Student Debt & Mortgage Loan Walk Into a Bar...

Mortgage Loan: Hey Student Debt, it’s been a while. Glad you could make it. How was your year?

Student Debt: Man, I had a fantastic year. Grew at about $3300 per second. I’m now over $1.3 Trillion. Pretty hard to find a suit that fits when you’re this big and growing. I’m not sure why, but everyone thinks they NEED to go to college and I’m the ONLY WAY most are going get there. With college costs going through the roof and the Average Joe Family making only $56,000, there’s no way to pay for college without my assistance. Pretty good situation I’ve got here. How about you Mortgage Loan. How’s the recovery going?

Mortgage Loan: Slow but steady. Still a lot of rules and restrictions keeping my growth down. My customers need jobs and a good credit history. The properties they want to buy need to appraise at certain dollar amounts to support a manageable debt / equity ratio. I know it’s to protect my customers and to keep us from having another crises like we had a few years ago but it still seems a little constrictive. To be honest though, I do feel pretty good about myself. Got that weight under control.

Student Debt: My customers don’t need a job. They fill out a financial aid form (FAFSA) and when they don’t qualify for grants I lend them money. Sometimes boat loads of money. I NEVER ask what degree they are working on or if they will even make enough money to pay me back after they graduate. When they come back for more I just give it to them, NEVER asking how they spent the first batch or what kind of grades they earned with it. It’s almost free money. No questions asked. Well…at 6-10% interest.

Mortgage Loan: But they HAVE to pay you back?

Student Debt: You bet! I give them MANY payback options. #1) Payback principal + interest in 10-25 years #2) Death. Of course I prefer Option #1.

Mortgage Loan: My interest rates are only 3-6%, which benefits my customers. How come your rates are so much higher? Someone’s making a pretty good return on your loans!

Student Debt: Now wait a minute! Only about 50% of my customers get that college degree they borrowed the money for and many default because even with a college degree they can’t afford the loan payments and pay all their other bills. This year the average starting salary of a college grad was only $40,000. My loans are not secured and I’m taking on a lot of risk so my rates are higher.

Mortgage Loan: I wouldn’t misconstrue “Death” with unsecured. As a matter of fact it’s a little creepy just thinking about it. What I don’t understand is that you ARE a government agency which alleviates a great deal of the risk, so why would you want to profit off of YOUR citizens who are trying to better themselves? I think the real risk is YOU! Student Debt. The ease of borrowing and lack of accountability with your customers puts a huge debt burden on them some will never recover from. Plus YOU, the government is making a handsome profit. I’d be very careful if I were you, YOU resemble ME back in 2008 when I was growing out of control.

Student Debt: You’re always the pessimist Mortgage Loan! All I see, is a future of growth.

Mortgage Loan: All I see is another financial crash with the Average Joe’s of the world feeling the pain…AGAIN!