The Student Loan Racket; Too Sketchy for Wall Street

Moe Tkacik, who in general is my favorite unattached journalist, wrote this blockbuster about the student loan industry and the fact that they are the only debts not dischargeable through bankruptcy. Also, we Millennials are basically fucked:

Maybe the student loan shark scam was too fishy even for Wall Street, even in 2007, to want to get too close to the action. And if Lord has been spreading the no-risk wealth around Wall Street in the aftermath of the credit crisis it is not apparent from securitization volume, which has slowed to a trickle even as student borrowing keeps setting new records. In 2010 students borrowed $100 billion, but Student Loan Asset Backed Securities (SLABS) issuance was a meager $13.6 billion, down from a peak of $78.7 billion in 2006.

Perhaps this lack of Wall Street skin in the game is partially to credit for the fact that such reliable business lobby organs as Forbes have demonstrated refreshing equanimity to the cause of restoring students’ financial rights. The student loan shark bubble will, after all, ultimately prove far worse for business than the subprime mortgage bubble. But it also demonstrates that the shadowy ruling elite’s overwhelming contempt towards its citizenry runs deeper and dates back farther than full time chroniclers of American decline ever believed.


Moe has also been doing some serious blogging over at her new site. Check it out: