and making a bundle of cash for the company running the school). They don't actually go to class -- they've spent the past couple years smoking pot and playing video games, as attested by their postings on Facebook. These kids are and will be completely unemployable, with no way of making a legitimate living.

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I've heard from bankers that so many young people are already deep in debt with low income that they can't lend money to them for mortgages. In addition huge numbers of other young people already have many missed payments or things like credit card debt that has gone to collection that their credit score is wrecked. So again they cannot get mortgages.

Another issue is the rabid credentialization.. where most jobs you used to be able to learn on the job, now you are not legally allowed to do even the basic things without the right credentials and those take years of school. So young people come out with skills not needed, but cannot just jump into fields where skills are needed. Beyond just being stupidly wasteful in society, and damaging to the young persons standard of living.. it means yet more cannot make any income so will never get a mortgage.

You see in some US cities where real estate has dropped in price 40 or 50% they still can't find people to lend to to buy these things.

aa3,

a brilliant post.

What it highlights is the affect of global wage arbitrage. Higher paying jobs can be moved to lower wage countries, so they have been moved. Younger people now have to accept lower wages, or go on to benefits, they are often choosing the latter.

This wouldnt be so bad if the pain was felt equally. But the state sector, both public sector jobs and benefits, have ratcheted up to a level, but have not declined back with the private sector incomes. The result of this is more people choosing benefits over work, who can blame them, and a public sector that is unaffordable.

What we should be doing is cutting benefits and public sector pay, to bring everything back into line, either that or deliberately causing inflation, and leaving nomincal pay rates in the public sector at the same level. Trouble is all sorts of laws ratchet up those pay scales and benefits in line with inflation. I suspect that without huge numbers of immigrants willing to work for near to minimum wage levels, our economy would have collapsed by now.

It cant go on much longer though. The deficit is huge, and so far the ConDems have done nothing to make it smaller. Indeed the only promise I can recall is that one to line pension increases to the RPI, 2 1/2% or average wage increase, something akin to Brownian economic policy with its stupidness.

For a while, this is going to mean that we increasingly exploit our young people, who have little in the way of rights as they are outvoted by the boomers. The only hope of fairness and redemption, appears not to lie with the ConDems ditheringly moving towards a reformation of our state sector, but by a full blown bond crisis bringing expenditure and taxation into alignment.

The sooner that happens, the better.

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Bear in mind that when the whole tuition fees/student loans thing first came up, the only reason that the current system was adopted was that it allowed the financial 'services' industry to get stuck in.

It really is a disgrace; blatant class warfare. No matter how hard a kid from a poorer background works, many professions will be closed off because of the debt mountain they will have on graduation combined with the 'internship' system.

not only that, but increasing the number of students meant that jobless figures would be massaged...thats 300,000 per year, thats about 900,000 LESS people in the unemployment figures.....and how were they paid for....the ultimate PFI....Pay for yourself...with a loan to yourself.

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An education that doesn't get you a job. Mugs.

When this debt crisis started I argued with my American Missus about this and education fees in general. She told me that I really didn't know what I was talking about and that fees on education are never wasted. I really do want to slap this atricle in her brainwashed face but she would hit me.

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I've heard from bankers that so many young people are already deep in debt with low income that they can't lend money to them for mortgages. In addition huge numbers of other young people already have many missed payments or things like credit card debt that has gone to collection that their credit score is wrecked. So again they cannot get mortgages.

[color=#0000FF]Another issue is the rabid credentialization.. where most jobs you used to be able to learn on the job, now you are not legally allowed to do even the basic things without the right credentials and those take years of school. So young people come out with skills not needed, but cannot just jump into fields where skills are needed. Beyond just being stupidly wasteful in society, and damaging to the young persons standard of living.. [/color]it means yet more cannot make any income so will never get a mortgage.

You see in some US cities where real estate has dropped in price 40 or 50% they still can't find people to lend to to buy these things.

This is so true! Why on earth are we so obsessed with paper qualifications for jobs which could be best 'learnt on the job'. There should be far more of that, starting on a low wage, than borrowing £25k to go to Uni for adegree an employer has no real use for!!! The false target of being proud to have '50% of our young people' going to Uni is not actually helping those who then pass unwanted degrees!

