Writer: "Why I Defaulted On My Student Loans" 1032
schwit1 writes: There are some valid points raised in Lee Siegel's 1,100 word rant against college loans (if not so much against college education). There are also some bad ones. But two things are clear: the words "personal" and/or "responsibility" were used precisely zero times. Siegel, who described himself as "the author of five books who is writing a memoir about money," is hardly a glowing advertisement for the return on nearly a decade in university just to achieve a Master of Philosophy degree.
Siegel says, "As difficult as it has been, I’ve never looked back. The millions of young people today, who collectively owe over $1 trillion in loans, may want to consider my example. It struck me as absurd that one could amass crippling debt as a result, not of drug addiction or reckless borrowing and spending, but of going to college. ... The rapacity of American colleges and universities is turning social mobility, the keystone of American freedom, into a commodified farce. 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. Instead of guaranteeing loans, the government would have to guarantee a college education."
Siegel says, "As difficult as it has been, I’ve never looked back. The millions of young people today, who collectively owe over $1 trillion in loans, may want to consider my example. It struck me as absurd that one could amass crippling debt as a result, not of drug addiction or reckless borrowing and spending, but of going to college. ... The rapacity of American colleges and universities is turning social mobility, the keystone of American freedom, into a commodified farce. 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. Instead of guaranteeing loans, the government would have to guarantee a college education."
Social mobility was killed, but not this way (Score:5, Interesting)
Re:Social mobility was killed, but not this way (Score:5, Interesting)
I have to question anyone who gets a BA in Philosophy and can't find a job thinks that getting a PhD or Masters will some how improve their odds of getting a job. So while I might be in favor forgiving loans on Bachelor's degrees, I don't agree that loans for post-grad should be forgiven or allowed to be defaulted. You're a kid when you enter college, but an adult when you enter grad school and should accept that responsibility.
Re:Social mobility was killed, but not this way (Score:5, Insightful)
Any degree worth getting can easily repay itself. 1) Get a useful degree, 2) Go to a state school, 3) Quit the narcissist entitlement mentality.
Education has the best ROI, but like any investment you still have to watch how and what you invest in.
Re:Social mobility was killed, but not this way (Score:5, Insightful)
Unless of course, you think that only the wealthy should be able to learn anything about art history...
Re:Social mobility was killed, but not this way (Score:5, Insightful)
That's all well and good. But, while you're getting an education, you need to learn the facts of life. Facts dictate that spending hundreds of thousands of dollars on an art education is probably not going to pay off in the short or the long term. If you can't understand that, then you cannot claim to be educated at all.
Re:Social mobility was killed, but not this way (Score:4, Interesting)
Re:Social mobility was killed, but not this way (Score:5, Insightful)
At this point in time, it is becoming more and more possible to get the equivalent of a university degree without going through the university system, and this is a great thing. I agree with you about the idea of "getting an education" vs. getting vocational training.
I have a Bachelor's Degree in Computer Science which enabled me to have a nice career and was definitely worthwhile financially, but I also recognize the incredible value of a general liberal arts education in terms actually knowing something useful, but which doesn't directly translate into a marketable skill. Some of my most valuable classes weren't related to my major.
The United States in particular is suffering greatly from an electorate that is woefully ignorant of the history of the Republic, and that of Western Civilization and the philosophical and scientific developments of the last two millennia (and more). This is complete omitting another problem which is the increasing political bias of universities and what they teach, but you're right about one thing. My computer science degree wasn't an "education" by itself, only part of one. However, given that university education costs have risen more rapidly in recent years than anything else in our economic oeuvre, including healthcare, shows that something is really wrong with the system, and some serious checks and balances are needed, specifically in terms of real competition.
That said, at the end of the day, I would never consider that a history degree or a philosophy degree or an English degree would leave you in a position to be able to easily get a decent job, compared to STEM- and business-related degrees, and no one can ignore those economic realities.
Re: (Score:3, Funny)
Re:Social mobility was killed, but not this way (Score:5, Insightful)
However, given that university education costs have risen more rapidly in recent years than anything else in our economic oeuvre, including healthcare, shows that something is really wrong with the system, and some serious checks and balances are needed, specifically in terms of real competition.
The price of a college education -- let's just say 4-year bachelor's degree -- isn't the problem. Rather, it is a symptom of both the ability to get a large student loan, and desire for a traditional, 4-year degree.
As an analog, consider the housing market: The value of a house is what someone is willing to pay for it, and what someone is willing to pay for it is a factor of their assumption about its future value and their ability to fund the purchase with money they don't already have.
I graduated college with no student loan debt; however, I sure would like forgiveness on my house that is worth 10% less than I paid for it. Do I deserve it? No. I chose to put on the rose colored, things will always be worth more in the future glasses.
On Shopping Around (Score:4, Insightful)
The price of a college education -- let's just say 4-year bachelor's degree -- isn't the problem. Rather, it is a symptom of both the ability to get a large student loan, and desire for a traditional, 4-year degree.
As an analog, consider the housing market: The value of a house is what someone is willing to pay for it, and what someone is willing to pay for it is a factor of their assumption about its future value and their ability to fund the purchase with money they don't already have.
No, not all homes are equal, nor are school tuition rates. There are a relatively small number of multi-million dollar mansions, but apartments and inexpensive homes are plentiful.
The article is more like someone complaining that a Ferrari is expensive and refusing to consider the thousands of other lower-cost options.
Too many people look at costs of a single school. There are a huge number of schools, Wikipedia saying 4,726 in the US. The median cost of schooling across all schools is $5,832 per year, which is quite reasonable. Half of them cost $5,853 per yer or less. Yet the mean is $23,874 per year. Assuming you are comfortable with statistics, those two numbers mean the bulk of schools are inexpensive, and a small number of hugely expensive schools cause the average cost to skew quite high. As a parallel, it is like a middle-class neighborhood with a small number of billionaires who moved in; those few high-value individuals will dramatically shift the average wealth in a neighborhood to so the "average wealth" means everyone is a millionaire even though nearly everyone is middle class. The median cost of higher education is reasonable. Just be smart and pick a school you can afford.
Locally, my kids can go to one of several good junior colleges nearby which all cost about $1500 per semester, then move on to one of the several state universities that cost around $3500-$4000 per semester. So about $25,000 total for the four years of education. I note that for my region at least, Wikipedia lists 11 inexpensive 2-year colleges and seven state universities, all within commuting distance. Or my kids can go to one of the local private for-profit schools the whole time. One popular private school charges just shy of $20,000 per semester. That is, one semester of the expensive (but heavily marketed and popular) for-profit private school is the same rate as a full four year degree elsewhere.
I look at the author of the article, Lee Siegel, that Wikipedia says attended Columbia University. That school is a private ivy-league school currently and charges $51,008 per year. We could get two students all the way through their bachelors degrees with the funding for a single year at that school. And he went there for probably seven years. So he probably was committed to roughly $350,000 in costs when he could have chosen a similar education at one tenth the cost or less.
So really, this is is not so much a complaint about the cost of schooling generally. He is complaining that everyone should have a Ferrari they cannot afford, even though for most people one tenth or less the cost, getting a Prius or Accord or Corolla is both affordable and adequate.
Re:Social mobility was killed, but not this way (Score:5, Interesting)
A friend of mine ended up going to a 3rd-rank, state-supported college because it was cheap. After graduating with top honors, he got a scholarship to Cal Tech and earned a doctorate in computational chemistry, completely free of debt. He now manages a group of scientists at a national lab. Picking the college based on affordability didn't ruin his life.
Re:Social mobility was killed, but not this way (Score:4, Insightful)
I am suggesting that getting an art history degree should not cost hundreds of thousands of dollars. And I do not fault anyone for trying to get an education.
