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Why I Defaulted on My Student Loans

75 points by doppp 11y ago

chimeracoder 11y ago
I'm highly critical of the current student loan situation. That said: > If people groaning under the weight of student loans simply said, “Enough,” then all the pieties about debt that have become absorbed into all the pieties about higher education might be brought into alignment with reality. This would absolutely happen, but the first step towards that would be a 2008-like situation all over again, because banks would suddenly have to absorb massive unexpected losses (as they did in 2008), and all of these would cascade. And remember that, unlike mortgages and car loans, student loans aren't backed by any reclaimable asset - you can't repossess someone's degree! While foreclosures in 2008 were undeniably terrible for the people who lost their homes, the situation would have been even worse if the bank had no assets to repossess in any of the defaulted loans. Since the government bailout money has to come from somewhere, it will simply add to the national debt and (at some point) come out of future taxes. That's not really solving the issue. It's tantamount to replacing all private loans with the existing tax-subsidized federal loans, which doesn't solve the problem; it just kicks the can further down the road.
- deleted 11y ago
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  - chimeracoder 11y ago
    > Good! Should we just allow it to keep getting exponentially worse? Smaller correction now, or massive correction later? You're painting my comment as rather black-and-white. All I'm saying is that encouraging mass defaults on private loans is probably the most disastrous way to correct. In fact, encouraging mass defaults is letting things get exponentially worse; it forces the government to pick up the burden of these increasing costs without simultaneously addressing the reason that these costs are rapidly increasing. A correction will ultimately result in banks having to write off some of their loans, but forcing them to do so in a sudden and unpredictable way without addressing any of the other problems (inflated tuition costs, federal subsidies, etc.) simultaneously is putting the cart before the horse.
    - forthefuture 11y ago
      Not to mention the real solution to this problem is to not have so many people take loans they can't pay for an education that isn't worth what they're paying for it. It's a lot easier economically to just not go to college than it is to advocate everyone steal money to go to college.
- jonknee 11y ago
  > This would absolutely happen, but the first step towards that would be a 2008-like situation all over again, because banks would suddenly have to absorb massive unexpected losses (as they did in 2008), and all of these would cascade. Except student loans in America are almost nothing like regular loans. Until 2010 they were backed by the government which made issuing them as a bank as easy as printing money--you collect the interest while it's paid and then let Uncle Sam take the losses when someone defaults. (Even in this article notice that it's the DOE that's coming for the loan. ) Post 2010 the loans are issued by the government so you cut out the middleman taking all the profit. Either way there won't be a 2008-like situation.
  - muzz 11y ago
    > Until 2010 they were backed by the government The same kind of loans-- not all loans, but the same kind as were before-- are still backed by the federal government. What happened in 2010 was that the government took out the middleman ie the banks, saving taxpayers around ~$7B/year.
    - jonknee 11y ago
      Yes, hence why I said: > Post 2010 the loans are issued by the government so you cut out the middleman taking all the profit.
rhino369 11y ago
If you have federal student loans this is shitty advice. The loan payment programs are very generous. 10% of your income (minus 150% of the poverty level), which is probably more like 0-7% for most people, each year. If you default, hit your credit, and get your wages garnished, you'll be in a worse spot.
- deleted 11y ago
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- chimeracoder 11y ago
  > If you have federal student loans this is shitty advice. The loan payment programs are very generous. The author appears to have private loans, which are much more burdensome than federal loans for the debtor[0]. This is why federal loans are said to be subsidized and are counted as financial aid, even though people sometimes complain that it's "not really" aid because you have to pay money back. It's aid because the rates are well below market rate, which means the government (acting as a bank) would expect to make a loss on all loans issued, as the number of people who default would outweigh the amount of interest collected on the remaining loans. [0] Also, only undergraduate loans are subsidized - graduate loans are not usually (never?) subsidized.
  - leereeves 11y ago
    What's the real risk of loss on student loans? The people I know who defaulted all paid in the end, plus interest and penalties.
  - jonknee 11y ago
    The private loans were still backed by the feds which is why the DOE was coming after the author. Writing student loans was a nice guaranteed profit for a while (it changed in 2010 when they started cutting out the middle man).
  - TomSawyer 11y ago
    > the government (acting as a bank) would expect to make a loss on all loans issued, as the number of people who default would outweigh the amount of interest collected on the remaining loans As far as I know, you can't get out of paying a federal student loan even if you file for bankruptcy.
JoeAltmaier 11y ago
Self-indulgent me generation, using sophistry to justify defaulting on a loan. Because, mostly, he didn't want to work for a living. First-world crybaby.
- MisterBastahrd 11y ago
  He's a baby boomer. Your statement seems accurate to me.
  - 36bydesign 11y ago
    Let them rot in the rubber vacuum of hell.
- gregd 11y ago
  This is such patently absurd rhetoric, that it almost doesn't deserve a response. Almost. I took out student loans right out of high school because I was raised by a mother who lived on welfare most of my life. I saw a college degree as the ONLY way for me to end the cycle of poverty that I grew up in. But what I didn’t count on was paying an absurd amount for out of state tuition and despite being in forbearance, the loans accumulated interest. So my $30,000 in student loans has blossomed into approximately $60,000 (even with a bankruptcy), with little to no hope that I’ll be able to ever pay it back. I will die with student loan debt and it’s ridiculous. People who don’t understand the cycle of poverty in this country, like to throw around terms like “entitlements” or “self indulgence” or “lazy” and it’s bullshit. Quit applying your situation to every other situation in existence. If anyone in this thread is self indulgent, it’s you. Colleges set you up for failure. They are money making machines who whose main purpose is garnering new students at whatever cost. Most are not interested in your success (in school). Most aren’t even interested in the quality of your education. Our country needs to wake the fuck up and realize that a quality education, free of encumbrances, is the only way that we’ll ever make this world work. Knowledge is power and the fat cats in power are so afraid of empowering everyone with knowledge, that they have made the entire system into a house of smoke and mirrors. There is a plethora of resources available to everyone. Life isn’t a zero sum game. There is plenty to go around and we should all share in the benefits.
davidgerard 11y ago
Favourite quote: >But I have found, after some decades on this earth, that the road to character is often paved with family money and family connections, not to mention 14 percent effective tax rates on seven-figure incomes.
- e40 11y ago
  I know a lot of people without any of those that have a lot of character.
  - davidgerard 11y ago
    Your comment may be a response to the quote in isolation, but isn't really one to the quote in the context of the article.
dataker 11y ago
The issue with student debt is critical, but one can't take these individuals as solely victims. I went to a cheap state university and got a degree in CS. I had no debt after 3 years and my income is higher than average. If I had gone to an expensive private liberal arts college, I wouldn't have the same outcome and could be a victim of the process. Students must recognize they are also reaponsible for their debt.
- leereeves 11y ago
  Why punish students who believed the marketing instead of punishing the schools and professors who sold students a degree that isn't worth the cost?
  - jknightco 11y ago
    Because the students chose to pursue that degree. They're the ones who signed the debt paperwork, they're the ones responsible for making sure that decision was worth it.
    - leereeves 11y ago
      And isn't the school also responsible for its actions?
      - gregd 11y ago
        You will never get those that believe that the poor are "lazy" to admit that they're easy prey for student loans, payday advances and high interest loans.
        gregd 11y ago
        That's great. So some assholes are following me around and downvoting me for having an opinion. If you disagree with what I'm saying, how about having the gumption to argue your fucking point?
      - 11y ago
imaginenore 11y ago
Wow, his only justification is he didn't want to work to pay back the money he owed. What a shitty person.
orangecat 11y ago
