
New York Times Should Apologize for the Awful Op-Ed It Just Ran on Student Loans - tokenadult
http://www.slate.com/blogs/moneybox/2015/06/08/lee_siegel_new_york_times_op_ed_is_this_the_worst_op_ed_ever_written_about.html
======
facetube
The first paragraph of the original article clearly implies that at least some
of these were private student loans, originated by a for-profit bank. His mom
co-signed, but ended up declaring bankruptcy independently.

If they're private loans that he defaulted on, nobody is "pickpocketing the
government" — a bank made the wrong investment decision and lost money, which
happens to millions of ordinary non-corporate people every day in a 401(k)
somewhere. It's all just business until a real individual human being makes
some bad decisions... at which point it's all his fault, it's a moral issue,
he's a terrible person, and he better spend the rest of his life fixing this.

------
venomsnake
FFS ... breaching a contract is business decision, not a moral one. He did the
right thing.

When US can borrow at negative rates charging high interest rates (6-8.5%) on
college loans is also a business and immoral decision.

~~~
melling
Please read the article before commenting. There's more to the story.

"After pursuing not one, not two, but three degrees from an Ivy League
university, he chose to default on his student loans at taxpayer expense,
because he felt that paying them back would have hampered his ambitions of
becoming a write"

As for a business decision, it's a really bad one because the government can
garnish your wages:

"Astoundingly, Siegel never mentions, nor demonstrates that he understands,
the fact that in most cases of default the government can simply start
garnishing up to 15 percent of borrowers’ disposable wages directly from their
paychecks. That’s more than the 10 percent they would owe if they simply
signed up for the newest income-based repayment plan that the Department of
Education offers. "

~~~
rspeer
The horror. Not one, not two, but _three degrees_... two of which were
graduate degrees.

It is not typical to pay for a graduate degree. If you have any reason to go
to grad school, you have a scholarship, a grant, or a teaching workload, or
some combination of those.

The article's author (Jordan Weissmann) seems completely unaware of this
dynamic, even as he grudgingly acknowledges in an edit that the tuition for
the three degrees he is so shocked about is not actually part of the debt.

It's true that defaulting on student loans is probably not a good plan, but
it's also true that this article damages its point by opening with an
unjustified, moralizing attack on Lee Siegel's educational career.

~~~
snowwrestler
> It is not typical to pay for a graduate degree. If you have any reason to go
> to grad school, you have a scholarship, a grant, or a teaching workload, or
> some combination of those.

This really depends on the field of study. A PhD candidate in a STEM field--
yes. A masters degree in anthropology--not so much. Even with work study, that
person is going to have some student loans if they cannot pay for it outright.

------
burritofanatic
Yeah, the blowback couldn't have been easy. Personally, it wouldn't work for
my life stage. The pain and stress of making more income enough to service the
student loans comfortably is less than the pain and stress of the aftermath of
a quarter million dollar student loan default.

To his defense Lee Siegel, the author or the original article, happens to have
a different class of loans that's being issued today. His likely don't have
the benefits of forgiveness or income based repayment.

Given all the options available to students today, before you decide to
default, make sure that you're on your way of your income earning peak
potential first - as in, don't default at 26 - right after law school. You may
switch careers (like me), and find a new start in job prospects and
opportunity.

Original article: [http://www.nytimes.com/2015/06/07/opinion/sunday/why-i-
defau...](http://www.nytimes.com/2015/06/07/opinion/sunday/why-i-defaulted-on-
my-student-loans.html?_r=0)

------
zaccus
Obviously, defaulting on debt is immoral, unethical, unmanly, whatever you
want to call it. But that doesn't matter and it's useless to talk about it
that way.

The reality is that lots of students are taking on way more debt than they
can't handle. Because discharging that debt is not an option in most cases,
bad debt remains on the books with the assumption that it's good debt and can
be repackaged and priced accordingly. Say what you will about morality, this
is a financial catastrophe in the making.

A huge amount of this debt will never be paid back. 50k at 9% can't be paid
back by someone on a Starbucks wage. When letting the government garnish your
wages becomes less expensive than servicing the interest on your student
loans, only a fool would continue to pay on them. That's not a political
opinion, that's math. We need to be realistic about this.

Frankly, if people walking away from their student loan debt does anything to
deflate this bubble, I can only see that as a net positive.

------
geebee
I think there is a great essay to be written about rebelling against student
loans, but this wasn't it.

I believe the student loan program has been harmful. I don't mind that
"bankruptcy" has social and moral as well as financial implications, but I
also agree that there are times when it is acceptable to fail to pay your
debts, with regret.

This is why we have bankruptcy law. We accept that there are times where
circumstance, usually combined with bad judgement, have put someone into a
financial hole that they will never climb out of. We don't, as a civilized
society, see much point in garnishing someone's wages for the next 50 years to
pay off a debt (or perhaps only make a dent it it). We accept that after a
total collapse and loss of all wealth, followed by period of credit purgatory,
you may rejoin the economic world with a more or less clean slate. This has an
additional benefit in that it forces creditors to be careful too, as they
should be. I have no personal interest in watching my government's courts,
resources and monopoly on physical force used to chase down payment of a
foolish loan for decades and decades.

So to me, the real problem here is that the government guarantees the loans in
exchange for a very unusual loss of bankruptcy as an option. This allows
private lenders to loan money at low interest rates without fear of non-
payment, but is that a good thing? I understand that there may be some social
value in these loans, and that there is a greater risk of someone "walking
away" (ie., they mythical med student with 200k in debt who declares
bankruptcy, lives with his parents during residency, and starts making huge
bucks just as the credit purgatory ends). But overall, I do think it's useful
to ask "would it make any sense for a private lender, subject to normal
bankruptcy laws, to make these loans?" 20k for a masters degree in
engineering? Yeah. $150k for a masters in philosophy?

It gets worse. Because this easy but very dangerous credit was extended to
students, Universities (in my opinion) raised their prices to reflect the
availability of money. This reduced the available options for students who
were clear-eyed about the debt they were taking on. It's still possible - in
California, community college followed by a UC or State school can yield a
very very high quality education, especially considering that half of UC
students pay no tuition. But I think it's very likely that universities that
would have looked for ways to offer lower cost educations instead charged more
simply because now students _could_ pay for it through these loans.

And because the loans couldn't be discharged through ordinary bankruptcy, the
trap was now set. It doesn't help that these loans are also typically taken
out for something that traditionally happens in your first year of legal
adulthood. In short, at age 18, the _very first year_ someone is even allowed
to enter these sorts of agreements, we set them up to take out loans that
can't be discharged through bankruptcy and will follow them their entire
lives.

Ok, so, it's pretty clear I'm disgusted with the way student loans work (just
to be clear, I think it's fine for the government to fund education, I just
think that the student loan program, as it was implemented, ended up doing
harm). But I'm also not impressed with the writer of this op-ed. He ran up a
huge debt getting humanities or writing degrees, and then decided that because
the debt would prevent him from becoming a writer, he just wouldn't pay it.

You know, there are lots of people who would like to be writers, musicians, or
artists. They find a way to pay the bills and live, while pursuing their
passion. Sometimes they have to give it up, other times they don't achieve
what they would have otherwise. Many of them walked away from degrees that
might have provided the career boost Mr Siegel got from having attended
Columbia, understanding that the trade-off wasn't worth it.

In short, I think the NYTimes gave one of the least sympathetic or compelling
people the bullhorn on this issue.

I'd love to read a compelling op-ed on this topic, but this wasn't it.

------
cnp
Wow, reading this made me so furious I'm surprised with myself.