Getting an art history degree does not cost hundreds of thousands of dollars. Certain art history degrees do, but that doesn't mean society should pay for any expensive educational endeavor a 20 year old wants to try. Education is an investment, even if your only planned returns are self improvement. And if that is the case, it should be treated as more of a vacation which you should make sure you can afford before you venture off.
Re:Social mobility was killed, but not this way (Score:5, Insightful)
I am suggesting that getting an art history degree should not cost hundreds of thousands of dollars.
It doesn't. In state tuition at most public universities are around $10k. So for a four year degree that is $40k. I paid more than that for my car. Financial aid is widely available, so many people pay even less.
You can pay $100k for an art history degree, but you certainly don't need to.
Re:Social mobility was killed, but not this way (Score:5, Insightful)
The hundreds of thousands of dollars are a part of the problem. There is no reason a bachelors degree should cost that much regardless of the institution you go to, and regardless of whether it is in computer science or art history. The loans themselves aren't the problem, aside from enabling the actual problem - that tuition costs are being allowed to grow without bounds. There is no reason a bachelors degree that costs as much as a house should be simply waved off as "a fact of life".
Re:Social mobility was killed, but not this way (Score:5, Insightful)
Um not the loans are EXACTLY the problem. Tution grows without bounds because everybody smart enough to graduate from college does recognize it has great value, both in the direct economics of employable and the more intelligible things like connections with other people you make and knowledge and thinking skills that really will enable you to make better more informed decisions in the future.
A college education IS VALUABLE, exactly how valuable is difficult to quantify. So now you make large sums of unsecured monies available to young people many of whom have never seen or worked with an account balance that large before and surprise surprise they are willing to spend it. They don't have an appreciate for how much work it might be to pay that back. What they do see is that Crazy Go Nuts University has a new fancy new recreation facility and bigger dorm rooms than Podunk College. Its difficult to compare the actual education quality but dorm and recreation facilities are things you can see. Podunk has no choice if they want to continue to attract students they have to build these things.
In order to build that stuff they raise tuition, which they can because people are paying with loans anyway and everyone qualifies!
If it was not for government secured loans college cost expansion would probably mostly track with inflation. After all with the exception of some leading edge research schools, almost all the cost would be salary if you take away the billion dollar construction projects.
Price insensitivity is the reason costs have gone up, if you can't afford CGNU's 40K tuition you might very well choose Podunk's $12K tuition and lack of fancy building and giant rooms if the alternative is no college for you. If we just got rid of Sally Mea and college loans need to be secured with some kind of collateral or simply small enough lender were willing to fork over on credit history alone, the problem would solve it self.
Meritocracy (Score:5, Insightful)
If we just got rid of Sally Mea and college loans need to be secured with some kind of collateral or simply small enough lender were willing to fork over on credit history alone, the problem would solve it self.
The problem with this, and to some extent student loans in general, is that now you are selecting university students based on wealth and not merit. If you don't have enough collateral to secure the loan - or your parents are not willing to take the risk - then you do not get to go to university no matter how intelligent you are. Society then not only potentially loses out on the next Einstein but also it also becomes less fair leading to all sorts of problems with social unrest.
There is also another issue which the UK is now facing having introduced massive tuition hikes and an increase in loans. Some essential jobs which require a university degree, like teaching, are suddenly experiencing a huge shortfall in new graduates. The reason is that a teachers salary takes decades to repay a large loan while someone going into finance can repay it in a matter of years.
This is why university education should be funded by taxes and the funded positions awarded to the best and brightest. Those who earn more will pay more for their degree through taxes while those whose earn less will pay less. The alternative is that society will need to start paying e.g. teachers a whole lot more money in order to attract sufficient numbers and to do that it will have to raise taxes so ultimately everyone will be paying anyway but in the meantime the affected professions will be in severe trouble.
Re:Social mobility was killed, but not this way (Score:5, Interesting)
Where are the parents?
...working their tails off, are stretched to the limit, are missing a spouse, or are otherwise unable to provide their little snowflakes a free ride at college (especially given the insane tuition costs at most schools nowadays).
I'm the oldest of eight kids... my parents paying for college was a non-starter, and yet 6 of us are college graduates (the other two decided on a different route, but one became a housewife while the other dropped out to eventually be a horse farmer... does rather well for himself).
On my part, I did a combination of the GI Bill, self-study (that is, CLEPing like crazy) while in uniform, and otherwise working as I went to school. I busted my ass and did without a lot of neat stuff (e.g. nearly all of my clothes and small appliance shopping happened at garage sales), but I graduated free of any college loan debt as a result. My siblings either took a similar route, or paid as they went at local community colleges (or in one case, Nursing School - she has a BSN now and commands a pretty healthy salary).
So yeah - parents? Dunno about yours, but not everyone's parents (assuming there are two parents - not always the case) have fat, growing college savings funds and a fat bank account. Maybe it's just that my generation (I was born at the tail end of the Baby Boom, my youngest sibling was born in the mid 1980s) was expected to have enough drive and skill to get that done on our own once we were old enough to vote.
Re:Social mobility was killed, but not this way (Score:4, Interesting)
You guys do realize there is a compromise, right?
Cap interest at inflation for Direct loans. And perhaps two years of free tuition (based on average in-state tuition rate at public colleges; 2.0 GPA or higher).
I'd also would want to look into not providing federal funding to schools which have over X% of tuition money spent on "administrative" purposes.
As for the author, I do question why he got a bank loan rather than a federal loan.
I know I shouldn't laugh, but he went to a private college. Of course that's going to be expensive.
In cases such as his, I think it would be better if we had an option to pay Y% of our taxable income for student loans over a 30 year period. That way, low income, no issue!
He says, "where I once had a nice stable job selling shoes after dropping out of the state college because I thought I deserved better". That's not part of a hypothetical, he did go to state college and drop out, right?
The part where he says, "The accrued interest, combined with the collection agenciesâ(TM) opulent fees, is now several times the principal." makes me wonder if he got a poisonous loan... one with high interest.
Re:Social mobility was killed, but not this way (Score:5, Interesting)
A) Degrees costing hundreds of thousands of dollars is insane, they shouldn't cost anything like that much.
B) Society needs variety. If everyone just did the best paying degrees there wouldn't be anyone left doing niche stuff. Not just supplying us with art and books/TV shows about art etc, but even less well paid but still important engineering and science jobs. In fact if you are looking to get rich then doing an advanced science degree and going into research probably isn't a good idea, but that's also how we get new materials and medicines etc.
More over, getting an education shows that you can study and work to a high standard. Maybe you go into a different field for work, but the fact that you have a degree at a minimum brings some diversity to your field and proves you can learn and improve on your own.
Re:Social mobility was killed, but not this way (Score:4, Insightful)
Fine.. then we should just close all university courses, except of course, for MBAs. Then we'll get the maximum ROI for our money and everyone will be perfectly happy.
Or maybe, as the OP said, money isn't the end-all of human existence.
Re:Social mobility was killed, but not this way (Score:5, Insightful)
I don't think that's exactly what GP said... I say this mostly because you can get a useful degree *and* learn something interesting at the same time if you do it right: Major in a profitable field, and minor in something that ignites your passions. It's more than possible to do *both*... it also allows you to pursue the minor as a hobby or side-gig until you either retire or you find something that pays you for doing it.
Philosophy, ${buzzword}-Studies, History, Archaeology, whatever... those are great subjects to *minor* in. Unless you have a fantastic gift that allows you to pursue such fields in academia for the rest of your life, or you can get published in them otherwise, they're worthless towards getting the loans paid off. You remember, that mountain of debt you bought into when you accepted those student loans?
And yes, unless you're sufficiently wealthy, you're still going to have to look out for your own future and use your education as an investment first and foremost. Life isn't fair, deal with it.
Any other route and, well, get used to being poor and in debt while you try and pursue some sort of living off of that Philo or Art History major.
Nobody owes you a living - this is just as much a truth for EE and Chem grads as it is for Feminist Studies grads.
Re:Social mobility was killed, but not this way (Score:5, Insightful)
But I have an ethical objection to considering universities as jobs factories. They are not. They never have been. If you want job training, you can go to a VoTech and learn a marketable skill and that will give you a much better ROI, if that is all you are concerned with.
I don't buy it that we can't afford to educate our young people. It is absolutely an attainable goal. You handwave it away by saying the world isn't fair. I agree. But that does not mean we should lie down and accept things that are possible to change. University of California used to be free. Think about that. And the same generation that benefited from free or near free college is remarkably callous towards students that suddenly need to pay $100k for a four year degree in-state. It doesn't have to be this way.
Re:Social mobility was killed, but not this way (Score:4, Insightful)
But I have an ethical objection to considering universities as jobs factories. They are not. They never have been. If you want job training, you can go to a VoTech and learn a marketable skill and that will give you a much better ROI, if that is all you are concerned with.
I agree. That's why I pointed out that you can certainly minor in something that isn't marketable.
There's a big diff between getting a well-rounded education, and trying to convert a degree in basketweaving into something sufficiently profitable to pay off the debts.
Re:Social mobility was killed, but not this way (Score:4, Informative)
So only kids with trust funds can study philosophy or art and get to be a museum curator or somesuch?
Nope, I said no such thing. What I said was that you should consider that the market for "museum curator"s is incredibly tight at best, so you'd better know the risks before you take on a mountain of debt in an attempt to be one.
Re: (Score:3)
Re:Social mobility was killed, but not this way (Score:5, Informative)
Why is higher education only useful for helping you making money?
It isn't ONLY useful for making money, but money is what you use to pay back your loans, so "making money" is ONE of the things your degree should be useful for, if you are going into debt to get it. Borrowing money to get a degree is philosophy is dumb.
I majored in engineering, at an in-state public university. I worked on weekends, and during the summer. The day I graduated, this was my total debt: $0.
Re:Social mobility was killed, but not this way (Score:5, Interesting)
Alternatively, if you don't mind having a low wage your entire career being in something as over-populated under-demanded as Art History:
If you went to a state school to begin with (the state pays typically HALF); and your parents weren't jackasses and actually contribute the expected funds (see Expected Family Contribution), you should be able to work part-time (or not at all) and have ZERO student loans at the end.
The only people taking out loans should be people with super promising careers (Doctors, Lawyers, child prodigies going to super schools), and people whose parents are cheap bastards who don't mind getting a tax break for their children and not using that money to pay for their children's college.
Re:Social mobility was killed, but not this way (Score:4, Interesting)
You shouldn't buy anything if you don't have a good idea how you are going to pay for it. If you can afford to buy an education just for the benefit of having one then fine.. more power to you! For most of us that is too much money to spend unless it is an investment towards a future career that can pay for it. That is why a university degree is for career building and not for personal development.
Maybe if people actually looked at the cost of their degree and made responsible economic decisions about how far they are willing to go into debt and what they can expect to make afterwards the demand for non-career building degrees would fall. Maybe then the price would fall until a person could afford to get it just because they are inerested.
"Unless of course, you think that only the wealthy should be able to learn anything about art history..."
No. I think in todays internet enabled age anybody can make themselves an expert in anything if they are willing to do the work. If you want to know about art history... go find out about it! I don't think you are entitled to having someone prepare and teach a series of classes for you just because you want it!
Re:Social mobility was killed, but not this way (Score:4, Insightful)
Why is higher education only useful for helping you making money? THat is not what it is for!
Tell that to my parents, and millions like them, who drummed it into my head that I would be digging ditches if I didn't go to university. This had been repeated to every generation since WWII. So excuse all of us for believing it.
They didn't tell me about laborer's unions and what licensed heavy equipment operators get, you know, the people who really dig ditches.
Which I would have enjoyed. Who the hell wants to be stuck inside all day?
Doing manual work was seriously looked down upon. But the plumber in our neighborhood had a huge boat with *two* inboard engines in it and a nice house.
And you can't outsource plumbing.
--
BMO
Re:Social mobility was killed, but not this way (Score:5, Interesting)
Interesting.. and yet the people who "invested" their money in this kid didn't insist on his getting a degree that would guarantee their ROI, now did they? They took a gamble, much like how you take a gamble when you go into a multi-year degree program just what will or won't win the economic lottery in the future.
Of course it's easy enough to sit on the sidelines and say Engineering! or something similar, except that's still not a guarantee and it ignores the person's individual proclivities. Not everyone is capable of or interested in being an engineer. Also why would you want all that additional competition, it'll just lower that industry's wages.
Re:Social mobility was killed, but not this way (Score:5, Insightful)
There's no gamble, student loans are guaranteed by the government. That's why everyone can get them, and that's why the cost of education has exploded.
Re:Social mobility was killed, but not this way (Score:5, Informative)
Not only correct, but I myself can't personally fathom how anybody comes out of school with a pile of debt. I spent about 7 years in college (three of those years were wasted on classes that I took for not knowing what I wanted to do, so it isn't as if I'm perfect) and I didn't borrow a cent. My bachelors is in IT management, and I got my degree by first going to community college (dirt cheap) and then doing online classes at the cheapest state university to finish the bachelors.
I'm presently making more money than everybody I know who went to the supposed best university in this state (ASU) and who also did get a lot of student debt, where I have zero. In fact after the grants I received I actually managed to come out of college with surplus cash.
Re:Social mobility was killed, but not this way (Score:5, Insightful)
Congratulations, I guess, but the so-called 'student loan bubble' or even this article isn't really about you.
See, what you went and did was BUY some QUALIFICATIONS relating directly to a MARKETABLE SKILL SET.
Getting a $80k degree from a private college for something like philosophy, elementary ed, english lit, or even 'psychology' (which requires a masters or doctorate to make any $) is basically choosing to put a financial noose around your neck.
The days of 'XYZ Bachelors degree' = 'automatic middle class income' are gone.
This is because for about 2 generations now the assumption was you either got dirty for a living or went to college and got a white collar job. If you could string 2 sentences together and do long division your parents told you that you JUST HAD TO go to college whether or not you really knew why. It was just what you did.
Now, everyone has done it, 75%+ of the degrees are worthless, cost of higher ed has far outpaced inflation, the government gave away 'free money' to get it, and now countless 20 somethings are basically screwed and no-one knows how to swing a hammer or use a tape measure.
Whoops.
When the last plumber dies, we're in deep shit.
Re: (Score:3)
I have to question anyone who gets a BA in Philosophy and can't find a job thinks that getting a PhD or Masters will some how improve their odds of getting a job.
A professor of Philosophy?
Re:Social mobility was killed, but not this way (Score:5, Interesting)
Actually, as the experts in education, the people offering a product that they claim is supposed to be so good for your career prospects, I think it somewhat is their fault if they didn't educate students about the decision they were making an encourage them to make better ones.
You are right, this isn't the cause of the problems with socio-economic mobility but, as the job market has seriously changed, and the real needs we, as a society, have for universities has change, the schools have failed to really change, and expectations about the schools and what they do hasn't changed as it should have, and, it is partially their fault.
Fact is, when my parents were in school, ANY degree was good enough. You really could go get a philosophy degree because the jobs were mostly mid level office jobs and didn't require skill so much as the ability to read and learn a bit....perfect for people who had learned how to learn and could all read. Didn't matter what they studied then.
Now, well, that philosophy degree qualifies you to teach philosophy and fuck all else. The value of the products they offer varies greatly, and they still pretend a philosophy degree even matters. Frankly, I don't see why they should even offer philosophy beyond an associates; its just not worth it to the point it counts as a scam really.
Re:Social mobility was killed, but not this way (Score:5, Interesting)
But ...
