
Why I Defaulted on My Student Loans - doppp
http://www.nytimes.com/2015/06/07/opinion/sunday/why-i-defaulted-on-my-student-loans.html?smid=fb-nytimes&smtyp=cur
======
dataker
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.

~~~
inflagranti
First of, that's a false dichotomy. The choice is not between expensive
liberal art colleges and cheap CS universities. The outcome of a guy going to
a cheap liberal arts college would still have been much worse than yours!

Yes, there is some individual reliability, but acting like it's peoples fault
if they are good at something that doesn't pay well and don't have a hang for
CS & math is dishonest IMHO. Not everyone can just study the subject that
currently pays well and be good at it if they don't have a basic talent for
it. I would definitely be fucked and miserable if I had to do something artsy
if that would be what pays...

~~~
rdudek
There are a few factors involved but most of the burden comes down to the
person. What ever happened to personal responsibility and learning some
financial sense?

This is the same issue with housing. Just because the bank pre-qualified you
for a $500k loan, doesn't mean you should go out and buy a $500k house. You
need to look ahead and think about your current financial situation, what you
can honestly afford, how much can you put away into savings, will you be able
to afford maintenance and repairs?

Author could of had a lesser burden had they went to a local or state
university instead of starting off at private.

~~~
themartorana
Properly understanding intricate financial arrangements while also being able
to see far into the future just to make sure you will get a well-paying job
and never get sick or get laid off, and to make sure there won't be a banks-
created global financial crisis, and wrapping your head around the default-
interest-fees schedule that can have you owing 5x your loan 20 years later if
something unexpected DOES happen - is difficult at best for someone with
decades of adult life experience. Now you want 18 year olds to have that
understanding and mystical future vision.

Yelling "personal responsibility!" while having been relatively lucky in life
(if you're active on HN, you're one of the lucky few among your 8 billion
peers) feels like ostrich syndrome to me.

Edit: I'm also a bit sad that you want the author or young people like him to
accept that the social situation they're born in to dictates what level of
education they can afford and pursue. To me that's akin to saying "well, your
parents are poor and on welfare, so you should probably just accept that your
high school in your poor neighborhood has decades old text books that need to
be shared." It's not entirely analogous I suppose - you'd say something about
personal responsibility again - but looking at the photo negative of your
statement looks to me like "only rich kids can go to rich college, you have to
accept your position in cheap college."

~~~
gregd
It's also interesting to note that access to even "financial sense" for the
poor, doesn't exist.

~~~
zo1
But history, grammar, chemistry, physics and all those other subjects "are",
according to most school curriculae. Arguably, those subjects are really not
_that_ necessary for most of the population to function in day-to-day
situations, and yet we drill and drill it into students incessantly.

Financial sense, however, is very important for the majority of the
population. Even more so for those not-so-fortunate to win the oh-so-often-
complained-about "genetic" or "parental lottery".

The inner conspiracy theorist in me would have me convinced that not-teaching
such important topics is the only way to keep the economy-engine churning.
Efficiency and money-sense in the general populace are not things that will
drive "growth" and "GDP". But I could be wrong.

------
chiaro
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
Wow, sounds like an actual alignment of incentives.

~~~
baddox
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
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
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.

~~~
baddox
> It's beneficial for society if everyone is educated.

With no caveats whatsoever? Is any conceivable four-year program after high
school beneficial to society?

~~~
notacoward
That's a good point, which I didn't address only for the sake of brevity. Yes,
there are exceptions. No, they don't change the value of the statement as it
applies to the matter under discussion.

------
seba_dos1
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.

~~~
bane
The American system is fairly broken, true. But it's important to remember
that the vast majority of people (a number around 90%) who go to university
(even expensive private ones) here in the U.S. manage to navigate this system
and go on to productive, non-bankrupt lives after graduation.

It would be better if it was 100% of course, but it's not like most people
leave school and have to fight a desperate battle against debtors. For most
people it's just a temporary drag on their income that gets paid off
relatively quickly if they earn enough to pay over the minimum.

The reason it sort of quasi-works in the U.S., but seems inconceivable in
Europe, is likely the differences in the labor markets. In general the U.S.
doesn't have the same kinds of problems (or as severe) with youth employment
and underemployment. For example, during normal economic periods, youth
unemployment in the U.S. is around 13-15%, during the recession we considered
it to be a major crisis when it went to 20%. By contrast the EU youth
_employment_ rates (not unemployment) sits at around 30% (with Germany being a
notable exception at ~8%).

Furthermore, it's generally considered acceptable in the U.S. to job-hop for
higher salaries every year or two, meaning that your earning potential 5 and
10 years out of college will be much higher than directly after graduation,
further improving your ability to pay your loan off.

In other words, it's more possible in the U.S. to take on loans for education,
and have a reasonable expectation of graduating out of college into a full-
time job, where you can further expect to have increased your earning ability
and thus pay the loans off.

------
fnordfnordfnord
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.

------
chrisrudy502
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
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.

~~~
makomk
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.

------
aNoob7000
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
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.