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I've heard from bankers that so many young people are already deep in debt with low income that they can't lend money to them for mortgages. In addition huge numbers of other young people already have many missed payments or things like credit card debt that has gone to collection that their credit score is wrecked. So again they cannot get mortgages.

Seems very true - this on MSE:

"My husband and I are first time buyers. We had an agreement in principle with Nationwide, offered for a house and the buying process began. We put in our application for a mortgage (through a broker) and have now been told that in order to have a mortgage we must pay off my husband's student loan. He began uni in 2001 and owes around the £14,000 mark. I thought that this was not a "real" debt and would not be taken into account!!

We do not have the money to enable us to pay it off. The broker has suggested that we can get around this by writing a letter to the bank stating our intent to pay off the student loan after completion and show them a bank statement for an account that we have £14,000 in (and get this money by borrowing it from family). Then don't actually pay off the student loan and give the money back to our family. He says this is acceptable and only a "little white lie".

I'm not sure I feel comfortable with this advice. Is he right? And crucially, is there any other way around our problem?"

Edited by mikthe20

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<br />I've heard from bankers that so many young people are already deep in debt with low income that they can't lend money to them for mortgages. In addition huge numbers of other young people already have many missed payments or things like credit card debt that has gone to collection that their credit score is wrecked. So again they cannot get mortgages.<br /><br />Another issue is the rabid credentialization.. where most jobs you used to be able to learn on the job, now you are not legally allowed to do even the basic things without the right credentials and those take years of school. So young people come out with skills not needed, but cannot just jump into fields where skills are needed. Beyond just being stupidly wasteful in society, and damaging to the young persons standard of living.. it means yet more cannot make any income so will never get a mortgage.<br /><br />You see in some US cities where real estate has dropped in price 40 or 50% they still can't find people to lend to to buy these things.<br />

Great fun isn't it?

The Bankers/Financials lording over people/us with Bankrupt Banks that would fail their own 'credit score' checks!

Their whole credit check system is imploding and blowing up in their faces again!

Professional 'degree' classes can't get a piDDly loan anymore - let alone a mortgage.

In not too distant future, who are the arrogant fekkers going to have left to lend to?

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<br />aa3,<br /><br />a brilliant post.<br /><br />What it highlights is the affect of global wage arbitrage. Higher paying jobs can be moved to lower wage countries, so they have been moved. Younger people now have to accept lower wages, or go on to benefits, they are often choosing the latter.<br /><br />This wouldnt be so bad if the pain was felt equally. But the state sector, both public sector jobs and benefits, have ratcheted up to a level, but have not declined back with the private sector incomes. The result of this is more people choosing benefits over work, who can blame them, and a public sector that is unaffordable.<br /><br />What we should be doing is cutting benefits and public sector pay, to bring everything back into line, either that or deliberately causing inflation, and leaving nomincal pay rates in the public sector at the same level. Trouble is all sorts of laws ratchet up those pay scales and benefits in line with inflation. I suspect that without huge numbers of immigrants willing to work for near to minimum wage levels, our economy would have collapsed by now.<br /><br />It cant go on much longer though. The deficit is huge, and so far the ConDems have done nothing to make it smaller. Indeed the only promise I can recall is that one to line pension increases to the RPI, 2 1/2% or average wage increase, something akin to Brownian economic policy with its stupidness.<br /><br />For a while, this is going to mean that we increasingly exploit our young people, who have little in the way of rights as they are outvoted by the boomers. The only hope of fairness and redemption, appears not to lie with the ConDems ditheringly moving towards a reformation of our state sector, but by a full blown bond crisis bringing expenditure and taxation into alignment.<br /><br />The sooner that happens, the better.<br />

leicestersq said:

What we should be doing is cutting benefits and public sector pay, to bring everything back into line, either that or deliberately causing inflation, and leaving nomincal pay rates in the public sector at the same level. Trouble is all sorts of laws ratchet up those pay scales and benefits in line with inflation. I suspect that without huge numbers of immigrants willing to work for near to minimum wage levels, our economy would have collapsed by now.

You don't even live in the UK - DO YOU?

When are going back to your other job - as an even more clueless Himalayan Yeti?

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leicestersq said:

You don't even live in the UK - DO YOU?

When are going back to your other job - as an even more clueless Himalayan Yeti?

erranta,

do you disagree with my post? Please say what you disagree with, and why. A debate is much more interesting than calling people Yeti's.

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  • 261 Brexit, House prices and Summer 2020

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