At 59, Chris pleaded for a renegotiation. "My life expectancy is 15 more years. At this rate, you're not going to get very much...' Their response was, 'So?'"
One of the most draconian measures passed by Biden during his loathsome career as a lackey of the institutional creditor class was the amendment to Section 523 of the Bankruptcy Code making it virtually impossible to discharge student debt. The amendment not only put millions into a state of debt peonage, it fueled dramatic increases in tuition, the growth of for-profit colleges like "Trump University," and a burgeoning credit bubble now surpassing $1.6 trillion.
Not bad for a guy who had to cheat his way to a foot of the class finish in law school.
Both sides serve in fealty to (global) private finance, hence their unwillingness to hurt the (largely) ill-gotten revenue streams flowing into the banking/finance industry. Trump was no different:
Anyone who hasn't picked up on a trend by now isn't paying attention. When Wall Street and the big banks (or automakers or Boeing) need bailouts, interest-free loans or loan forgiveness, the government and corporate media - Democrats and Republicans - bend over backward justify the need and to give them what they want as fast as possible. But if you're a little guy who pays a mortgage, credit card payment, college loans, etc. you're screwed. If you're lucky a journalist like Matt Taibbi will write about your case, or a newspaper might write a think piece about these ridiculous penalties and interest payments on occasion.
To those who cry and moan about student loan forgiveness - How loudly are you crying and moaning about immediate, interest free bailout money for corporations, banks and casinos like Goldman Sachs? We don't even get to see the details of these loans, yet the government and big banks who hold the student loan debt are allowed to pry into every aspect of your life, garnish your wages, deny the ability to declare bankruptcy, and abuse you over the phone on a daily basis. If you can't see by now that the rich (and corporations, banks, finance industry) are subject to one set of laws different from all the rest of us, then you're intentionally ignorant. Student loan debt in this country is managed and inflicted in the same manner that the Ferguson police department was shown to use minor traffic and other citations to ensure a steady stream of revenue and to ensure that the "principal" would never be paid off. It's a racket, no matter which way you look at it, and the only answer that makes sense is to avoid student loans completely until real reform has been enacted....but don't hold your breath. Neither Congress nor Biden nor Harris nor whatever Republican administration that succeeds them is going to do ANYTHING to help you. The government is completely captured by global private finance.
Rather than forgiving student debt, we should make it dischargeable in bankruptcy again. This would be appropriate for someone like Chris, who made his own mistakes, and give the lenders and service companies incentive to be reasonable. Going forward, something needs to be done to give the schools the incentive to keep costs, and thus borrowing, down. Perhaps they should be on the hook for a portion of any unpaid debt. As I recall, a few years ago, a study by the NY Fed found that for every additional dollar of student borrowing made available resulted in a $.70+ increase in tuition costs.
No one seems mad at the true villains of this story and that is the colleges and universities themselves. These fraudsters have increased tuitions by over 1100% since 1978 as professor and administrator salaries and numbers have soared while dorms and student centers now resemble luxury resorts rather than the rather utilitarian facilities that worked previously. So long as the extortianate tuition could be laid off to the feds repayment was (and is) none of their concern.
Make the schools responsible for debt that goes unpaid and we will see much lower cost and better results as silly degrees with zero chance of repayment ( looking at you grievance studies) will become relics of the past!.
I find the entire situation to be laughable. Why? Because all of these whiners borrowed money to get a college and advanced degrees. One would think they’d be smart enough to read the papers they were signing so that they’d understand what they were committing to. These people aren’t village idiots. They knew they were borrowing lots of money. Chris is 59 years ago. I came of age around the same time that he did. I borrowed money for college too. Those higher rates sound ridiculous now, but if you lived through those times, you will recall that the prime rate that banks charged their best customers (these were the days before LIBOR ruled) reached as high as 21%!!!! Heck, even the Federal government was PAYING more to borrow money for less than it loaned Chris and me - I recall buying Treasury bonds issued by the Fed yielding 14.625%!!!! Why did Reagan raise the rate on student loans? Because he was losing a fortune on the negative arbitrage, that’s why. And even after he raised the rates by 200 basis points, he was still losing a boatload.
Money doubles in 7 years if you borrow at 10%, in 10 years if you borrow at 7%.
So readers should keep in mind the tone of the times when Chris borrowed. Debt scared the daylights out of most sentient people. That may be hard for people to relate to or even believes in these many years of historically low interest rates.
But people with their eyes open back in those days did what they had to do to avoid or minimize the money they borrowed. I know that I did. I took a job to pay as much of my college and law school costs as possible. I didn’t get lazy and say, ah, screw it! and let the debt grow mindlessly as if I thought the whole thing was an unserious game that was rigged. Because it wasn’t. The disclosures were all in crystal clear black letters on white paper. With a crazy interest rate environment, I understood the risks were tall and I did my level best to avoid as much debt as possible even because it meant that every dollar in debt I avoided allowed me to avoid 9% a year in interest. If that’s not an incentive for people to get a job and keep their debt low, nothing is.
Yet there were plenty of unserious people in school with me who laughed at me for missing out on the college social life. No, I didn’t enjoy the Greek life, the first parties, the clubs and all that. I went to school, then to work, then studied, then sleep. I didn’t buy a house until I paid off my student loans 10 years after graduation. I did without until the debt was GONE.
And I’m getting tired of the deflection of attention to BIG CORPORATIONS and their bail outs. Sure they happen. But does that mean YOU can justify acting like a schmuck? Are YOU a systemically important entity? Maybe to yourself, but not to the country.
You want to say that you were gulled into taking stupid loans? What does it say about you, Mr. College Graduate? It reminds me of the old joke - did you go to school, stupid? yes and I came out the same way!
