Monday, September 3
It's Labor Day: Why Am I Not Feeling Energized?
CubaNow.--There he was, too pale and much too chubby to pass as an old salt but nonetheless perched proudly on the foredeck of his sparkling new Newport yacht, the aptly-named Numbers: one Daniel M. Meyers, a founder of First Marblehead Corp. and one of the leading players in the $20 billion student loan industry.
Why should I begin a Labor Day post with this sorry image from Sunday's New York Times business section? Because the piece reports casually, in the context of charting the spectacular profits of companies like Meyers', that the average debt level carried by newly-minted college graduates has more than doubled over the past decade.
The Times piece on the student loan business also reports that this lucrative racket could end up looking a lot like the subprime mortgage racket: i.e., the sharks move in, they feast themselves, and they swim away before their victims quite realize they have limbs missing and before various Congressional sock puppets (happy for now to take money from the sharks) start clearing their exquisite throats to deplore the sorry mess.
It's the borrowers I am most interested in. They are the ones who, most often with their economically-stressed parents' concurrence, take the big gamble and go deeply into hock in the expectation that their dearly-purchased degrees will allow them not only to pay off their college debt but also achieve a comfortable middle-class life within just a few years....more
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