Maybe the problem was that I had reached beyond my lower-middle-class origins and taken out loans to attend a small private college to begin with. Basically, yes. Lots of people who are better off financially than this guy somehow go to state universities and survive.
- themartorana 11y ago
  Right. Top tier educations are for rich kids only.
  - muzz 11y ago
    Top tier education at places like Stanford and Harvard actually entails $0 tuition for students from lower middle-class families
lookup 11y ago
Opinion: No character is built on quitting and lack of forethought. This generation needs to be wise enough to take a proper loan with the idea of paying for it. Times are not like they used to be.
- jacobparker 11y ago
  > This generation checks Wikipedia > Lee Siegel (born December 5, 1957)
  - lookup 11y ago
    Agreed, let's just hope that THIS generation (millenials) need to understand the outcome of applying for a loan much more than the former.
robogimp 11y ago
It takes courage to admit that you are in the dirty default club, good on him. I am in the default club too, here's why: In my country the two options after highschool were either to pay through the nose in student fees or not get an education, wind up in a shitty job. I chose the third way of taking the loan, getting a first class education then living in exile. The baby boomers got a pretty sweet deal when it was their time to be educated but I don't think there is a great conspiracy to defraud our generation. There is however defiantly a rampant political shortsightedness as evidenced by many nations de-prioritizing education so as not to piss off retiree voters. When a such a large generation votes along self interested lines the resulting society is obviously warped to meet their needs, which aren't necessary the needs of the nation at large. I bet the current gilded era of retirement will be long gone before we get there. Education is of immeasurable value to both the individual and to society, politicians are blind if they cant see that. I agree with the spirit of this article; that it's up to us to educate ourselves by any means necessary.
- davidgerard 11y ago
  I dunno. Notice how education became really expensive once the people who got it free got into power.
- crdoconnor 11y ago
  >The baby boomers got a pretty sweet deal when it was their time to be educated but I don't think there is a great conspiracy to defraud our generation. The elites ruling over the boomers were terrified of domestic communists. They talked about defrauding their generation whe they were young (rolling back the new deal, etc.), but they felt too threatened to actually do so. The elites of today do not feel threatened.
  - fnordfnordfnord 11y ago
    >The elites of today *The Boomers
    - crdoconnor 11y ago
melling 11y ago
"Maybe the problem was that I had reached beyond my lower-middle-class origins and taken out loans to attend a small private college to begin" I had to borrow almost all the money to go to college a couple decades ago. I went to an "affordable" state school. I screwed up my student loans by not following up while in grad school and ended up defaulting too. However, once I got a job, I paid hundreds of dollars extra every month and paid off my loans in under 4 years. I missed out on a few vacations, bought a $1000 vehicle then drove it until it started falling apart. Anyway, once a generation decides not to pay off their loans, the following generation won't get a way out of lower income. Don't go to that expensive small private college, if you can't afford it.
chiaro 11y ago
I think the system we have here in Australia, is terrific. Students accrue a debt to the government, covering tuition, but no payments are necessary on this until you attain a certain income threshold. Right now, that's A$53000 of which 4% is taken to repay (increasing with income). If you make less, you're not financially burdened. Furthermore, no real interest will be applied with the principal simply keeping pace with inflation.
- solve 11y ago
  Wow, sounds like an actual alignment of incentives.
  - baddox 11y ago
    How so? It sounds to me like it would incentivize going to university and choosing a degree regardless of the likelihood of that degree being a financially wise decision in the long term.
    - gregd 11y ago
      Why does a degree have to be financially wise? Do people become social workers for the money? Do teachers get into teaching for the money? Where would you be if everyone in existence chose a degree simply for being financially wise?
      - notacoward 11y ago
        Excellent point. I'd also add that it's important to look at this from the giver's (i.e. government's) perspective. It's beneficial for society if everyone is educated. Yes, there will be some who take the opportunity and do nothing with it to benefit either themselves or others. There will also be some who use it not only to enrich themselves but also to enrich society and even improve the economy. If the "hits" outweigh the "misses" then it's a good investment overall. Much like VC, in fact. Most startups fail, but a few succeed to a degree (heh) that makes up for it. Sometimes it's worth taking a risk on people.
fixxer 11y ago
It will be interesting to see where education ends up in the narrative for 2016.
seba_dos1 11y ago
I'm an European and I cannot grasp that education system in US. Granted, most of my knowledge comes from rants like John Oliver's or this one, so I guess it's hardly objective, but it looks like a pile of the worst possible solutions gathered together just to screw up the highest number of people. A few days ago there was also an interesting article here about US students discovering that they can go to Germany and have a high quality education without going into any debts. How is this system supposed to work well? It seems to be clearly designed to make money, not to educate people, which doesn't seem like a good way to enhance and maintain your society.
- gregd 11y ago
  *It seems to be clearly designed to make money, not to educate people, which doesn't seem like a good way to enhance and maintain your society." You are absolutely correct. Our educational system sets you up for failure. There is no vested interested in your success. We pay teachers a shit salary, in some cases it's not even a living wage, and we expect 99% of the population to accumulate tremendous debt, simply to get a college degree. There is a very slight chance that you'll be successful with that degree, if you went to the right college, if you got the right degree, if you finished in the proper amount of time, if...if..if. You're screwed if any one of those legs turns out to be not right.
- jodah 11y ago
  It's refreshing to see the occasional reminder, such as yours, that our situation in America is unusually bad. > How is this system supposed to work well? It seems to be clearly designed to make money, not to educate people, which doesn't seem like a good way to enhance and maintain your society. It does work well, for certain interests. But it's the same for almost any important financial concern in America. Taxes, utilities, medical care, retirement funding, most of our important systems are intentionally structured to fatten the wallets of powerful interests at the expense of maintaining society. And it's only getting worse, as the trade deals currently under negotiation clearly demonstrate.
- a3n 11y ago
  I'm an American and I cannot grasp America.
aNoob7000 11y ago
The student loan system in the United States is broken at both ends. The students have no incentive to shop around and keep costs down while going to school. The companies that loan money to students don't really look at whether or not they are a good risk. As painful as it may sound, I personally think that you should only be loaned a certain amount of money based on the degree you're getting and potential earnings in the future. If companies wish to loan you more money believing that you're good risk and charge you a little more interest along the way, that's fine, but you could also end up defaulting on your loan and the company could lose out on their bet. Their needs to be accountability and risk on both sides of this transaction. My two cents worth....
- dman 11y ago
  I dont understand this sentence at all - "The students have no incentive to shop around and keep costs down while going to school." . There is a direct financial incentive to shop around and save on the cost of an education, which in most cases is one of the larger financial outlays in a persons life.
chrisrudy502 11y ago
I'm reading a lot of "You should be smart enough not to have made the decisions you did when you were 18. Stop having made those decisions." While you are blaming Class of '94, Class of '19 is signing papers. Stop them.
- beering 11y ago
  I think that, fittingly, educating high school students about the financial aspects of college, choosing a major, taking out loans, etc. would go a long way. You can try to reform the system, but it'd probably do a lot of good to prevent more financial wrecks in the meantime.
  - themartorana 11y ago
    I would predict that doing so would become a political issue, since educating young people could have a negative impact on corporate bottom lines. The less experienced and educated, the easier to take advantage of.
  - jodah 11y ago
    Problems at the high school level are, not coincidentally, linked to what we're discussing at the college level (that is, they are the result of unusual structures imposed by moneyed interests). I think the best way to prevent financial train wrecks from misaligned incentives is to realign incentives. A post above about the Australian student loan system is a good example of what this could look like.
  - makomk 11y ago
    High schools are already educating their students about taking out loans. In fact, they're being paid really well by the loan providers to teach their students that they should take out loans for college. The problem here is that the incentives aren't aligned - their ex-students getting mired in student debt a few years down the line doesn't cost them anything, but replacing the mandatory sales pitches for student loan programs with proper financial education would.
88e282102ae2e5b 11y ago
I wish people would stop regarding liberal arts degrees as anything other than the most expensive form of entertainment.
- gregd 11y ago
  Why aren't we asking why this is even a degree? It's not an expensive form of entertainment, it was designed as a fallback mechanism for the college to make money.
  - gnoway 11y ago
    Well, at the school I went to (and did not graduate from), CS was offered through the College of Liberal Arts and Sciences. Along with Mathematics, Chemistry, Economics, Biology and several other useful disciplines. Liberal Arts is not a codeword for 'interdisciplinary studies'.
    - 88e282102ae2e5b 11y ago
      I use it as a blanket term for history, English, literature, philosophy, foreign languages, art, American studies, etc. Anything non-technical. I'm surprised your school was organized that way.
- MisterBastahrd 11y ago
  I wish people who know nothing of liberal arts education would stop dismissing it outright. It makes them seem petty and foolish. We need experts of all types in this world, not just nerds stuck behind a keyboard.
  - Vraxx 11y ago
    Not necessarily disagreeing with your core point, but your point about needing experts of all types in the world would be better served without a type of expert outright.
beering 11y ago
> Or maybe, after going back to school, I should have gone into finance, or some other lucrative career. Self-disgust and lifelong unhappiness, destroying a precious young life — all this is a small price to pay for meeting your student loan obligations. So author assumes he shouldn't have to work a job he doesn't like, even temporarily, to pay back all the money he borrowed? It would have destroyed his precious young life? WTF?
ekianjo 11y ago
> the government would have to guarantee a college education The role of government is not to have everyone enter and finish college. You need people with other (less qualified yet as important) jobs, too.
fnordfnordfnord 11y ago
When some business venture goes sour and the entity responsible decides to cut bait in order to save the rest of their business, that's usually considered by most to be a good thing, a wise, if unfortunate business decision; there is always risk in business, right? They saved their other investors' interests and their business lived to fight again another day. They made the best of a bad situation. When an individual does the same thing with a mortgage or with their student loans, it's a moral outrage. The default-ors are shamed socially, and thrown to often lawless wolves, (debt collectors) nobody wants to defend them against the reprehensible behavior from even the worst of these debt collectors becuase they can't pay, and because they 'deserve' shaming because they are 'deadbeats'. The same kind of social pressure can't/won't usually be applied to the 'deadbeat' business though. That kind of publicity might harm the their ability to repay their other creditors, keep paying staff, etc. Student-lenders want the profit without the risk. Given the manner in which American colleges have been turned into profit-centers, I am not sympathetic to their problems. I'm in agreement that a mass-default and hastening of the collapse of the current student loan status quo would be a good thing for students and for higher-ed.
gregd 11y ago
When I first attended college back in 1985, I was shocked at the number of institutions who camped out in the student union to hock their cheap plastic trinkets if you would just fill out this credit application.
notacoward 11y ago
There's a lot of rationalization and sophistry in that article, but this was the most egregious: > Self-disgust and lifelong unhappiness, destroying a precious young life Even if we accept all the rest, this part is ridiculous. There are plenty of jobs that pay better than writing and don't induce self-disgust, and even the worst jobs generally aren't likely to destroy a lifetime. Plenty of people endure a few years e.g. of military service, even though they don't enjoy it, and then move on to completely different things that they find more fulfilling. The author seems to think that nothing other than writing is an acceptable career choice, and that he has an absolute entitlement to such a career. What total bollocks. There are plenty of problems with our college-loan system, but the fact that Lee Siegel can't make good choices is a problem only with Lee Siegel.
- gregd 11y ago
  It's relatively easy to sit on the sidelines of someone's life and compare the choices they've made, to your own, especially when we're aware of the consequences after the fact. What isn't so easy is to admit to yourself, that not everybody has the same choices available to them as you.
  - notacoward 11y ago
    Oh, I'm well aware of that, but thanks for the ad hominem. I came from a background no more privileged than his. I had to make some hard choices, which among other things is why I don't even have a degree. I'm sure Lee Siegel had different opportunities and different aptitudes than I did, but those don't seem to have been the dominant factors here. Even with those opportunities and aptitudes, a better attitude would have allowed a better outcome without the need for a loan default. He wasn't willing to compromise on his choice of college or his choice of a first job. Other people who do make such compromises often do just fine, and eventually get into the career they wanted, despite an equal level of opportunity or aptitude. It's unfair that some people have to make such compromises while others don't. I've written plenty about that. Nonetheless, those who choose poorly deserve no sympathy from those who were faced with the same or equivalent choices and still managed to do the right thing.
kenjackson 11y ago
Why not attend community college for two years and then state college for two more? The financial burden would seem much lower. Why attend an expensive private school if you can't afford it, unless that school is offering something that is clearly worth the cost delta.
jodah 11y ago
A lot of commenters are zero'ing in on the author's experience, and I think they're missing the broader point. It isn't about what the author should have done, it's about a system of financial aid and rising educational costs that is broken, and that irreparably punishes people like the author for making mistakes while letting others off the hook. Depending on how you look at it, he was meant to fail all along (principal + ballooning interest = more profit, right?), and that is the point.
Smushman 11y ago
Debt, particularly student debt, is a loaded issue. So at the risk of karma, I am posting. In the history of the US there has never been a time where it is easier to take on debt. There has been so much tampering with the natural order of the financial system that many natural checks and balances have been altered, levitated, and in some cases nearly removed. Please bear with me here, this is not an anti-government screed. In 2007, per Federal Reserve Flow of Funds; Household Debt to Disposable Income reached 138%. There are also many other data points that show that since around 2006 we reached economic outlier territory. For comparison, in 1964 this number was just over 65%, and in 1991 was just over 80%. So it kind of went up like a rocket. Their information shows some normalization since 2009, but there is grey area there as they began adjusting their methods of measurement when they varied so far out of norm (in their defense this is what any good statistician would do). Even if you have no doubt in those measurements though there is a solid area of outlier in almost every financial measurement of activity since ~2006. This was actually the Fed Reserve goal, so they were successful in what they set out to do. The issue is that money is inextricably tied to national and individual personality. There will be knock-on effects there, and those aren't or can't be measured. In summary, and reaching my point, I would say that this person was one of many victims that the Fed knows will occur on the way, while making things overall better for the many. His personal response to that event is also IMHO normal. I would do it myself if I could (I have over 80k in student debt). That said, in all economic measurements, there is no account for changes in attitudes towards bankruptcy. In fact, bankruptcies are considered a static number in financial equations, X per year, with some variance as the availability of borrowed funds increases. Therein lies the rub. It is really not possible, or at least extremely difficult, to account for knock on effects that may be deleterious to attitudes. I would suppose this is why they don't include those; they are either considered side cases and too small to account for or like in the case of attitudes towards bankruptcy, not possible to measure. It is perfectly reasonable to fix things that seem broken. It is not realistic though to make changes in vital things like money with measurements taken in a vacuum. Particularly in things so deeply tied to attitudes and personality. Final words, if you can't measure it but you still know it's there, you must make sure you do not affect it. We are too far in human history now and know too much to continue to pretend that changes in critical things don't make a difference except in measurable and temporary ways.
markbnj 11y ago
The one thing that can be reliably expected from any debate of this kind is that those who fall on the fortunate side of some line between a good outcome and a poor outcome will be all about personal responsibility and making good choices, and those who fall on the other side of that line will be all about injustice. I don't really give a shit how hard you worked to become a well-compensated software engineer. It was still mostly luck. You were lucky to be born at the right time, lucky to have a brain that works the right way, lucky to have access to the tools and materials you would need to learn, lucky to have time to learn them, lucky to have a stable-enough environment in which to learn them. Lucky, just like me. I've been a well-compensated software engineer for three decades. Even more lucky in my case because I was on track to be a journalist and the only reason I do what I do now is that my parents sent me to a school where I happened to stumble on a mainframe I could play with, and later bought a home computer I could continue to learn on. I had nothing to do with either decision. It was just luck. Before you judge the outcomes that others have to deal with, and the paths by which they got there, you should think back on your own and consider all the little inflection points in your life that you had nothing at all to do with. That exercise should be enough to whack a couple of inches off of your estimation of your own merit and entitlement. And one last thought: perhaps the most damaging effect of the very high cost of education in America is that it means we can only have one kind of education: the kind that results in making a lot of money. All the other kinds of value seemingly have no value. We don't need artists, for example, because most of them won't make enough to pay for an education. Ditto philosophers, writers, most teachers, many scientists, etc. If you were a parent now, as I am, and considering colleges for your child, as I am, how could you possibly encourage him or her to attempt to study the arts or sciences at a first-class school? The odds of ever being able to pay back those loans in those professions are small and dwindling. The arts and sciences will, I think, end up as the hobby careers of the children of rich families who can afford to pay for school out of pocket. Maybe it's always been more that way then not, but I can't help but contrast our approach to that of Denmark or Germany, where everyone goes to school at no or low cost. Which society is more likely to make the most of it's human potential?
littletimmy 11y ago
When the social contract is not working for you, there is absolutely no reason to honor it. The student loan system is a predatory system that practically forces young people into debt. The upside is not comparable: schools in the US are not That much better than any other developed country, and most of those countries provide an undergraduate education for free. Even Oxford and Cambridge, comparable to the top undergraduate education in the US, are only $14000 per year for UK students. The terms are draconian, and practically enslave a student into indentured servitude. It is not hard to think that serves (as Chomsky calls it) a disciplinary measure to stop students from being too independent. What I'd like to see is EVERY student in this country refuse to pay student loans. Just fucking refuse. Let the lenders collapse, it would serve them right for making predatory loans.
- irishcoffee 11y ago
  > Let the lenders collapse I think 2008 proved that this won't happen.
schizek 11y ago
Author finished a Ivy League, Columbia University and write for Times but refuse to pay back loan that gave him all that?? I have no words for this person. In economy nothing disappear. If he didn't payed next generation will. Increasing cost of education is mostly because some lousy liberal arts graduates choose to cheat their way.
abrown28 11y ago
I think he's a contemptible ass. His mother is the cosignor on the loan. I would work my ass off to pay that back rather than let the negative effects of defaulting land on my mother.
zaroth 11y ago
Personally I know that college was a complete waste of time for me. I gained very few skills in the classroom I would not have picked up myself, and have zero need for the credential. Sure, I wouldn't mind getting the $100k I spent back. But it was a choice I made based on the information I had at the time. I also am pretty certain that from a macro standpoint it's obvious that American universities are doing something very right. I hear the frustration in many of these comments and the desire to rant, but hyperbole doesn't really make for interesting discussion. American universities and colleges are not universally bad, they do in many cases actually succeed in providing a valuable education, 99% of the population does not in fact accumulate tremendous debt simply to get a college degree, etc. As for student debt in general, I personally think of it as just another variable tax rate on the middle class. The middle class is absolutely strangled by progressive taxes, and FAFSA is just another cog in the machine to claim $0.95 of every dollar you earn from $30k to about $120k of MAGI. What is the solution? Who is John Galt? In many cases the correct answer is to just stop earning regular taxable income beyond about ~$30k MAGI. Suddenly your health care is free, your groceries are free, your kids college education is free, and your tax rate is negative (Treasury sends you the checks) and you certainly won't be servicing that old student loan either. I'm not saying to stop contributing back to society, I'm just saying, consider stepping off that squeaky spinning wheel first. Any progressive system, by definition, will have parts of the curve where marginal utility is reduced. Some people (apparently like the author of this op-ed) manage to step directly into the worst part of this curve, which at many points demand in excess of $1.00 for every incremental $1.00 you earn. Very few people have even a basic understanding of the tax code and social welfare programs of the U.S., so it's impossible to expect people will make "good choices" under the current system. It's unnatural for someone to realize that job they are working feels like it's paying a wage, but over 10 years actually costs significantly more than it pays! This is all a result of the current system of which nondischargeable student debt plays just a small part. The most annoying part of the article is that it appears the author actually found the solution, but just continued ranting like the solution didn't exist, and didn't bother explaining the actual mechanics of it so people might actually learn from it. It's also worth pointing out the author is not a current student (not dealing with the current system which is much different) but living with loans from a past era. The part about mom co-signing the loan, for example, was a huge red flag.
nhangen 11y ago
I could not afford my loans...I was basically unemployed (looking for work) with loans on permanent forbearance. It took a 4.5 year stint in the Army to pay mine off (student loan repayment program), but I did, and I'm all the better for it. I have zero sympathy for this person.
- zzalpha 11y ago
  Not questioning your decision at all, but I'm curious, you say you're "all the better for it". How? Better because of the experience of paying off your debt? Better because of your experience in the military? Both? Something else? I mean, I've certainly paid off my fair share of debt in my lifetime (fortunately, where I live, tuition isn't nearly so astronomical, so my student debts were modest and everything subsequent to that has been manageable consumer debt), but I'd never have considered debt repayment a personal growth opportunity.
  - nhangen 11y ago
    I didn't join the Army for the sole purpose of having my loans repaid; it was just icing on the cake. I also received a sizable signing bonus, and was able to convert my degree into an automatic promotion to E4 (Specialist instead of Private). The Army gave me the discipline I needed to convert my passion into business opportunity, and allowed my family and I to build a solid foundation for the future.
    - zzalpha 11y ago
      Sooo... you have zero sympathy because they didn't decide to join the military like you did? No offense, but to assume all people should make the same life decisions you did, and to hold no sympathy for those who don't, is pretty myopic. Believe it or not, not everyone can or should join the army to solve their financial or personal problems.
      - nhangen 11y ago
        You're being ridiculous and taking my words out of context. I'm not suggesting everyone join the Army; I'm suggesting that they do the right thing and pay their debt, regardless of what it takes. For me that meant joining the Army. For others it could mean something entirely different.
GeorgeOrr 11y ago
There's been a lot recently about the explosion of tuition burdens. And the ways in which the student loan system is mostly setup to benefit the banks (and to the Feds it's also a positive revenue source). Is this a sort of step towards civil disobedience? If enough people took this step, would the system change? For the better? Although I do wonder if the system would change quicker if people refused the costs, refused the loans and made it without higher education until things are reformed. Neither path is very smooth for the person doing it. Not sure if either will help change things.

75 points by doppp 11y ago

I'm highly critical of the current student loan situation. That said: > If people groaning under the weight of student loans simply said, “Enough,” then all the pieties about debt that have become absorbed into all the pieties about higher education might be brought into alignment with reality. This would absolutely happen, but the first step towards that would be a 2008-like situation all over again, because banks would suddenly have to absorb massive unexpected losses (as they did in 2008), and all of these would cascade. And remember that, unlike mortgages and car loans, student loans aren't backed by any reclaimable asset - you can't repossess someone's degree! While foreclosures in 2008 were undeniably terrible for the people who lost their homes, the situation would have been even worse if the bank had no assets to repossess in any of the defaulted loans. Since the government bailout money has to come from somewhere, it will simply add to the national debt and (at some point) come out of future taxes. That's not really solving the issue. It's tantamount to replacing all private loans with the existing tax-subsidized federal loans, which doesn't solve the problem; it just kicks the can further down the road.

deleted 11y ago
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- chimeracoder 11y ago
  > Good! Should we just allow it to keep getting exponentially worse? Smaller correction now, or massive correction later? You're painting my comment as rather black-and-white. All I'm saying is that encouraging mass defaults on private loans is probably the most disastrous way to correct. In fact, encouraging mass defaults is letting things get exponentially worse; it forces the government to pick up the burden of these increasing costs without simultaneously addressing the reason that these costs are rapidly increasing. A correction will ultimately result in banks having to write off some of their loans, but forcing them to do so in a sudden and unpredictable way without addressing any of the other problems (inflated tuition costs, federal subsidies, etc.) simultaneously is putting the cart before the horse.
  - forthefuture 11y ago
    Not to mention the real solution to this problem is to not have so many people take loans they can't pay for an education that isn't worth what they're paying for it. It's a lot easier economically to just not go to college than it is to advocate everyone steal money to go to college.
jonknee 11y ago
> This would absolutely happen, but the first step towards that would be a 2008-like situation all over again, because banks would suddenly have to absorb massive unexpected losses (as they did in 2008), and all of these would cascade. Except student loans in America are almost nothing like regular loans. Until 2010 they were backed by the government which made issuing them as a bank as easy as printing money--you collect the interest while it's paid and then let Uncle Sam take the losses when someone defaults. (Even in this article notice that it's the DOE that's coming for the loan. ) Post 2010 the loans are issued by the government so you cut out the middleman taking all the profit. Either way there won't be a 2008-like situation.
- muzz 11y ago
  > Until 2010 they were backed by the government The same kind of loans-- not all loans, but the same kind as were before-- are still backed by the federal government. What happened in 2010 was that the government took out the middleman ie the banks, saving taxpayers around ~$7B/year.
  - jonknee 11y ago
    Yes, hence why I said: > Post 2010 the loans are issued by the government so you cut out the middleman taking all the profit.

rhino369 11y ago

If you have federal student loans this is shitty advice. The loan payment programs are very generous. 10% of your income (minus 150% of the poverty level), which is probably more like 0-7% for most people, each year. If you default, hit your credit, and get your wages garnished, you'll be in a worse spot.

deleted 11y ago
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chimeracoder 11y ago
> If you have federal student loans this is shitty advice. The loan payment programs are very generous. The author appears to have private loans, which are much more burdensome than federal loans for the debtor[0]. This is why federal loans are said to be subsidized and are counted as financial aid, even though people sometimes complain that it's "not really" aid because you have to pay money back. It's aid because the rates are well below market rate, which means the government (acting as a bank) would expect to make a loss on all loans issued, as the number of people who default would outweigh the amount of interest collected on the remaining loans. [0] Also, only undergraduate loans are subsidized - graduate loans are not usually (never?) subsidized.
- leereeves 11y ago
  What's the real risk of loss on student loans? The people I know who defaulted all paid in the end, plus interest and penalties.
- jonknee 11y ago
  The private loans were still backed by the feds which is why the DOE was coming after the author. Writing student loans was a nice guaranteed profit for a while (it changed in 2010 when they started cutting out the middle man).
- TomSawyer 11y ago
  > the government (acting as a bank) would expect to make a loss on all loans issued, as the number of people who default would outweigh the amount of interest collected on the remaining loans As far as I know, you can't get out of paying a federal student loan even if you file for bankruptcy.

JoeAltmaier 11y ago

Self-indulgent me generation, using sophistry to justify defaulting on a loan. Because, mostly, he didn't want to work for a living. First-world crybaby.

MisterBastahrd 11y ago
He's a baby boomer. Your statement seems accurate to me.
- 36bydesign 11y ago
  Let them rot in the rubber vacuum of hell.
gregd 11y ago
This is such patently absurd rhetoric, that it almost doesn't deserve a response. Almost. I took out student loans right out of high school because I was raised by a mother who lived on welfare most of my life. I saw a college degree as the ONLY way for me to end the cycle of poverty that I grew up in. But what I didn’t count on was paying an absurd amount for out of state tuition and despite being in forbearance, the loans accumulated interest. So my $30,000 in student loans has blossomed into approximately $60,000 (even with a bankruptcy), with little to no hope that I’ll be able to ever pay it back. I will die with student loan debt and it’s ridiculous. People who don’t understand the cycle of poverty in this country, like to throw around terms like “entitlements” or “self indulgence” or “lazy” and it’s bullshit. Quit applying your situation to every other situation in existence. If anyone in this thread is self indulgent, it’s you. Colleges set you up for failure. They are money making machines who whose main purpose is garnering new students at whatever cost. Most are not interested in your success (in school). Most aren’t even interested in the quality of your education. Our country needs to wake the fuck up and realize that a quality education, free of encumbrances, is the only way that we’ll ever make this world work. Knowledge is power and the fat cats in power are so afraid of empowering everyone with knowledge, that they have made the entire system into a house of smoke and mirrors. There is a plethora of resources available to everyone. Life isn’t a zero sum game. There is plenty to go around and we should all share in the benefits.

davidgerard 11y ago

Favourite quote: >But I have found, after some decades on this earth, that the road to character is often paved with family money and family connections, not to mention 14 percent effective tax rates on seven-figure incomes.

e40 11y ago
I know a lot of people without any of those that have a lot of character.
- davidgerard 11y ago
  Your comment may be a response to the quote in isolation, but isn't really one to the quote in the context of the article.

dataker 11y ago

The issue with student debt is critical, but one can't take these individuals as solely victims. I went to a cheap state university and got a degree in CS. I had no debt after 3 years and my income is higher than average. If I had gone to an expensive private liberal arts college, I wouldn't have the same outcome and could be a victim of the process. Students must recognize they are also reaponsible for their debt.

leereeves 11y ago
Why punish students who believed the marketing instead of punishing the schools and professors who sold students a degree that isn't worth the cost?
- jknightco 11y ago
  Because the students chose to pursue that degree. They're the ones who signed the debt paperwork, they're the ones responsible for making sure that decision was worth it.
  - leereeves 11y ago
    And isn't the school also responsible for its actions?
    - gregd 11y ago
      You will never get those that believe that the poor are "lazy" to admit that they're easy prey for student loans, payday advances and high interest loans.
      - gregd 11y ago
        That's great. So some assholes are following me around and downvoting me for having an opinion. If you disagree with what I'm saying, how about having the gumption to argue your fucking point?
    - 11y ago

imaginenore 11y ago

Wow, his only justification is he didn't want to work to pay back the money he owed. What a shitty person.

orangecat 11y ago

Maybe the problem was that I had reached beyond my lower-middle-class origins and taken out loans to attend a small private college to begin with. Basically, yes. Lots of people who are better off financially than this guy somehow go to state universities and survive.

themartorana 11y ago
Right. Top tier educations are for rich kids only.
- muzz 11y ago
  Top tier education at places like Stanford and Harvard actually entails $0 tuition for students from lower middle-class families

lookup 11y ago

Opinion: No character is built on quitting and lack of forethought. This generation needs to be wise enough to take a proper loan with the idea of paying for it. Times are not like they used to be.

jacobparker 11y ago
> This generation checks Wikipedia > Lee Siegel (born December 5, 1957)
- lookup 11y ago
  Agreed, let's just hope that THIS generation (millenials) need to understand the outcome of applying for a loan much more than the former.

robogimp 11y ago

It takes courage to admit that you are in the dirty default club, good on him. I am in the default club too, here's why: In my country the two options after highschool were either to pay through the nose in student fees or not get an education, wind up in a shitty job. I chose the third way of taking the loan, getting a first class education then living in exile. The baby boomers got a pretty sweet deal when it was their time to be educated but I don't think there is a great conspiracy to defraud our generation. There is however defiantly a rampant political shortsightedness as evidenced by many nations de-prioritizing education so as not to piss off retiree voters. When a such a large generation votes along self interested lines the resulting society is obviously warped to meet their needs, which aren't necessary the needs of the nation at large. I bet the current gilded era of retirement will be long gone before we get there. Education is of immeasurable value to both the individual and to society, politicians are blind if they cant see that. I agree with the spirit of this article; that it's up to us to educate ourselves by any means necessary.

davidgerard 11y ago
I dunno. Notice how education became really expensive once the people who got it free got into power.
crdoconnor 11y ago
>The baby boomers got a pretty sweet deal when it was their time to be educated but I don't think there is a great conspiracy to defraud our generation. The elites ruling over the boomers were terrified of domestic communists. They talked about defrauding their generation whe they were young (rolling back the new deal, etc.), but they felt too threatened to actually do so. The elites of today do not feel threatened.
- fnordfnordfnord 11y ago
  >The elites of today *The Boomers
  - crdoconnor 11y ago

melling 11y ago

"Maybe the problem was that I had reached beyond my lower-middle-class origins and taken out loans to attend a small private college to begin" I had to borrow almost all the money to go to college a couple decades ago. I went to an "affordable" state school. I screwed up my student loans by not following up while in grad school and ended up defaulting too. However, once I got a job, I paid hundreds of dollars extra every month and paid off my loans in under 4 years. I missed out on a few vacations, bought a $1000 vehicle then drove it until it started falling apart. Anyway, once a generation decides not to pay off their loans, the following generation won't get a way out of lower income. Don't go to that expensive small private college, if you can't afford it.

chiaro 11y ago

I think the system we have here in Australia, is terrific. Students accrue a debt to the government, covering tuition, but no payments are necessary on this until you attain a certain income threshold. Right now, that's A$53000 of which 4% is taken to repay (increasing with income). If you make less, you're not financially burdened. Furthermore, no real interest will be applied with the principal simply keeping pace with inflation.

solve 11y ago
Wow, sounds like an actual alignment of incentives.
- baddox 11y ago
  How so? It sounds to me like it would incentivize going to university and choosing a degree regardless of the likelihood of that degree being a financially wise decision in the long term.
  - gregd 11y ago
    Why does a degree have to be financially wise? Do people become social workers for the money? Do teachers get into teaching for the money? Where would you be if everyone in existence chose a degree simply for being financially wise?
    - notacoward 11y ago
      Excellent point. I'd also add that it's important to look at this from the giver's (i.e. government's) perspective. It's beneficial for society if everyone is educated. Yes, there will be some who take the opportunity and do nothing with it to benefit either themselves or others. There will also be some who use it not only to enrich themselves but also to enrich society and even improve the economy. If the "hits" outweigh the "misses" then it's a good investment overall. Much like VC, in fact. Most startups fail, but a few succeed to a degree (heh) that makes up for it. Sometimes it's worth taking a risk on people.

fixxer 11y ago

It will be interesting to see where education ends up in the narrative for 2016.

seba_dos1 11y ago

I'm an European and I cannot grasp that education system in US. Granted, most of my knowledge comes from rants like John Oliver's or this one, so I guess it's hardly objective, but it looks like a pile of the worst possible solutions gathered together just to screw up the highest number of people. A few days ago there was also an interesting article here about US students discovering that they can go to Germany and have a high quality education without going into any debts. How is this system supposed to work well? It seems to be clearly designed to make money, not to educate people, which doesn't seem like a good way to enhance and maintain your society.

gregd 11y ago
*It seems to be clearly designed to make money, not to educate people, which doesn't seem like a good way to enhance and maintain your society." You are absolutely correct. Our educational system sets you up for failure. There is no vested interested in your success. We pay teachers a shit salary, in some cases it's not even a living wage, and we expect 99% of the population to accumulate tremendous debt, simply to get a college degree. There is a very slight chance that you'll be successful with that degree, if you went to the right college, if you got the right degree, if you finished in the proper amount of time, if...if..if. You're screwed if any one of those legs turns out to be not right.
jodah 11y ago
It's refreshing to see the occasional reminder, such as yours, that our situation in America is unusually bad. > How is this system supposed to work well? It seems to be clearly designed to make money, not to educate people, which doesn't seem like a good way to enhance and maintain your society. It does work well, for certain interests. But it's the same for almost any important financial concern in America. Taxes, utilities, medical care, retirement funding, most of our important systems are intentionally structured to fatten the wallets of powerful interests at the expense of maintaining society. And it's only getting worse, as the trade deals currently under negotiation clearly demonstrate.
a3n 11y ago
I'm an American and I cannot grasp America.

aNoob7000 11y ago

The student loan system in the United States is broken at both ends. The students have no incentive to shop around and keep costs down while going to school. The companies that loan money to students don't really look at whether or not they are a good risk. As painful as it may sound, I personally think that you should only be loaned a certain amount of money based on the degree you're getting and potential earnings in the future. If companies wish to loan you more money believing that you're good risk and charge you a little more interest along the way, that's fine, but you could also end up defaulting on your loan and the company could lose out on their bet. Their needs to be accountability and risk on both sides of this transaction. My two cents worth....

dman 11y ago
I dont understand this sentence at all - "The students have no incentive to shop around and keep costs down while going to school." . There is a direct financial incentive to shop around and save on the cost of an education, which in most cases is one of the larger financial outlays in a persons life.

chrisrudy502 11y ago

I'm reading a lot of "You should be smart enough not to have made the decisions you did when you were 18. Stop having made those decisions." While you are blaming Class of '94, Class of '19 is signing papers. Stop them.

beering 11y ago
I think that, fittingly, educating high school students about the financial aspects of college, choosing a major, taking out loans, etc. would go a long way. You can try to reform the system, but it'd probably do a lot of good to prevent more financial wrecks in the meantime.
- themartorana 11y ago
  I would predict that doing so would become a political issue, since educating young people could have a negative impact on corporate bottom lines. The less experienced and educated, the easier to take advantage of.
- jodah 11y ago
  Problems at the high school level are, not coincidentally, linked to what we're discussing at the college level (that is, they are the result of unusual structures imposed by moneyed interests). I think the best way to prevent financial train wrecks from misaligned incentives is to realign incentives. A post above about the Australian student loan system is a good example of what this could look like.
- makomk 11y ago
  High schools are already educating their students about taking out loans. In fact, they're being paid really well by the loan providers to teach their students that they should take out loans for college. The problem here is that the incentives aren't aligned - their ex-students getting mired in student debt a few years down the line doesn't cost them anything, but replacing the mandatory sales pitches for student loan programs with proper financial education would.