How do you fund your liberal college degrees such as "Woman's Studies" and "Ethnic whatever" if you don't have college loans to hype to those who want to get a dead end degree? And the Business degree types telling people to get STEM degrees because there is a shortage of qualified candidates, only to only hire H1B immigrants because ... well they are cheaper than American STEM degree holders.
College and big business is such a lie these days that your best bet is to go out, make your way in the world, and get educated outside the mainstream model. But then again, that might constitute a threat to the establishment and get you on some sort of government watch list, having the NSA and FBI watching your every move.
Re:Social mobility was killed, but not this way (Score:4, Interesting)
And the Business degree types telling people to get STEM degrees because there is a shortage of qualified candidates, only to only hire H1B immigrants because ... well they are cheaper than American STEM degree holders.
Imagine what sort of liability those business degree types would collect if they admitted publicly that they were deliberately breaking US federal law for years in order to hire H1Bs (you can only legally justify H1Bs on the basis that there's no qualified US residents for the position).
It'd be like tobacco company executives admitting that cigarette smoking is harmful for your health during the 70s and 80s.
Re:Social mobility was killed, but not this way (Score:4, Insightful)
What you CAN hold them accountable for is the outrageous cost increases that far exceed inflation and infrastructure growth.
You can, but consider that Uncle Sugar is literally throwing money at them in the form of free loans and grants... can you blame them for taking full advantage of that? I mean, people bitch at defense contractors and healthcare companies for doing it, but raise nary a peep at collegiate boards who have been doing the same damned thing all these years.
Re: (Score:3, Insightful)
then we should limit major choices, not bury young people in debt, unable to contribute to the economy (buy a house, car, etc.: manufacturing, construction, etc.) and instead it all goes into some bank ceo's pocket. how does that help anyone, besides ones plutocrat class sucking up so much and more and more each day. that doesn't trickle down morons, it just stays in a bank, while a middle class flush with cash spends most of it, actually generating jobs and a healthy economy
i don't really understand people
Re: (Score:3, Informative)
Sorry but all of the administration staff in ALL colleges are grossly overpaid.
Also the sports coaches are disgustingly overpaid.
Fix those two problems and then come back with your "college cares about the students argument"
Re:Social mobility was killed, but not this way (Score:4, Insightful)
The author went to college in the 80's (Score:5, Insightful)
Regardless of what has happened to social mobility in the last 30 years, it hasn't affected the author of this article because he is 57 years old. He went to college in the 80's when college was not nearly as expensive. I went to college at the turn of the century and even then it was cheap enough you could pay over half of your college expenses by working part time at minimum wage.
This guy is simply a sociopathic asshole who is just being provocative to get page views. He stopped paying his bills because he is an entitled prick, not because of the federal loan apparatus he is complaining about in the article. I have real sympathy for the problems younger millenials are having because of the rising price of college, and it is shameful for this author to exploit them like this.
Re:The author went to college in the 80's (Score:4, Insightful)
This was my reaction also. Siegel writes like a sheltered Millennial who has not yet experienced the need to make his own way in the world. We're sympathetic because we know how screwed today's young people are by those astronomical tuitions everywhere they go. But wait - he is actually a 57-year-old Boomer, nearing the end of his career. He was educated in a time when a student had to seriously intend to overpay for college.
So he has had a middlebrow, forgettable career being, according to his bio:
"...a New York writer and cultural critic who has written for Harper's, The Nation, The New Republic, The New Yorker, The New York Review of Books, The New York Times, The Wall Street Journal, Slate..."
and has decided, doubtless given the cultural tenor of these publications, to stick it to the plebeians from his New York Elysium orbiting retreat. The prosecution rests.
Re:The author went to college in the 80's (Score:4, Insightful)
....to add to this, the guy is making money AS A WRITER!!!!! He has published 5 books and has written for other top publications and has a family living in New Jersey. Who knows how much he makes as a writer but he should be trying to pay forth something to his loans in good faith as opposed to just saying screw it. Sociopathic asshole is exactly right.
Re:The author went to college in the 80's (Score:5, Insightful)
Regardless of what has happened to social mobility in the last 30 years, it hasn't affected the author of this article because he is 57 years old. He went to college in the 80's when college was not nearly as expensive. ...
This guy is simply a sociopathic asshole who is just being provocative to get page views. He stopped paying his bills because he is an entitled prick, not because of the federal loan apparatus he is complaining about in the article. ...
*Exactly* I'm 52 and graduated in 1987 with a BSCS from a state school. I worked at school for financial aid, got and paid off my student loans. This guy is a whiny slacker who can't admit he's made poor life choices and thinks society owes him something. He wants to be a writer? Fine - work for it. I have a friend who's a writer and has another "real" job to help her pay the bills. He says in TFA:
Or I could take what I had been led to believe was both the morally and legally reprehensible step of defaulting on my student loans, which was the only way I could survive without wasting my life in a job that had nothing to do with my particular usefulness to society.
And what *is* his "particular usefulness to society"? I am at a loss here.
Re:The author went to college in the 80's (Score:4, Informative)
Can't win the lottery, can't close escrow, there's some others but those are the ones that people tend to remember.
Re:Social mobility was killed, but not this way (Score:5, Insightful)
Colleges are part of narrative.
"If you get a college degree then you will be successful." Is played over and over.
While your success is more based on basic economics, Supply and Demand.
STEM Graduates right now are actually the few group making a good middle wage living. Why? Their is enough Demand for such work and the supply is limited so not everyone can have their own STEM Graduate. So the salary is reflective of that. back in the early 2000's When the tech bubble popped, the demand for tech workers drops (As the Y2k patches were done, and they got their fancy new websites, and they have New PC's and server, all running nice and smooth), combined with rules that open the border for Foreign IT workers, so the supply went up and the demand went down and a lot of people lost their job. Now as time went on the Demand and supply is more or less in balance now, so it is back to middle class living.
Other students may or may not be studying something that reflects the overall market's needs or there are just so many of them that the hirers can have their pick.
The issue is too many people now have college degrees today. So jobs that normally shouldn't require one, now does. Just because the pool of people is there.
Now my solution to the problem would be the following.
Enhanced vocational training: Colleges are not and shouldn't be job focused. That is what vocational training is for. This should be expanded to help meet the demand of the current set of high demand jobs. If you are happy to be a programmer, you don't need a computer science degree, and the computer science degree shouldn't focus so much to teach students how to program in today's popular language.
Harder college: Colleges have lowered the bar, so they will get students out. Because they know they need the paper saying they graduated to make a career out of themselves. A lot of students who work hard can get a degree... However that doesn't mean they have learned anything from it. Having a College degree should should have more meaning. To do this we need a higher drop out rate, but having the Enhanced vocational training, to catch the students.
Encourage companies to come up with clear career paths: This is one of the big problems today. In order to advance in a career we need to jump from job to job, getting a better title and pay each time. Companies if they want to keep employees need a clear, followable and recordable career path. Back in the old days there was a clear path from working in the Mail Room to CEO. Today we have automation system that fill a lot of spots in working up. Who needs a mail room when everything is emailed? Much of the Data Entry positions are not needed due to system integration, and all digital communication. The math to calculate and do analysis are done by computers too. So there are Gaps in the workforce meaning there is a steeper learning curve for advancement. Companies need to realize this and adjust their policies to encourage advancement inside the company.
Re:Social mobility was killed, but not this way (Score:5, Interesting)
The truth is the whole machine of "give everyone the individual ability to get a degree" is a hand-out to businesses by way of reliably creating huge oversupply of in-demand skilled laborers. This raises unemployment and suppresses salaries, versus a laissez-faire method in which the government supplies no support for universal college education.
