Steve Eisman Blasts For-Profits, Arguing "Subprime Goes To College"

As a result of a lot of reading and research on this topic, I've mentioned the same thing, i.e., that the subprime mess looks pretty much the same when it comes to the student lending industry. In fact, I made a point to discuss the way in which Deutsche Bank and others have invested in student loans. I think it's all well and good that Steve Eisman is turning his attention to for-profit schools and blasting them for carrying out the same sort of unscrupulous activities as those  did on Wall Street. (Mr. Eisman, incidentally, was chronicled by author Michael Lewis in the Big Short for his open criticism of the subprime gambling on Wall St). Indeed, this problem needs to be exposed. However, I find this sole focus on the for-profits to be disconcerting for one important reason. It's great that Mr. Eisman has noted, as I have countless times (along with other student loan advocates) that we're on the "cusp of a social disaster." I would actually disagree with Mr. Eisman and say we're not on the cusp, we're there. It is noteworthy that he compares this situation to those who lost their homes. Even worse, as most of my readers know, student loan debtors can't flee from their debts (in some cases it follows you to the grave). If we can't make education affordable, as I've said countless times, we can say hello to becoming a Third World Country. This crisis is problem that I think needs to be addressed and needs to be solved immediately. I write that with different and deeper views on education as a result of the time I am spending here in South Korea as an instructor. But I digress. My biggest concern is this: it's not just the for-profits who should be scrutinized. The entire system is a disaster, and that means that all universities and colleges should be forced to reconsider the way in which they are allowed to increase tuition whenever they so choose.

On another note, I've referred to us for a long time as the indentured educated class, and it turns out . . . student loan-backed securities are labeled as indenture instruments. That's right! Now, if that doens't make your stomach turn as an indentured educated citizen, I don't know what does . . . Yikes.