piezoe some very thoughtful comments. I actually support Obama but don't feel he or congress has done enough to reign in the egregious and greedy "Private" schools that charge $24K to be a medical transcriber or work in a medical office...$12 to learn to be a masseuse..etc. Yes, so many people are taken by false advertisement and downright lies and they share blame but these special interest are really getting a pass IMO by every administration, congress and the states . Learning a trade is valuable but Community colleges and voc edu are the place for that and not high priced on line "Colleges".
You hit this right on the nose. I've taught for these "for profits," and you simply would not believe what goes on to get people in the door and keep them there. This is the definition of moral hazard: loans paid to the school directly, and the school shoulders none of the burden if students default. These for-profits represent 10% of the post-secondary education population, and - are you ready? - 50% of the defaults.
I have never had anything directly to do with folks running these for profit "educational" institutions. But I knew a very bright chap who had a masters degree in English who was briefly on the faculty of one of these for profit "Colleges" you speak of. Everything he told me confirms what you have said about these "schools" that are apparently only there to rip off various federal programs. His tales of this operation are eye opening, to say the least. They would accept any student, no matter how deficient, help them tie into the federal student assistance programs, even though many of these particular students were border line literate and had virtually no chance of securing a job in their chosen field. I was left with the impression that the only reason for existence of these institutions was to tap into federal money.
More specifically... Finance is not taught in school because the politicos have a vested interest in the hol polloi remaining financially ignorant.
student loans are not dis-chargeable via bk... your suggestion seems to be a possible way around it. How many unemployed students are going to have sufficient lines of credit to pay off their student loan debt? Realistically 100K in loans... Maybe they should hit freddy and fanny with no money down mortgages. take out second and 3rd mortgages too... Then do a bk... might be the new graduation party for this generation.
Student loans which can't be repaid.. just another "redistribution of wealth". Yeah, I know.... student loan debts "can't" be discharged through BK... Wanna bet the government/Democrats don't find a way to heap that obligation onto the ones who pay taxes, anyway?
Of course. Every stealth monetization effort is another obligation heaped upon the taxpayer. ZIRP is just another transference of the accumulated savings of the responsible to try and "stimulate" the umpteenth round of refi's and teaser rates for "homeowners". The list is literally endless, but it doesn't take genius to see the where and how of an increased cost of living AND a lowered standard of living.