The laissez-faire method is most painful to businesses, who are more capable of adapting: they would train and incrementally shift work onto entrants, because the wars of sniping professionals from each other cause $250k salaries for banal laborers who could be hired for $40k and trained for $20k per annum while lifting time-wasting grunt work off $80k per annum senior skilled laborers. This contrasts sharply with the individual responsibility method, in which students must attempt market speculation without coordination: giving universal access to college creates the Prisoner's Dilemma, in which it is always advantageous for any individual to pursue an education, and to pursue an education in the most in-demand career, thus creating the harmful oversupply in the market but allowing the individual to avoid exclusion from that market--the best result in the worst outcome.
This laissez-faire approach with college is a carefully-constructed feedback loop in a capitalist system. It is similar to my Citizen's Dividend plan, which makes it profitable to supply homes and food to the poor, thus ensuring that a business entity which refuses to do so on simple principle will only forfeit the profit opportunity to some other business entity which gets a priapic hard-on for the billions of dollars of profits per year they can beat out of the broke and unemployed. A complete laissez-faire approach to welfare--supplying no services at all--fails; a tax system to construct such a capitalist feedback loop works extremely well, but needs rules to prevent abuse (no dividends to immigrants, foreign resident citizens, or children), and thus needs retention of the current system in legacy (i.e. food stamps and EBT for families with children, housing vouchers for naturalized immigrants).
I always look at the pain inflicted by each system, the responses to that pain, and the capability to abuse and manipulate the system. I prefer constructed laissez-faire systems in which we place policy to create automatic pain when society tries to abuse and manipulate the system--as I said above, without universal access to college, businesses would suffer greatly if they did not supply for the development of the workforce, and would profit greatly by supplying such development, and so can do nothing but serve the needs of society. I have no care to stand over anyone with the whip in hand.
One word summary. (Score:5, Insightful)
Four word subtitle (Score:5, Insightful)
Because I'm a victim
Re: (Score:3)
I don't have a problem with the fact that you might have to work at Starbucks after getting an art history degree.
The real issue is that people decided that working at Starbucks before getting that art history degree was too much to ask. The government began to encourage student loans greatly increasing the supply of money looking for universities, and for those that took economics instead of art history the outcome of that sort of market distortion is quite predictable. We are talking about the basic fundamentals of economics here that nobody can argue against: supply, demand, and competition.
The student debt probl
Be smart (Score:5, Informative)
Get your general education classes done at a junior college. Much cheaper. Then transfer to a 4 year school if you're career path requires it. Note the emphasis on the word "requires". Don't go to college if your career doesn't need it. There's no point in graduating with what essentially is the size of a home mortgage. You're starting in the hole and you don't need to do that. The sooner that you can get into the workforce with a good paying job, the better off you will be. You can buy a car and home much earlier in life. You can also start saving for retirement earlier which makes a huge impact on when and how you can retire.
Re:Be smart (Score:5, Insightful)
> Don't go to college if your career doesn't need it.
The first data-point that HR uses to screen applicants, is the presence/absence of a college degree. It doesn't matter if the position is for a night porter, or the company CFO.
pricing (Score:5, Insightful)
I agree the current way of funding uni in the U.S. is bad. However, if the government guarantees a uni attempt at a degree, how does the government put a price on it? Is Harvard comparable to Ohio State University? Does a uni degree attempt become another entitlement? Entitlements are already breaking the U.S. budget.
Maybe the U.S. could fund degree attempts at state unis. The problem there is that states have been pulling money out of higher ed. then turning around and claiming their state schools are still state schools. The some of the increase in tuition at state schools is directly the result of the state legislatures pulling money out. The legislators then turn around and claim there is a crisis in higher education with ever higher costs for the average person.
Re:pricing (Score:5, Insightful)
Re: (Score:3)
Entitlements are already breaking the U.S. budget.
I suppose we could end some entitlements.
Fossil fuels: $3.2 billion
Foreign tax credit for Fossil fuels: $15.3 billion
Credit for production of non-conventional fuels: $14.1 billion
Oil and Gas exploration and development expensing: $7.1 billion
Alcohol Credit for Fuel Excise Tax: $11.6 billion
Corn-Based Ethanol: $5.0 billion
In the more civilized parts of the world... (Score:4, Informative)
...instead of guaranteeing loans, the government would have to guarantee a college education.
that is what we do. Works fine, here in Europe.
Re:In the more civilized parts of the world... (Score:5, Informative)
...instead of guaranteeing loans, the government would have to guarantee a college education.
that is what we do. Works fine, here in Europe.
In fact a number of Americans are now coming to Europe to study for free [washingtonpost.com]
Re: (Score:3)
"Get as many credit cards as you can..." (Score:5, Insightful)
Re:"Get as many credit cards as you can..." (Score:5, Interesting)
Re:"Get as many credit cards as you can..." (Score:5, Informative)
Actually if he's transferring his student loan debt to the credit cards the advice is brilliant.
Indeed - you can wipe out credit card debt by declaring bankruptcy. Not possible with government loans.
So, really, "brilliant" only if your plan is to be unable to get any sort of credit for the next 7-10 years.
Re:"Get as many credit cards as you can..." (Score:4, Insightful)
I will say two things:
1. I do not think "Reckless Borrowing" means what he thinks it means.
2. Banks and businesses have no qualms about shafting their creditors, why should ordinary people? (ex. see MF Global, etc.)
Re:"Get as many credit cards as you can..." (Score:4, Insightful)
How is that brilliant? Its advocating theft, which the rest of the (honest) credit card users have to pay for? The guy is a fucking thief.....
That's an astute analysis. Now, apply the same logic to the people he borrowed the money from in the first place, who specialize in making sub-prime loans to borrowers who will likely never be able to repay them, and then selling the loans off in exchange for a briefcase full of cash before flying to the Dominican Republic.
And then you can ask yourself who took the money that he borrowed, and what happened to it then.
How many thieves can you count in this story?
By noted sockpuppeteer Lee Siegel (Score:5, Interesting)
Famous for sockpuppeting his own online threads [wikipedia.org].
Scott Greenfield adds some valuable additional commentary [simplejustice.us]. The horror! He had to drop out of a "small private liberal arts college" and suffer the indignity of attending a public university. And this in an era when tuition was vastly lower than it is now.
I have a fair amount of sympathy for modern college students and graduates who are subsidizing a bonanza of administrators [necir.org] with no attendant benefit to themselves. But for Siegel to set himself up as one with such people is deeply deceitful. He wears his deadbeat status as a badge of honor.
8% (Score:3)
It wouldn't be such a problem if the interest rate wasn't 8%. That's a rate for an unsecured loan, not a government backed loan.
We moved a family members student loan onto a HELOC at 3%. Now she can make progress paying it off.
Re: (Score:3)
That's the problem. Interest rates on student loans are usury. Higher than most mortgages and auto loans.
And, for many people this may be the first significant debt they take on, long before they have experience with earning a paycheck and budgeting for debt repayment, or any kind of financial sensibility.
A lot has already been written about personal responsibility, but the thing is, when you are trapped in debt with the prospects of living an austere life of working hard to service interest payments, the
Re: (Score:3)
"That's the problem. Interest rates on student loans are usury. Higher than most mortgages and auto loans"
Of course they're higher! Student loans are:
(a) unsecured (you can foreclose on a house or repossess a car, you can't take back a diploma and resell it)
(b) not based on creditworthiness/ability to pay (it's not like the Feds say "we'll lend to people getting CompSci degrees at Stanford, but not to people getting French literature degrees at second-tier state schools")
Re: (Score:3)
I find it extremely irritating, that Navient, which used to be Sallie Mae, is a company, not a government entity, but it somehow enjoys protection from its customers declaring bankruptcy.
It is Absurd... (Score:5, Insightful)
It struck me as absurd that one could amass crippling debt as a result, not of drug addiction or reckless borrowing and spending, but of going to college>
It strikes me as absurd that people are finishing their secondary education without understanding the fact that such school loans would be crippling. We must really be doing our high school children a disservice if they have such a poor understanding of economics and mathematics./P.
