The situation reminds us of that literary classic "Five Little Monkeys Sitting in a Tree". You know the story. One by one, the monkeys misbehave and receive fatal concussions. It's a kids book, that demonstrates the dire consequences of misbehavior.
But continuing on with the monkey allegory, the next monkey to receive a fatal concussion: BankOfAmerica. Yup. BofA is done with private loans. This is a double whammy because FirstMarblehead used to buy all the funded private loans from BofA. So FMD lost a really big customer as well. We predict that within the next 3 weeks BofA will also step out of FFELP lending too. For the same reason that Chase did, and Nat City did, and Brazos did, and Nelnet did, and CLC did, and so on, and so on.
Indeed, we can learn so much from the children's classics. You mess around with a system, and you cause irreversible damage, just ask one of the monkeys. Should our Congressmen learn their lesson is yet to be determined. As it sits right now, it doesn't appear that they have connected the dots: remove profitability...and....all the lenders go away! It's not that difficult, but they will soon figure this out.
The band-aid legislation swirling around doesn't fix the underlying problem, and therefore will have little, if any, impact on improving the situation. If we all sent our Congressmen a copy of
"Five Little Monkeys Sitting in a Tree", and a note explaining the mess they made in student lending, perhaps a light bulb might go off.
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3 comments:
Oh gawd...they've got more mess on their hands than they know what to do with.
That's funny--blaming Congress for this mix. How about blaming the banks and other financial institutions who push subprime mortgage (and private studentloans) loans on borrowers who couldn't pay them back and then sold them in pools to unsuspecting investors. Lenders are hurting -- but they should look in the mirror, and not cast stones on the very people who are going to bail them out--once again
I believe you have confused "Five Little Monkeys Sitting in a Tree" with "Five Little Monkeys Jumping on a Bed". In the latter, the monkeys receive head trauma as a result of their actions. In the one you've referenced, the monkeys are eaten by a taunted crocodile or alligator. Similar fatal result..
Compare:
Five little monkeys jumping on the bed. One fell off and bumped
his head. Mama called the doctor and the doctor said, "No more monkeys jumping on the bed!"
Four little monkeys jumping
on the bed(and so on).
With:
Five little monkeys sitting in a tree, teasing Mr. Crocodile--
"You can't catch me."
Along comes Mr. Crocodile
As quiet as can be-- and he SNAPPED that monkey right outta the tree! (Continue until all monkeys are gone and conclude with)...away swims Mr. Crocodile
as full as he can be!!!
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