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Student Loan Bubble Forces Yale, Penn To Sue Their Own Students

Zero Hedge: We have not been shy about exposing the massive (and unsustainable) bubble of credit being blown into the economy via Student Loans from the government. We have not been afraid to note the dramatic rise in delinquencies among these loans - and the implications for the government.

However, as Bloomberg reports, it appears the impact of this exuberance has come back to bite the colleges themselves. In what can only be described as a vendor-financing model, the so-called Perkins loans (for students with extraordinary financial hardships) have seen defaults surging more than 20%.

The vicious circle, though, has begun as the ponzi of using these revolving loan funds to 'fund' the next round of students is collapsing thanks to the rise in delinquencies. Schools such as Yale, Penn, and George Washington are becoming very aggressive at going after delinquent student borrowers.

While financially hard-up graduates complain of no jobs, the schools are not impressed: "You could take a job at Subway or wherever to pay the bills ... It seems like basic responsibility to me," but perhaps that is the point - avoiding responsibility is seemingly rewarded in the new normal.

Via Bloomberg,

Yale Suing Former Students Shows Crisis in Loans to Poor..

MORE:

http://www.zerohedge.com/news/2013-02-05/student-loan-bubble...




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Thanks Bobby

Shared on Twitter.

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Will students recieve a bailout?

I doubt it. Just like with the housing bubble, the banks will double dip [forclosure + bailout].
In the instance of a threshold of student loans defaulting, they will bailout the LENDERS and not those that have defaulted after having paid years/months of interest.

That's about it- this sh*t is planned way in advance.

During the real estate bubble, congress, at the behest of banksters way ahead of them, tightened the bankruptcy laws so — unlike mortgages — student loans couldn't be forgiven. No one said peep.

"If you want something you've never had before, you have to do something you've never done before." Debra Medina

Sequel to "Sub-prime Housing Loans"

Since the original movie was such a hit they decided to make a sequel, "Sub-prime Student Loans".

Bet no one saw THAT coming, either!

"If you want something you've never had before, you have to do something you've never done before." Debra Medina