Talk about blaming society for personal problems (Score:5, Informative)
Guy goes to one of the most expensive schools in the country, in one of the most expensive cities in the world. Gets an advanced degree before starting to earn a living. He doesn't have a full time job till he is 31, http://en.wikipedia.org/wiki/L... [wikipedia.org]. He also manages to get fired from the New Republic for doing things they wouldn't even do http://www.nytimes.com/2006/09... [nytimes.com].
But somehow Society is to blame for HIS bad decisions.
Also missing from the article (Score:5, Informative)
1. It's there implicitly but it's worth to make explicit: "when I was 17, I went with my mother to the local bank" means that this delightful anedote happened in 1974, a long time ago both in years and in differences in tuition prices and legislation around student loans.
2. There will be a lot of talk about federally guaranteed students loans but his loans where unsubsidized private loans with a private bank.
The whole article is flamebait because it piggybacks in the current perception that the student loan system in the U.S. is flawed but offers an anecdote from a very different time and background than ours.
The loans are not the only university scandal (Score:5, Interesting)
See Confessions of a Converted Lecturer [youtube.com], or the first two devastating paragraphs of the abstract here [asu.edu].
The college loans are not the only scandal happening at the universities. We should also be seeking to make sure that our straight-A students actually understand the materials they are memorizing, by instituting the FCI's. This would also help parents to determine the effectiveness of the various programs, and programs would once again compete on instruction.
You know what you're getting into (Score:5, Funny)
Reminds me of a relative (Score:3)
Call me old-fashioned .. but you took out the loan (Score:5, Insightful)
I was very fortunate -- I went to university in Canada, where university tuition is lower. The tuition for my last semester (four months, Winter '82) broke $1,000 for the first time. My parents had also taken out a Registered Education Savings Plan for me, which kicked in, I think, $800 for the last three years of my four year degree. And I had my Co-op work terms. With all that, I still needed a loan (it was around $2,500) to get me through the last year (OK, some of that may have paid for the month's vacation I took after finishing school).
I paid $500 of the loan off in my first six months after school, then a few months after that, received a notice that they'd start charging interest if the loan wasn't paid off in full by the first anniversary. I was earning $22,000 annually, but my expenses were low, so I managed to make four monthly payments of $550 per month to get it all paid off.
It didn't occur to my to skip out on the loan, although it was a relatively small amount. The only other loan I'd taken out was for a motorcycle -- four $400 payments -- and dodging those payments didn't occur to me either. I'd borrowed money, I had to pay it back.
I think the writer of TFA is in denial. They need to mend fences and start paying off the loan. You borrowed some money and promised to pay it back. Yes, it's inconvenient, but it's the responsible thing to do. Grow up.
Poor baby.... (Score:5, Interesting)
"Years later, I found myself confronted with a choice that too many people have had to and will have to face. I could give up what had become my vocation (in my case, being a writer) and take a job that I didn’t want in order to repay the huge debt I had accumulated in college and graduate school."
You want to be a writer but you can not pay off the debt you created getting a doctorate?
Really? You want into to debt getting a Phd in Philosophy?
Sorry but a lot of people have to take jobs they do not want to pay of debt or even to feed a family. You decided to spend a lot of borrowed money getting a degree and a Phd in a subject that does not pay well at all.
"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. "
Well yes it is. State schools are a lot cheaper and community colleges even cheaper. Get your required course out of the way on the cheap and then move on to University.
" I thought I deserved better, and naïvely tried to turn myself into a professional reader and writer on my own, without a college degree."
Talk about a sense of entitlement. You did not try to turn yourself into a anything on your own. You tried to use other people's money to live a fantasy. Who needs to pay a "professional reader". Wow. I just do not know what to say except pay up dead beat.
Wow this does so much harm to the idea of student loan reform that it almost seems like a right wing plant.
Debt Solution: Get "In Demand" Schooling ! (Score:3)
Whether it is Texas A&M, MIT, CalTech or smaller schools like Oregon Inst. of Technology, get a degree where their graduates have high rates of employment within 6 months of graduation.
OIT claims to have 90+ % of graduates with full time jobs within 6 months of graduation. Lots of their graduates have job offers before they leave school.
If a student wants to "dabble" in the soft sciences, like History and Sociology and Psychology, do it at night school after you have a job!
This is one of those moments ... (Score:4, Insightful)
... where I thank god that I live in Germany. An abundance of colleges to choose from, all for free (except some trivial Semester fee that's well below 200 Euros that gets you rebated admittance to public events, a free public transport ticket and some other niceys along with it).
Fucking dig this: You actually *save* money if you are a student over here - even as a part-time student!! I'd pay less healthcare as a freelancer with cheap student rates (look up "healthcare" on wikipedia if you're from the US. ... SCNR) and my PT ticket is cheaper!
This is also one of the reasons I'm gonna get off my lazy ass and start a college CS track this year - it would be an insane freakin' waste not to. Just finished mit GED A-Levels with prime scores btw. for exactly that reason.
Tip from across the pond: You guys should help Lessig get through with his Superpac initiative [mayday.us] and then redo some core parameters of your system - it's broken at to many places.
My 2 eurocents.
personal responsibility (Score:5, Interesting)
Funny how when a corporation defaults on its debt and files for bankruptcy so that it can break union contracts and pay workers less, it's seen as a sharp business move [newyorker.com], a recognition that their expenditures have come to surpass their income in a structural and unsustainable way. But when an individual decides the same, perhaps after coming to the conclusion that an investment in a home or university education wasn't as lucrative as it seemed it would be at the time, people start thundering about the moral necessity of paying back loans.
Re:personal responsibility (Score:4, Interesting)
So, perhaps the trick to paying off student loans in the 21st century is:
Create a sham startup business
Get yourself have a million in seed money from a VC that isn't too bright (This might be the tough part)
Pay yourself a big salary with that seed money (Because, hey, you're the CEO right?)
Use that salary to pay off your student loans
Declare bankruptcy once the seed money runs out.
Put "CEO of shamstartup.com!" on your resume, and use it to get a management job somewhere that doesn't do thorough background checks.
What's Your Next Trick? (Score:4, Insightful)
What's your next trick, pawning a bunch of your stuff (since no one will ever give you another credit-based loan again), never paying the interest, then bitching online about how the people at the pawn shop are thieves because they sold "your" stuff?
The old switcheroo! (Score:3)
I could give up what had become my vocation (in my case, being a writer) and take a job that I didn’t want in order to repay the huge debt I had accumulated in college and graduate school.
Oh, gods, the horror! Taking a job you don't want so you can live? The poor, wretched victim!
I thought this guy was yet another "B.A. in basket weaving" millenial from this whinging. Color me gobsmacked: he was born in the fucking 50s.
Remove bankruptcy protection for lenders (Score:3)
Student loans need to be subject to bankruptcy just like any other loan and Gov loans need to be removed entirely and replaced with smaller amount grants. Grants as a compromise because progressives will never allow them to be simply be removed or reformed with reasonable controls and even if lowered it would only be a few years until the fed managed to make a mess of them again.
Not Listening to Mike Rowe (Score:4, Insightful)
Taking out huge loans that you don't have a way to repay, to get a degree that has no potential for income, show a serious lack of judgement. Military service will fund education, often while drawing full pay. A trade certification from a community college would lead to a stable income that could be used to fund an indulgence degree like Philosophy. It would also allow you to eat after getting the degree, which is the big problem.
There are plenty of degree programs where the student loan problem is a real issue. Philosophy isn't one of those. If you don't have a trust fund or a rich spouse to support you, don't get it.
It's nobody's fault and everybody's fault. (Score:5, Interesting)
I can't blame the universities for the mess the higher education system is in. They're just responding to market forces. Really, everybody is. It's just that the market has been circumvented by a well-meaning government.
The problem is that unlimited money is flowing into the higher educational system and there is no negative feedback loop to limit it. It's just one big positive feedback loop driving up attendance and cost.