88e282102ae2e5b 11y ago

I wish people would stop regarding liberal arts degrees as anything other than the most expensive form of entertainment.

gregd 11y ago
Why aren't we asking why this is even a degree? It's not an expensive form of entertainment, it was designed as a fallback mechanism for the college to make money.
- gnoway 11y ago
  Well, at the school I went to (and did not graduate from), CS was offered through the College of Liberal Arts and Sciences. Along with Mathematics, Chemistry, Economics, Biology and several other useful disciplines. Liberal Arts is not a codeword for 'interdisciplinary studies'.
  - 88e282102ae2e5b 11y ago
    I use it as a blanket term for history, English, literature, philosophy, foreign languages, art, American studies, etc. Anything non-technical. I'm surprised your school was organized that way.
MisterBastahrd 11y ago
I wish people who know nothing of liberal arts education would stop dismissing it outright. It makes them seem petty and foolish. We need experts of all types in this world, not just nerds stuck behind a keyboard.
- Vraxx 11y ago
  Not necessarily disagreeing with your core point, but your point about needing experts of all types in the world would be better served without a type of expert outright.

beering 11y ago

> Or maybe, after going back to school, I should have gone into finance, or some other lucrative career. Self-disgust and lifelong unhappiness, destroying a precious young life — all this is a small price to pay for meeting your student loan obligations. So author assumes he shouldn't have to work a job he doesn't like, even temporarily, to pay back all the money he borrowed? It would have destroyed his precious young life? WTF?

ekianjo 11y ago

> the government would have to guarantee a college education The role of government is not to have everyone enter and finish college. You need people with other (less qualified yet as important) jobs, too.

fnordfnordfnord 11y ago

When some business venture goes sour and the entity responsible decides to cut bait in order to save the rest of their business, that's usually considered by most to be a good thing, a wise, if unfortunate business decision; there is always risk in business, right? They saved their other investors' interests and their business lived to fight again another day. They made the best of a bad situation. When an individual does the same thing with a mortgage or with their student loans, it's a moral outrage. The default-ors are shamed socially, and thrown to often lawless wolves, (debt collectors) nobody wants to defend them against the reprehensible behavior from even the worst of these debt collectors becuase they can't pay, and because they 'deserve' shaming because they are 'deadbeats'. The same kind of social pressure can't/won't usually be applied to the 'deadbeat' business though. That kind of publicity might harm the their ability to repay their other creditors, keep paying staff, etc. Student-lenders want the profit without the risk. Given the manner in which American colleges have been turned into profit-centers, I am not sympathetic to their problems. I'm in agreement that a mass-default and hastening of the collapse of the current student loan status quo would be a good thing for students and for higher-ed.

gregd 11y ago

When I first attended college back in 1985, I was shocked at the number of institutions who camped out in the student union to hock their cheap plastic trinkets if you would just fill out this credit application.

notacoward 11y ago

There's a lot of rationalization and sophistry in that article, but this was the most egregious: > Self-disgust and lifelong unhappiness, destroying a precious young life Even if we accept all the rest, this part is ridiculous. There are plenty of jobs that pay better than writing and don't induce self-disgust, and even the worst jobs generally aren't likely to destroy a lifetime. Plenty of people endure a few years e.g. of military service, even though they don't enjoy it, and then move on to completely different things that they find more fulfilling. The author seems to think that nothing other than writing is an acceptable career choice, and that he has an absolute entitlement to such a career. What total bollocks. There are plenty of problems with our college-loan system, but the fact that Lee Siegel can't make good choices is a problem only with Lee Siegel.

gregd 11y ago
It's relatively easy to sit on the sidelines of someone's life and compare the choices they've made, to your own, especially when we're aware of the consequences after the fact. What isn't so easy is to admit to yourself, that not everybody has the same choices available to them as you.
- notacoward 11y ago
  Oh, I'm well aware of that, but thanks for the ad hominem. I came from a background no more privileged than his. I had to make some hard choices, which among other things is why I don't even have a degree. I'm sure Lee Siegel had different opportunities and different aptitudes than I did, but those don't seem to have been the dominant factors here. Even with those opportunities and aptitudes, a better attitude would have allowed a better outcome without the need for a loan default. He wasn't willing to compromise on his choice of college or his choice of a first job. Other people who do make such compromises often do just fine, and eventually get into the career they wanted, despite an equal level of opportunity or aptitude. It's unfair that some people have to make such compromises while others don't. I've written plenty about that. Nonetheless, those who choose poorly deserve no sympathy from those who were faced with the same or equivalent choices and still managed to do the right thing.

kenjackson 11y ago

Why not attend community college for two years and then state college for two more? The financial burden would seem much lower. Why attend an expensive private school if you can't afford it, unless that school is offering something that is clearly worth the cost delta.

jodah 11y ago

A lot of commenters are zero'ing in on the author's experience, and I think they're missing the broader point. It isn't about what the author should have done, it's about a system of financial aid and rising educational costs that is broken, and that irreparably punishes people like the author for making mistakes while letting others off the hook. Depending on how you look at it, he was meant to fail all along (principal + ballooning interest = more profit, right?), and that is the point.

Smushman 11y ago

Debt, particularly student debt, is a loaded issue. So at the risk of karma, I am posting. In the history of the US there has never been a time where it is easier to take on debt. There has been so much tampering with the natural order of the financial system that many natural checks and balances have been altered, levitated, and in some cases nearly removed. Please bear with me here, this is not an anti-government screed. In 2007, per Federal Reserve Flow of Funds; Household Debt to Disposable Income reached 138%. There are also many other data points that show that since around 2006 we reached economic outlier territory. For comparison, in 1964 this number was just over 65%, and in 1991 was just over 80%. So it kind of went up like a rocket. Their information shows some normalization since 2009, but there is grey area there as they began adjusting their methods of measurement when they varied so far out of norm (in their defense this is what any good statistician would do). Even if you have no doubt in those measurements though there is a solid area of outlier in almost every financial measurement of activity since ~2006. This was actually the Fed Reserve goal, so they were successful in what they set out to do. The issue is that money is inextricably tied to national and individual personality. There will be knock-on effects there, and those aren't or can't be measured. In summary, and reaching my point, I would say that this person was one of many victims that the Fed knows will occur on the way, while making things overall better for the many. His personal response to that event is also IMHO normal. I would do it myself if I could (I have over 80k in student debt). That said, in all economic measurements, there is no account for changes in attitudes towards bankruptcy. In fact, bankruptcies are considered a static number in financial equations, X per year, with some variance as the availability of borrowed funds increases. Therein lies the rub. It is really not possible, or at least extremely difficult, to account for knock on effects that may be deleterious to attitudes. I would suppose this is why they don't include those; they are either considered side cases and too small to account for or like in the case of attitudes towards bankruptcy, not possible to measure. It is perfectly reasonable to fix things that seem broken. It is not realistic though to make changes in vital things like money with measurements taken in a vacuum. Particularly in things so deeply tied to attitudes and personality. Final words, if you can't measure it but you still know it's there, you must make sure you do not affect it. We are too far in human history now and know too much to continue to pretend that changes in critical things don't make a difference except in measurable and temporary ways.

