DRACULA IN THE OPERATING ROOM

Dracula in the operating room.

Dracula is the United States government. The operating room is the college student loan program.

A college education today is a costly thing. It has been for the last 30 years. Becoming increasingly more expensive each year. There was a time a young person eager for a college degree could work his/her way through school. A decent summer job and two to four part time jobs while in school. One or two small scholarships along the way helped.

I know. I and many like me did it. Of course back in 1953-57 when I was in college, the cost of room, board and tuition was $2,400 a year. A lot of money at the time. However, no where near the dollars involved today. A gallon of gasoline was 17 cents and a loaf of bread 10 cents.

The cost today of a higher education degree has gone through the roof. The cost of one year at a private college is $50,000 to $60,000 for room, board and tuition. The cost at a public university between $20,000 and $35,000 for room, board and tuition.

Public institutions of higher learning are obviously cheaper. Eighty percent of all American students attend publicly funded universities and colleges. The reason being that such schools are cheaper to attend.

As States have become squeezed economically, public assistance budgets have been cut dramatically. State schools receive less and less assistance each year. Public institutions have had no choice but to raise room, board and tuition charges. Administrators compelled to order increases across the board.

The federal government came to the rescue. A college student loan program. Every one could then afford to go to college. Borrow now and pay later.

Later became a problem. An unforeseeable one initially. A well known one today. Young people cannot afford to pay back the loans. The job market is down. Salaries for those college grads working much lower than anticipated. The where with all to pay non-existent.

The college student loan debt today is $1.1 trillion. Impressive. Any thing with a trillion dollars at the end is. Note that the U.S. debt to China is $1.3 trillion. The comparison made to show how extremely large the student loan debt has become. I read some where that it is even larger than all the credit card debt in the United States.

It has been recently discovered that the government gets a piece of the pay back dollars. A fee of some kind. There is a new statute in the works to help the student debtors. However, it will not eliminate the government receiving a piece of the action.

The government profited in 2012 $44 billion. In 2013, a bit of a slide. Only $41.3 billion. 

Two corporations world wide made more profit in recent years. In 2012, Exxon Mobile profited $44.9 billion and Apple $41.7 billion.

If the government's profit in either of the two years mentioned were to be paid out in Pell grants, maximum level payments of $5,645 would be paid to 7.3 million college students.

The government denies a profit is involved. It claims the accounting makes it appear to be a profit. I do not buy it, nor do many others. The $40 billion plus profit goes from a federal college loan fund account into the general fund. From the general fund, it is used to pay all sort of government bills. The government is running a for profit business which subsidizes other government activities.

It gets worse.

Federal legislation prevents a college student loan debt from being discharged in bankruptcy. A tough situation for the college graduate who cannot find a decent paying job in today's society.

The government hires bill collectors. The government is under the impression that 76 to 84 cents will be recovered by pursuing those who have not or are not any longer paying. Good luck! The government will be lucky to recover 25 cents on the dollar.

The government has retained collection firms to pursue college loan debtors. They are referred to as collection specialists. One is NCO Group Inc. NCO is owned by JP Morgan. The same JP Morgan who helped give us the 2008 mortgage debacle and recession for several years.

The college student loan program is another example of how government takes care of its people when the weight of the economy causes them to  bend over.