1) Take as a given that "you have to go to college or else you'll have a shitty job." More on this later. The number of students going to college has been steadily increasing since forever. Part of this is because of the nature of our increasingly specialized and technical world, and partly due to social changes, like the progress made by women and minorities. I'm not in any way implying that's bad, I'm just saying there are more people going to school.
2) The government first issued direct loans to poor students in 1958. This method upset congress, though, because from a budgetary standpoint it showed as a loss the year the loan was issued, even though it would be paid back later. Instead, from 1965-2010, the government guaranteed student loans made by private lenders. If the student defaulted, the government would make the lender whole. This makes the rule that student loan debt cannot be discharged by bankruptcy especially petty. The lenders were at no risk, anyway. From 1993 on the government also issued loans directly. Also, as time has gone on, loans have become increasingly easy to obtain. Originally only poor students who could show financial need qualified for government-backed loans, but those requirements were dropped in the 80s.
3) Since there is no risk to the private lender, there is no incentive not to grant any loan request. As for government loans, there's no political will to deny students seeking money for education. So, there's no brake on the money flowing into the system. And the lenders aren't necessarily doing anything wrong here. There have been some scandals involving kickbacks to schools, but it's mostly unnecessary as people are lining up for these loans. Why would the lender say no? They'd just get called out for ruining some kid's dream of an education.
4) If the lender had to take a risk, they would be careful about issuing loans. Today a D student seeking a degree that might land him a $30k/year job (if he's lucky) can get a loan for $40k. With risk involved, the lender would consult actuarial tables. What are the student's chances of completing the degree? What are his chances of getting a job? What's his expected income? What's the chance of default? No such brake exists. (Note, I'm not saying degrees not tied to a high-paying job are worthless. More on this later).
5) Without the loan, the D student would go learn a trade, instead, or get a job that doesn't require a degree, like say work in a call center (yes, I'm aware of the current situation in which ads for low-level jobs like call center work have starting requiring degrees. It's part of the loop and I'll get to it later). A student seeking a degree that costs more than what's reasonable given their earning potential would also be turned away (this would be an incentive to keep tuition costs down. If liberal arts students can't get loans, your school doesn't get their money).
6) Since the number of students and amount of money they can borrow is unbounded, there's no incentive to keep tuition costs down.
7) How are students with options deciding what school to attend? We would hope they would decide based on the quality of the education, but that's difficult to measure objectively. Generally it just has to be "good." Also, many students don't know what they want to major in when they arrive, anyway, so it's difficult to make a decision based on the quality of a program. As long as they're reasonably confident in the quality of the education, they're making their decision based on amenities. How nice are the dorms? The recreational facilities? How pretty is the
This guy lives in Montclair, crazy expensive (Score:3)
he writes for the NY Times, lives in the same town where Tony Soprano lived in a home most likely worth over $1 million, sends his kids to some of the best public schools in the USA and doesn't want to pay back the loans that paid for the education that got him here.
i might have to restructure my loans with my wife and do the same thing and let you suckers pay them off
Bankrupty doesn't discharge them (Score:5, Informative)
The major problem with student loans is that there is no longer any escape from them. Bankruptcy does not discharge them. You're stuck with them for life.
That is a major departure from traditional debt laws, and this is just wrong. People should be able to escape their mistakes after appropriate penalties.
A student, 18 years in age, cannot comprehend the gravity of the loans they are taking out. The whole situation is rotten: you are told that you MUST get a college degree, otherwise you will be a lifelong failure. You are told that IF you get a college degree, your future WILL be rosy and bright. You are told that ONCE you get a college degree, you WILL get a good job and then paying the loan off will be no problem.
That is the extent of your knowledge when you are 18. You have no idea how much your salary will be in four years, in fact, when you are 18, it is very likely you don't even know how much your parents make, or how much anyone makes beyond your knowledge of minimum wage. All you know is that you have to go to college and get that degree so you can get a good job. At least that is what my parents told me, and when I was in college, that is the same set of assumptions that everyone was operating under.
And once you get that degree and you can't get a job in your chosen field of study, or maybe you don't even get that degree (because a lot of people don't make it through college - many college programs, particularly engineering, are actually DESIGNED to weed people out), then you are sitting there with a stack of loans and no way to reasonably pay them off.
Prior to 2001, you could try to pay them for a while, but after finding that you were getting deeper and deeper in debt, you could take a deep breath, assess your situation, and then take your lumps in the form of bankruptcy - knowing that you would have a finite period of time in which you would be penalized by a bad credit rating. But at some point it would be over.
In 2001, congress changed the law to eliminate the discharge of student loans from bankruptcy. Any other financial failure is redeemable, but a decision that you made when you are 18 years old, a failure that is not easily foreseeable (because people don't know their capacity, people don't know their future earning potential, people don't know what the job market is going to do), is not forgivable. Never, until the day you die, and even then, your estate will be on the hook for them.
And the loan companies are given extraordinary power, backed by the government, to collect their debts. Hey, if someone owes me money, I can't attach someone's tax returns - but student loan companies can do this. It is also very hard for me to garnish someone's wages to collect a debt because there is always the threat that the person will file bankruptcy. The lack of that threat here gives student loans extraordinary power.
That is the problem here, and it will take people like Lee Siegel, doing what he did, to bring this to the forefront of discussion. Certainly any abuse of the student loan process should be curbed, but an iron shackle on everyone is not the right response to any potential abuse.
Reckless borrowing and spending (Score:3)
"It struck me as absurd that one could amass crippling debt as a result, not of drug addiction or reckless borrowing and spending, but of going to college."
The implication is that going to college can never involve "reckless borrowing and spending," but it can. He went into debt from buying lots of books and paying lots of people to give him lessons about them -- and he never had a plan for paying the money back. This is not economically different from spending your money on other things that you find pleasurable, such as booze and fast cars. Going to college can be reckless borrowing and spending, if you are reckless in your choices.
There is an argument for subsidizing higher education because it yields positive externalities, and that is his best argument. He makes it in a silly way, opposing choices between a high-paying job he didn't want, and a low-paying job he did want. He is basing his choices on his personal preferences, and again making himself seem reckless -- as if he had spent his time on booze and cars because that's what he "wanted." Instead, he could argue that his worth to society is not correlated with his income because he creates positive externalities, and therefore he should be subsidized. This is basically saying that our economic system is seriously broken in its incentives. This is a reasonable argument, but it requires a more nuanced analysis than saying "Everyone do what you like and to hell with everything!"
His arguments could be used to justify reckless spending on anything. In order to justify subsidizing higher education in particular, he would need to make a more careful analysis of incentives and benefits. Such arguments have been made very successfully, but not by him.
Good on you, Slashdot readers! (Score:4, Interesting)
I already read this story and a bunch of comments on it, when it was shared on a friend's Facebook feed over the weekend. When I saw it here this morning, I have to admit I suspected a lot of people would try to make arguments supporting the guy's decision. (Lots of college age folks on here, after all, presumably suffering with high tuition and challenges finding good paying jobs, fresh out of school. Also a lot of liberal thinkers on here who I imagined would be all for free, govt. funded college educations.)
But no ... I see overwhelming dissatisfaction with his article, which IMO is exactly how it should be!
If nothing else, it strikes me that early on in his article, he encourages others to consider refusing to pay what they owe, just like he did. Yet he goes on to explain his circumstances, which are probably a lot different than many students are in right now. First off, he's talking about his dad going bankrupt after his mom co-signed for his loan. An awful lot of students I know received Federal loan assistance that didn't require a co-signer at all (and actually have pretty low interest rates compared to any other unsecured bank loans you'd take out). If you go in and sign for one of those, you have nobody to blame but yourself if it turns out it's difficult to pay off afterwards! You can't really argue that your parent(s) drug you into the bank and pretty much told you to "get one of these" without you having much of a clue, as they signed along side you on the paperwork.
