An Offer: Student Loans Redux

In February, 2013 Transamerica Credit bureau reported the dire statistics in cold red ink. The Federal student-loan delinquencies rose 27% from 2007 to 2012. And I say this tongue-in-cheek, what a surprise that Private student-loan delinquencies dropped 2%?  Why? 

Well, it's for the same exact reason that Fannie Mae and Freddie Mac sustained mortgage delinquencies and suffered home loan failures, giving away money to unqualified borrowers under very liberal Federal lending guidelines to spread the "dream of home ownership to all citizens regardless of credit worthiness". 

Obama blessing college onto the masses.Is now the "dream of a college degree to all students regardless of academic worthiness" on everyone's mind too?  If so, get ready for a bigger economic downturn. The student-loan repayments are  headed for major defaults. So now, the Degree on diplomas will be called a Duh-gree.  

Recent laws now allow the Federal Direct Loan Program borrowers to sign up for student-loans they can't pay back, it doesn't ask them to and they can also delay or avoid payments entirely. So what can these loan delinquencies possibly cost taxpayers every year? The independent Congressional Budget Office, CBO, released annual budget outlook stating, "The student-loan delinquency cost is $104 billion more than the projected budget in 2013 and trends continue over the next ten years."

Looking beyond this dire forecast there is a silver lining in the clouds. According to Vince Sampson, President, Education Finance Council, Washington DC, "The private sector and capital markets stand ready for a new public-private student-loan program that takes the risk off the backs of taxpayers, the unsustainable and growing debt from the federal government's balance sheet and create safer and more affordable loans for students."

The #1 underlying truth in the United States that no one mentions? - Some people are Not now, Not in the future, Not ever going to college. Is that bad? - Witness drop outs like Bill Gates, Steve Jobs, Mark Zuckerberg, Thomas Edison, Henry Ford and the list goes on throughout our history in all different times. The point is that college has become overly politicized and handed up as the Holy Grail, a highly sought after goal that all people must have to be whole just like being a homeowner. Oh Really?

It's time to offer other courses to educate and train people: How to manage businesses or to be factory workers, field technicians and skilled personnel in trades and professional fields. Stop the college nonsense and get the middle class going forward into their real future. Concurrently we need to accelerate results and reduce costs by restricting Federal intervention into school programs on all levels, offer school vouchers, mandate teacher evaluations for performance and restrain teacher unions' powerful hold on local public school administrations and policies.  Let's fill classroom seats with students learning practical skills to earn a living instead of crowding jail cells full with prisoners.