markbnj 11y ago

The one thing that can be reliably expected from any debate of this kind is that those who fall on the fortunate side of some line between a good outcome and a poor outcome will be all about personal responsibility and making good choices, and those who fall on the other side of that line will be all about injustice. I don't really give a shit how hard you worked to become a well-compensated software engineer. It was still mostly luck. You were lucky to be born at the right time, lucky to have a brain that works the right way, lucky to have access to the tools and materials you would need to learn, lucky to have time to learn them, lucky to have a stable-enough environment in which to learn them. Lucky, just like me. I've been a well-compensated software engineer for three decades. Even more lucky in my case because I was on track to be a journalist and the only reason I do what I do now is that my parents sent me to a school where I happened to stumble on a mainframe I could play with, and later bought a home computer I could continue to learn on. I had nothing to do with either decision. It was just luck. Before you judge the outcomes that others have to deal with, and the paths by which they got there, you should think back on your own and consider all the little inflection points in your life that you had nothing at all to do with. That exercise should be enough to whack a couple of inches off of your estimation of your own merit and entitlement. And one last thought: perhaps the most damaging effect of the very high cost of education in America is that it means we can only have one kind of education: the kind that results in making a lot of money. All the other kinds of value seemingly have no value. We don't need artists, for example, because most of them won't make enough to pay for an education. Ditto philosophers, writers, most teachers, many scientists, etc. If you were a parent now, as I am, and considering colleges for your child, as I am, how could you possibly encourage him or her to attempt to study the arts or sciences at a first-class school? The odds of ever being able to pay back those loans in those professions are small and dwindling. The arts and sciences will, I think, end up as the hobby careers of the children of rich families who can afford to pay for school out of pocket. Maybe it's always been more that way then not, but I can't help but contrast our approach to that of Denmark or Germany, where everyone goes to school at no or low cost. Which society is more likely to make the most of it's human potential?

littletimmy 11y ago

When the social contract is not working for you, there is absolutely no reason to honor it. The student loan system is a predatory system that practically forces young people into debt. The upside is not comparable: schools in the US are not That much better than any other developed country, and most of those countries provide an undergraduate education for free. Even Oxford and Cambridge, comparable to the top undergraduate education in the US, are only $14000 per year for UK students. The terms are draconian, and practically enslave a student into indentured servitude. It is not hard to think that serves (as Chomsky calls it) a disciplinary measure to stop students from being too independent. What I'd like to see is EVERY student in this country refuse to pay student loans. Just fucking refuse. Let the lenders collapse, it would serve them right for making predatory loans.

irishcoffee 11y ago
> Let the lenders collapse I think 2008 proved that this won't happen.

schizek 11y ago

Author finished a Ivy League, Columbia University and write for Times but refuse to pay back loan that gave him all that?? I have no words for this person. In economy nothing disappear. If he didn't payed next generation will. Increasing cost of education is mostly because some lousy liberal arts graduates choose to cheat their way.

abrown28 11y ago

I think he's a contemptible ass. His mother is the cosignor on the loan. I would work my ass off to pay that back rather than let the negative effects of defaulting land on my mother.

zaroth 11y ago

Personally I know that college was a complete waste of time for me. I gained very few skills in the classroom I would not have picked up myself, and have zero need for the credential. Sure, I wouldn't mind getting the $100k I spent back. But it was a choice I made based on the information I had at the time. I also am pretty certain that from a macro standpoint it's obvious that American universities are doing something very right. I hear the frustration in many of these comments and the desire to rant, but hyperbole doesn't really make for interesting discussion. American universities and colleges are not universally bad, they do in many cases actually succeed in providing a valuable education, 99% of the population does not in fact accumulate tremendous debt simply to get a college degree, etc. As for student debt in general, I personally think of it as just another variable tax rate on the middle class. The middle class is absolutely strangled by progressive taxes, and FAFSA is just another cog in the machine to claim $0.95 of every dollar you earn from $30k to about $120k of MAGI. What is the solution? Who is John Galt? In many cases the correct answer is to just stop earning regular taxable income beyond about ~$30k MAGI. Suddenly your health care is free, your groceries are free, your kids college education is free, and your tax rate is negative (Treasury sends you the checks) and you certainly won't be servicing that old student loan either. I'm not saying to stop contributing back to society, I'm just saying, consider stepping off that squeaky spinning wheel first. Any progressive system, by definition, will have parts of the curve where marginal utility is reduced. Some people (apparently like the author of this op-ed) manage to step directly into the worst part of this curve, which at many points demand in excess of $1.00 for every incremental $1.00 you earn. Very few people have even a basic understanding of the tax code and social welfare programs of the U.S., so it's impossible to expect people will make "good choices" under the current system. It's unnatural for someone to realize that job they are working feels like it's paying a wage, but over 10 years actually costs significantly more than it pays! This is all a result of the current system of which nondischargeable student debt plays just a small part. The most annoying part of the article is that it appears the author actually found the solution, but just continued ranting like the solution didn't exist, and didn't bother explaining the actual mechanics of it so people might actually learn from it. It's also worth pointing out the author is not a current student (not dealing with the current system which is much different) but living with loans from a past era. The part about mom co-signing the loan, for example, was a huge red flag.

nhangen 11y ago

I could not afford my loans...I was basically unemployed (looking for work) with loans on permanent forbearance. It took a 4.5 year stint in the Army to pay mine off (student loan repayment program), but I did, and I'm all the better for it. I have zero sympathy for this person.

zzalpha 11y ago
Not questioning your decision at all, but I'm curious, you say you're "all the better for it". How? Better because of the experience of paying off your debt? Better because of your experience in the military? Both? Something else? I mean, I've certainly paid off my fair share of debt in my lifetime (fortunately, where I live, tuition isn't nearly so astronomical, so my student debts were modest and everything subsequent to that has been manageable consumer debt), but I'd never have considered debt repayment a personal growth opportunity.
- nhangen 11y ago
  I didn't join the Army for the sole purpose of having my loans repaid; it was just icing on the cake. I also received a sizable signing bonus, and was able to convert my degree into an automatic promotion to E4 (Specialist instead of Private). The Army gave me the discipline I needed to convert my passion into business opportunity, and allowed my family and I to build a solid foundation for the future.
  - zzalpha 11y ago
    Sooo... you have zero sympathy because they didn't decide to join the military like you did? No offense, but to assume all people should make the same life decisions you did, and to hold no sympathy for those who don't, is pretty myopic. Believe it or not, not everyone can or should join the army to solve their financial or personal problems.
    - nhangen 11y ago
      You're being ridiculous and taking my words out of context. I'm not suggesting everyone join the Army; I'm suggesting that they do the right thing and pay their debt, regardless of what it takes. For me that meant joining the Army. For others it could mean something entirely different.

GeorgeOrr 11y ago

There's been a lot recently about the explosion of tuition burdens. And the ways in which the student loan system is mostly setup to benefit the banks (and to the Feds it's also a positive revenue source). Is this a sort of step towards civil disobedience? If enough people took this step, would the system change? For the better? Although I do wonder if the system would change quicker if people refused the costs, refused the loans and made it without higher education until things are reformed. Neither path is very smooth for the person doing it. Not sure if either will help change things.