But second, yeah.... it's kind of tough to feel sympathy for this guy when he's complaining that paying down his loans was going to be so difficult a decision because it would require taking a job other than the one he preferred being in! Hello?! What about the college grads with PhDs in Physics who take a job at Burger King for a while, to pay the bills? You're going to discount their dedication to doing the right thing and paying what they agreed to pay in a written contract because YOU think it's better to ditch your personal responsibility if it means doing a job other than being a writer for a while? Guess what? If I was hiring for one of these career positions and had a candidate with a high level degree with work experience like that, I'd choose him/her over the candidate with nothing! It says things about the person's character and willing to follow through on what they commit to.
Free college education == civilization (Score:5, Insightful)
I got free college education. It wasn't at a small local college - it was at Cambridge, one of the top ten universities in the world. The government also gave me a "living stipend", enough for room and board in college and a tiny bit extra. Free college education continues in Scotland today, but has been abolished in England and Wales.
Government funding for education managed to keep prices low, maybe similar to how the NHS keeps healthcare costs lower than in the US. I never had to spend any money on money-mill textbooks because in most courses the lecturers provided us with notes, and where we needed books we just worked with them in the library.
I'm deeply grateful for it all. It feels crippling for young folks today that don't have wealthy parents, to have to start out their lives burdened by crippling debt. What an awful psychological burden for the next 20-30 years of their lives. How awful that they get turned into cogs in a corporate wheel where they have to grind through functional jobs to pay back that debt. How divisive that the children of rich kids are spared this.
I think it's a mark of civilization that we can educate our children and young adults, broaden their minds, give them a liberal arts background, let their creativity fly. So what if they learn poetry or philosophy or literature. So what if 90% of these educations we give them don't show a return-on-investment? I don't care. That's what society and civilization MEANS:
“I must study Politicks and War that my sons may have liberty to study Mathematicks and Philosophy. My sons ought to study mathematicks and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, musick, architecture, statuary, tapestry, and porcelaine.” John Adams, Letter to Abigail Adams, May 12, 1780.
(As for me? I'm now a software engineer. Through my professional work I've given back lots to society, making lots of developers more productive through my language design work. I gladly pay the top rate of taxes, and would gladly pay more. I asked the tax office how to donate higher levels of tax, and the person was very confused, went off for thirty minutes to get help from her supervisors, and ultimately told me it was impossible. Every election, I always vote for the parties that will benefit the people worse off than me, at my own detriment, because that's how I think civilized people should behave. I've not seen a charity that manages to control overall education costs, or provide universal benefit, as well as the UK government did through taxes.)
Fraud is a felony kids (Score:3)
Legal but not moral? (Score:3)
The writer describes the student loan process as being "legal but not moral". Considering when he got his student loan, and how he got it, I don't understand his perception of the loan as being "not moral". I took out my first student loan about 40 years after he did, in 1984. That was a different time. College was not nearly as expensive, and paying back loans was not as difficult. All of my student loans together added up to about 40% of the annual income from my first job. These days, comparable loans would probably come to about 120% of the annual income of a first job. The first obligation is something that could be satisfied in a few years. The latter, modern obligation might well never be satisfied. One might argue that the modern system, with towering loans to complete useless degree programs is immoral, but that was not the situation 40 years ago, or even 30 years ago.
What is immoral is not paying back what you borrowed. A couple of his suggestions for handling the situation are totally outrageous, most notably, that one should marry someone who has a good credit rating. Really? His life philosophy is to burden someone else with the consequences of his bad decisions?
A business decision (Score:5, Interesting)
The housing bubble that started in 2005 resulted in my purchasing a rental property precisely at the height of the market. I had to, it was part of a deal. So when the bubble burst, the market value went to about 40% of loan balance in 2008, and stayed there until 2012.
I didn't 'walk away'. I endured countless calls from the lender's 'home retention team', or 'home affordability team', or whoever if they, THEY, processed my payment either on due date or mere hours later. They were deathly afraid I would do the rational thing and walk away.
But the property had positive cash from from day one. It made business sense for me to keep it. As of this year, it has equity value. Not much, but that's pretty good.
As an aside, I could have bought the neighboring property for $50k in 2011, which at that time was really fair market value. Same layout, a mirror image, but it needed a new roof, major remodels inside, and had no tenants. It looked like 30% down (commercial loan for income property), $30k of work, about $45K cash to buy and rent out a $50k property. Not very attractive.
But back to the story, I rented to one man who bought a home in early 2005, escaped most of the bubble here, but had a 3-year ARM that drove his payment from $1,500/mo to $3,800/mo. He walked way when it adjusted. No bank could fix this in 2008, for obvious reasons, and he also was working in commercial construction, which dried up. His income plummeted, and he eventually could not even pay rent.
'Lots' of people I know walked way from mortgages that far exceeded property value. It was a business decision, prompted by both buying at inflated prices, the subsequent collapse of the market, many had ARMs that went sky-high, combined with post-2008 layoffs, credit card debt that forced them into bankruptcy, and in many cases their being given a loan for over-priced homes appraised by unscrupulous appraisers in collusion with mortgage bankers and realtors. Yes, Realtors.
For a graduate who chose a major with no job prospects, and no ability to find alternative work that can pay the bills, default may make sense. If these defaults impact certain institutions more than others, perhaps we will see market pricing for either student loans or for programs. Let me explain:
If defaults occur for certain institutions, a market pricing approach would raise interest rates for those schools that suffer more defaults. This is bound to impact enrollment for some of these.
However, if defaults impact certain majors (philosophy and art being favorite examples), perhaps then lenders inquire about the student's course of study, and price it according to experience.
There are several possible outcomes to these actions:
- Some institutions may lower tuition. Unlikely at first, but if enrollment suffers because students can't finance their tuition, they may adjust.
- Some majors may become so unpopular that tuition has to drop. Maybe.
- Lenders may be asking more questions of students - job prospects, ability to pay, blah blah.
- The government may, just may, get out of the business
Consider this. In 2005, mortgage lenders started making loans that were literally indefensible. NINJA loans, Sallie May and Freddie Mac underwriting loans with dubious or nonexistent documentation, inflated values, collusion that is obvious in hindsight. Easy money that resulted in defaults when the real estate market corrected, and the economic downturn forced borrowers to make hard choices. Many 'walked way'. Now, five years later for the last of those, they find that they can in fact get a loan - the banks figured this out. Tighter requirements now for sure, but more like normal for the long-term market.
Now we have the federal government underwriting student loans for tuition that is increasing much faster than the CPI, with less value than ever, and borrowers have limited prospects for repaying these loans. Schools claim they offer value, but even seemingly good bets like MBAs and engin
Re:Why? (Score:5, Interesting)
You realize that no one gets to choose what "their tax dollars" are spent on, right? Otherwise I wouldn't spend a dime on things like drones and NSA data centers.
Given the option, I'd rather pay for a million people to go to college than a single Predator drone.
Re:Why? (Score:5, Insightful)
Why should I guarantee a college education to anyone with my hard-earned tax dollars?
Now take out that "college" part and wonder why you're allowing public schools at all.
Re:Why? (Score:5, Informative)
Re:But Bernie Sanders is 'IRRELEVANT' (Score:5, Informative)
Obama isn't a socialist or even much of a progressive; from what I recall, he's somewhere between Eisenhower & Nixon on most issues.
Re: (Score:3)
You have a point, but this needs to be understood by those people who are undertaking a student loan, and the people who are loaning the money, not to mention the universities whose costs are rising faster than inflation and even faster than the cost of medical care. Despite its obvious value, a liberal arts education must be treated economically as a luxury. It's not likely to pay for itself in tangible ways, so the people who want it need to understand what they are doing. They can't expect to be rewa
Re: (Score:3)