After a marathon Quicken session, I am finally up-to-date. I discovered that sometime early this year my net worth turned positive. (Gasp! Furrow brow.) No worries, I intend to bite the consulting hand that feeds me, quit my job, return to school, and take on more loans.
There are some worrying headlines, however. To wit:
As Credit Crunch Spreads to Student Loans, Government Has Other Priorities
Fewer Loans for Students As Credit Crunch Spills Over
SLM As Student Loan Business Looks Broken
Hmm, worrying news. The future debacle will share some features of the current mortgage mess--we will be able to weave a victimized-by-lender story that makes your eyes roll as much as this one. We should feel outraged that an evil real estate broker convinced Maria Cruz, a house cleaner earning $1,700 a month, that she could afford a $3,200 a month mortgage. Kill me. The broker was shady. Maria has an incredibly tough life as an immigrant on $20k a year. I truly empathize with her. But, really? I can't cut her much slack on that math.
Replace Maria with anyone with student loans, really. Replace the mortgage with loans to cover "school expenses" that are often stretched to include vacations, stock bets, gambling, and worse, I am sure. Replace shady broker with the student aid adviser who didn't prohibit you from signing that dotted line. MFAs, everywhere, will be weeping.
No worries--I have a win-win situation. I call upon all students this fall to borrow much, much more than they need. Eat, drink, be merry, but nevertheless, fear the lender. Use a significant portion of those excess borrowings to short Sallie Mae. If the short works (and Sallie Mae tanks), we will be able to pay back the money with a handsome return. If the short doesn't work (i.e. Sallie Mae recovers) then we will have borrowed more money than we can pay back, we will default on our payments, we will watch Sallie Mae implode, and our short will pay off handsomely. I really don't see how this can fail.
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