Wednesday, August 22, 2018

Even student loan defaults have brought out the Race Card as now over one million debtors are defaulting on their loans each year

If there is one person to blame in the growing epidemic of high student loan debt it can be squarely placed at the feet of the former President Barack Obama.  This is because his nationalization of Sallie Mae back in 2010 has not only led universities to increase education costs several fold knowing that the government is backstopping the loans, but also the ease and scope in which students could borrow with government underwriting almost ensured they would be bound by the yoke of debt for decades.


Average student loan debt at graduation - through 2015


America's overpriced and overvauled education system is also a microcosm for what happens when the government get involved in any private industry.  Even taking out what happened to insurance costs between 2010 and today once Obamacare was put into motion, the fact that the U.S. already subsidizes a large share of the population's overall healthcare through programs like Medicaid and Medicare has equated to America having the highest cost per capita for healthcare in the world, but ranking only 37th in having the best healthcare system.


Yet when we go back to look at the root of high priced education and who is responsible for the growing number of student loan defaults, it should not be surprising that researchers want to pull out the Race Card and put the problem squarely on the tired old cliche of minorities being the victims.
The average defaulter is more likely to live in Hispanic and black neighborhoods, Blagg found. Her previous research has shown that minorities are more burdened by their education debt because their parents have a lower net wealth as well as higher rates of unemployment. These neighborhoods also have a median income of around $50,000, compared with $60,000 for non-defaulters. - Zerohedge
Now unless the parents of these 'minority' students are co-signing for their student loans, this argument doesn't carry any water since the majority of white and Asian student debt holders are in the exact same boat.

Once again, very few analysts and researchers ever want to address the real source of the problems when it comes to areas like education, healthcare, and especially the economy.  And because of this, it is unlikely that these issues will be dealt with anytime soon, especially since the popular reaction is to demand that these debts simply be expunged or that education and healthcare should be given out for free.

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