- Personal Finance»
- Mortgages & Loans
Student Loans are a Bad Idea
Recently President Obama signed an executive order into law providing for a student loan debt forgiveness system whereby the amount a person would have to pay would be no more than 10% of their income and if the loan is not paid within 20 years it would be forgiven. This benefits people who take out large student loans more than those that take out smaller amounts. Consequently, the question of whether we should “forgive” student loans was put to me.
I had student loans way back when but I paid them off. Furthermore, when I did have student loans my state college tuition was around $350 dollars a semester, quite a far cry from the thousands of dollars the inflated price is today.
The whole situation is a mess and here's why. The government should not be issuing student loans in the first place because it inflates the price of education. The more loans available, the higher the tuition rises and on and on it goes. It's another ponzi scheme just like the mortgage fraud mess. The issuers of the loans, ie the Banks, get the money, the money is made up out of thin air (just like any credit), the people are made to pay interest on the fake money, the interest is raised (like adjustable rate loans), they can't pay it, the government ergo YOU! "bails" out the banks...who wins? The BANKS and the people running the institutions whether they are colleges or mortgage companies or whomever..but the house, I mean the bank always wins. There should be no bail out, just like we should not have bailed out the banks in 2008. When a bail-out happens the debt just goes to the people, it is not erased. The whole system is fraudulent, people need to opt out of the system entirely.
The United States government started meddling in the student loan business in 1965, ever since then the cost of tuition has risen exponentially. When will people start to put the pieces of this puzzle together? Loans..any kind of loan is a trap. It's not free money, it's not a free education, it is a slave trap to enslave you with debt. The institutions making the loans are not lending you their money, they make the money up, the money is nothing more than digits on a computer. Then they make their money through interest and bail outs. It's the same ponzi scheme over and over again. The type of loan changes but the principals remain the same. The banks lend out fake money to X, X pays interest that builds up to an enormous amount of debt over the course of the loan or X cannot pay, X was never meant to pay, X refinances the loan at a higher interest rate along with fees and whathaveyou, X defaults, the banks either win by getting interest, a bail out or in the case of the mortgage mess, they confiscate the home, collect on insurance and get a bail out! Ostensibly, since student loans have no collateral they are subject to stricter default penalties, for example student loans cannot be eradicated through bankruptcy.
So what can we do? First of all, if you don't have a student loan, don't get one. If you can't afford a higher education do something else or find another way. The whole hype about getting a higher education is nothing but a sales pitch. I know many people who chose not to go to college and they have made more money over the long run than many college educated people. Moreover, the money they saved by not going to college they were able to invest in either businesses or homes, thereby living debt free for most of their lives. It's time to shut off the TV and start to think for ourselves.
If you already have a student loan and can't pay it because you are unable to get a decent job due to the planned collapse of our economy ...don't pay it. Sure, your credit will be ruined but so what. It's time to turn the system on its head. Who says you have to play by their rules? Who says you have to have good credit? The banks? It's time to quit playing by their rules.
I am against a bail-out and/or forgiveness of student loans because that just benefits the banksters, and perpetuates the system.