The Fed's Financial Accounts: What Is Uncle Sam's Largest Asset?

Pop Quiz! Without recourse to your text, your notes or a Google search, what line item is the largest asset in Uncle Sam's financial accounts?

• A) U.S. Official Reserve Assets
• B) Total Mortgages
• C)Taxes Receivable
• D) Student Loans

The correct answer, as of the latest quarterly data, is ... Student Loans.

The student loan bubble, the biggest slice in Uncle Sam's asset pie, will haunt us for many years to come.

DYI Comments:  Who wants the cost of education to drop significantly??  Easy, simply allow students to file bankruptcy on student loans.  Obviously the amount being loaned out in the future would drop like a rock.  Universities, Colleges, technical schools would no longer have their cash cows as students would have to pay cash.  These schools would have to adjust to the new paradigm or go bust.

What simply would happen is the cost of schooling would go back to the way it was before all of the loan programs, a student would work a part time job, a little help from Mom and Dad and graduate debt free.  Putting this into place will take political will for the schools will scream to the heavens that this will be the end of education pulling out every propaganda technique(and maybe some new ones) to keep the cash machine going.

This distortion of the market is caused by a government program which ended up being a huge subsidy for the schools and not the student.  Want the cost of schooling to drop?  End student loans.  Within five years the cost will go down to the level of the customer.

DYI