------
notacoward
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
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
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.

~~~
themartorana
First job?

 _" Years later, I found myself confronted with a choice..."_

It wasn't his first job, it was a career you want him to give up.

 _" Forty years after I took out my first student loan, and 30 years after
getting my last, the Department of Education is still pursuing the unpaid
balance. My mother, who co-signed some of the loans, is dead. The banks that
made them have all gone under. I doubt that anyone can even find the
promissory notes. The accrued interest, combined with the collection agencies’
opulent fees, is now several times the principal."_

Unless I'm reading this wrong, educational debt is still debilitating 40 years
later. After a repayment plan of over a mortgage's worth of lifetime.

But if he had a better _attitude_...

~~~
notacoward
"It wasn't his first job, it was a career you want him to give up."

Go read it again. That "years later" comes _immediately_ after the part where
he mentions transferring to a different school, and before he mentions working
at The Wild Pair immediately after college. So yes, it _was_ his first job and
not a whole career as you supposed.

"Unless I'm reading this wrong, educational debt is still debilitating 40
years later."

40 years is a long time. It's long enough to have had many opportunities, even
as a writer, to stem the accrual and compounding of that debt. As I've said
over and over, there are serious problems with our student-loan system. Those
problems weren't nearly as bad 40 years ago, and they're only "debilitating"
now because of continued poor decision-making well after the fact. Whining
about an outcome that's largely, even if not entirely, under the author's
control doesn't help to solve today's student-debt problems. Au contraire.

------
rhino369
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.

~~~
chimeracoder
> 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.

~~~
jonknee
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).

------
JoeAltmaier
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.

~~~
3pt14159
Don't fucking lump us all in with this asshole. I worked through school and I
chose not to go to a more expensive out of country option that I could have
gotten into (MIT). There are tons of shitty jobs that pay very high wages,
like northern Canadian diamond mines, for example) that this person could have
done. Bankruptcy should be for completely unforeseen circumstances, like early
life medical problems, not because someone wants to be a writer.

~~~
notacoward
Well said. There are people who are screwed by the system, and there are
_also_ people who just screw themselves. I think it's important to hear from
the first group, which might help to affect change. The second group should
STFU. Yes, these kids are only 18 when they make these decisions. Yes, they're
ill informed and vulnerable to much more sophisticated people trying to
manipulate them. I'm sure there are many sad stories to tell, but telling them
_isn 't constructive_. It only reinforces the stereotype of _all_ student loan
defaulters as being irresponsible and overcome with their own sense of
entitlement like Lee Siegel. That reduces sympathy, and therefore reduces the
likelihood of positive change. The assumption that every story needs to be
told doesn't stand up to scrutiny. Some just don't.

~~~
jodah
> There are people who are screwed by the system, and there are also people
> who just screw themselves.

And there are people who are neither, such as myself.

I don't think that the discussion about how crappy our system is and how to
fix it should be owned by any one of these groups. Maybe the article's author
is the not the poster child for financial responsibility, but that doesn't
make his arguments about the broken state of our system any less valid.

~~~
notacoward
But he doesn't just make an argument about how broken the system is. He also
makes an argument for what people should do in response. It's an illegal,
questionably moral, and quite often risky response. That's the part that's
wrong, and in advocating for the second part he undermines any effort to do
anything about the first part.

~~~
jodah
Perhaps it is questionably moral and risky, but why should it be any more so
than a corporation filing for bankruptcy? The difference is that bankruptcies
are, to some extent, priced into the system. If they weren't and if personal
bankruptcies, for example, weren't allowed, we'd see problems with personal
and housing loan underwriting standards dropping to the level of students
loans. It's no coincidence that there has been a strong push towards making
all personal loans exempt from bankruptcy. Being setup to fail is profitable.

So how do you change things? You can change the rules of the game, but the
rulemakers are tight with the gamemakers. You can refuse to play, but playing
the game is seen as the only way out for many. Or you can refuse to pay and
break the game permanently. I don't advocate any particular approach, but I
understand those who do.

------
jodah
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.

------
nhangen
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
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
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
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
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.

------
orangecat
_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
Right. Top tier educations are for rich kids only.

~~~
muzz
Top tier education at places like Stanford and Harvard actually entails $0
tuition for students from lower middle-class families

------
melling
"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.

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

------
kenjackson
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.

------
robogimp
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.

~~~
crdoconnor
>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
>The elites of today

*The Boomers

~~~
crdoconnor
Who would you blame for ramping up the availability of debt for students so
that colleges could charge more?

A) Lobbyists for the financial industry and for profit college industry

B) Your Grandma

------
davidgerard
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
I know a lot of people without any of those that have a lot of character.

~~~
davidgerard
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.

------
ekianjo
> 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.

------
schizek
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.

------
littletimmy
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
> Let the lenders collapse

I think 2008 proved that this won't happen.

------
88e282102ae2e5b
I wish people would stop regarding liberal arts degrees as anything other than
the most expensive form of entertainment.

~~~
gregd
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
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
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.

------
abrown28
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.

------
chimeracoder
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.

~~~
jonknee
> 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
> 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
Yes, hence why I said:

> Post 2010 the loans are issued by the government so you cut out the
> middleman taking all the profit.

------
GeorgeOrr
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.

------
markbnj
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?

------
gregd
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.

------
lookup
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
> This generation

 _checks Wikipedia_

> Lee Siegel (born December 5, 1957)

~~~
lookup
Agreed, let's just hope that THIS generation (millenials) need to understand
the outcome of applying for a loan much more than the former.

------
zaroth
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.

------
Smushman
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.

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

------
beering
> 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?

