“If there were no government-guaranteed student loans, college tuition would be much lower.”
~ Gary Johnson
By Catherine Austin Fitts
In 1992, the US Secretary of the Treasury asked me to join the Federal Reserve as a governor. As I had started a company and made numerous personnel commitments, I declined. Shortly thereafter I received a call from the Chief of Staff to the President of the United States. He bluntly shouted, “Did you really just turn down the Fed or am I being lied to?” When I explained that I was unable to accept a full-time position he said, “OK, I’ll put you on the board of Sallie Mae then.” He hung up.
Shortly thereafter, I found myself on the board of Sallie Mae, the government sponsored enterprise which securitized student loans. After I left the board in 1995, Sallie Mae, Congress and the Clinton Administration reengineered the legal and regulatory structure for student loans (with later help from the Bush Administration). The result was the privatization of Sallie Mae, the ballooning of over $1 trillion in student loan debt and the most egregious example of predatory lending since the emancipation proclamation.
Over the last ten years, the growth in student loans has paralleled the extraordinary growth in the cost of a university / college education. These costs have exceeded any estimate of the consumer price index or any measure of inflation by a wide margin. Student loans are rising in cost way beyond expenses in any other part of our society.
Alan Michael Collinge’s book, The Student Loan Scam, is an expose of the predatory nature of the student loan industry. Collinge earned his degrees in aerospace engineering, graduating with student loan debt of $35,000 that then ballooned into $105,000. So he put his training to work unpacking the student loan industry.
In this in-depth exploration, Collinge argues that student loans have become the most profitable, uncompetitive, and oppressive type of debt in American history. He states:
“When I first looked at this issue ten years ago, we owed about $350 billion cumulatively in student loans. Today, we owe approximately $1.4 trillion in student loans. When you look at curve of the cost of college versus the cost of healthcare or any other inflation-prone industry or market, student loans are by far and away the most accelerating in terms of price. The cost of college has risen at double or, more recently, even triple the CPI. And this has been a long-running trend going back to the 80’s.”
Alan joins us on the Solari Report this week as we delve into the profitable engineering of the failure of our young people and – for a broad section of the American people – the failure of the future itself.
- Alan Michael Collinge’s web site
- Special Solari Report: The Student Loan Scam
- The Economic Hit Man of Student Loans
- Walden on Wheels
In Let’s Go to the Movies I will look at this summer’s hit film, Straight Outta Compton.
I’ll talk to you this Thursday! If you’re not a subscriber yet, you can become one here.