Higher Debt: Is the student loan industry headed for a meltdown? « » Print The Daily Caller – Breaking News, Opinion, Research, and Entertainment:
In my bankruptcy practice, I see this problem as far worse today than even this good article does.
I have spoken to recent graduates and parents of current students. Both are drowning in debt now.
For parents, it is far worse. They are trying to pay student loans for their kids and prepare for retirement.
The bubble has already burst. We just haven't felt the consequences yet.
Obama nationalized student loan financing along with healthcare. That default rate is going to show in the national deficit now. $849 billion of loans with 20% default rate since 1995. That rate is skyrocketing right now as parents with debts become unemployed. Any bankruptcy practioner can quickly tell you about the millions of dollars in student loan debt that their clientele represent. I haven't been at bankruptcy long and my clientele is already pushing toward the first million dollars quickly.
Congress is going to need to cut this program and soon.
When the mortgage bubble popped, I first experienced it with a deal gone sour in April 2007. It took 18 months for many people outside the real estate industry to face the same facts. Acquaintances of mine from Las Vegas have stories that go back many months earlier than my experience.
The same thing is already in play for student loans. Kantorwitz is smoking dope. He doesn't see the problem because he is dealing with people entering the pipeline. He is like a mortgage broker. They are the last to see the problem. Their job is to keep filling the pipeline until people on the other end, like me as a bankruptcy attorney, say there is no more room in the pipeline.
Obama's nationalization of the student loan market has temporarily hidden the problem from general view. He has made the ultimate collapse later and larger.
Sound like Fannie Mae all over again?
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