Yes, it is true that college costs way too much money. The average HS cost $11,000 a year per student in the US. Why does it cost $11,000 in the 12th grade but $40,000 and more for the 13th grade? Because people will pay it, and because of voting constituencies the government made it easier to borrow. Those constituencies are both the schools AND the borrowers.
But who put a gun to your head and said you MUST do this? Too many people think they should go to college are probably not suited for it. But it’s up to YOU to know your own limitations and to take a hard look at what you are getting yourself into.
At the end of the day, whether the colleges and universities charge too much or the government made the money easier to obtain, or the bankers misbehave in other areas, when YOU borrow money, its down to you to know what you’re getting in to. It’s quite a bit of irony not plead ignorance about loan terms entered into for an education intended to make you smarter.
You wrote an entire article about someone that admittedly created his own problems. The day I pay for someone else’s student loans is the day I stop paying taxes.
My two step solution.
1. Forgive all student debt
2. Discontinue any federal involvement in supporting the program.
The extreme cost of forgiving the loans would be worth getting out from a horrible policy that's caused education costs to grow exponentially while graduating students with useless (I apologize, unemployable) degrees.
Colleges should underwrite the loans against their endowments going forward. They're in the best position to determine whether a student looking to get a "whatever' studies degree is a good risk and should get a loan. I'm guessing that many, many liberal arts degrees wouldn't be considered a very good risk.
It’s outrageous! Student loans cannot be discharged in bankruptcy! Thank the president elect.
Reading these comments is depressing. Too many "I ain't payin' for his irresponsibility!" and hardly any empathy - even less acknowledgement of what a bunch of manipulative crooks we have running the financial systems in this nation.
I'm one of those guys who returned to school in his 40's. Graduated in 1999 (47 years old) & began a teaching career. Because of the mandatory full-time internship during my senior year, I had to borrow $15K just to pay for tuition, transportation & living expenses. I managed to grab a low % loan & just kept making those $80 a month payments - for nearly 20 years. Thankfully I managed to make the last payment before I retired. I got off easy - I can't imagine what the average person with $40K in debt has to deal with.
There was an old song called "16 Tons" - about working in a coal mining town. One line was, "St. Peter don't ya call me 'cause I can't go - I owe my soul to the company store." The coal mining companies had a great little scam going: they owned the town & everything in it. Once you signed on, they would lease you a home for you & your family, and they would give you an extended line of credit at the store. Your wages would be applied to rent & food. No surprise that working 12 hours a for 6 days a week didn't ever seem to get a coal miner caught up. Basically, free labor. Well, until the strikes & the violence, that is.
In the 1960's, most people had one or two loans they made monthly payments on: home & maybe a car. Add the phone & electric, and that was it for your monthly payments. Now, we have monthly payments for cell phones & service, cable, cable box, Internet modem, internet service, home, car, car insurance, health care, credit cards, and - oh, boy (bankers rubbing hands together in glee), we got 'em hooked on these education loans too!
So the bankers get those monthly payments coming their way - as many as possible, for as much as possible, for as long as possible - just like the old coal mining companies. Once they got hold of that debt, paid off a few politicians here & there, and got a few subtle changes in laws, it was voila!! Got 'em hooked for life.
See, the goal is no longer to give customers a chance to pay off a large debt over an extended period of time - oh, hell no - that went out the door with disco and catalytic converters. No, the goal is to collect that payment every month for the rest of the poor soul's life. Make that payment as big as possible, for as long as possible. Keep that money flowing - from the poor working suckers to the people that already have more than they can spend in a thousand lifetimes.
And then convince the poor bastards that fixing the system would turn the good old U S of A into <gasp!> VENEZUELA!!
WOW! “Chris” could very well be my pseudonym! For those who say “you’re a deadbeat.” I say - I have RE-paid principle of my loans at least 2x over but I am going to stop paying because at 8.25% I have been and will continue to pay interest on interest on interest until the day I die.
I gave up on working in my chosen field of study because I would not be able to live as an adult on what I was making as a journalist. No offense to MT - I never made it to Rolling Stone though I felt great pride working in community journalism. So I grabbed a second Bachelors from an online mill that cost more than tuition for 4yrs at state. Its worthless but i needed it to get a decent job in a completely unrelated field.
How did this happen? I started working at the age of 14 (w fake working papers) at a fast food place, I babysat and delivered newspapers. My family was dysfunctional w a violent father who drank himself to death and two other kids who died of cancer before the age of ten. Pres Reagan put an end to my SS survivor benefits in his great crusade against the parasites of America. There was no money or even thought of college. I saved up $12k filled out my financial aid forms and was told I was ineligible for grant money because of my savings. I did work-study, worked as a stringer, was an RA and took occasional housekeeping jobs off campus when I could. I had nowhere to live and my school allowed me to stay in the dorm during the summer. I had to take off a couple of semesters to get some kind of money together and every time the financial aid office said - don’t worry about money student loans are “good debt” they’re an investment in your future. It was the “go to” approach. Every semester I would go to register for classes and hear other students who were disadvantaged had not only recvd grants (PELL and I think TAP?) but they had $$ leftover to buy sneakers and jewelry and I remember one talking about buying a car.
I’m grateful that I’m working in a good job and taking care of myself. I’m also pissed off that I am being robbed over and over. My taxes pay for services I will NEVER use as I watch generations of kids of the blowhards who “did the right thing” coming out of public schools who cannot write their names, know nothing of civics and have no capacity for critical thinking. And I cannot refinance my student loan debt and even if I wanted to I couldn’t discharge it in bankruptcy. But the only discussion of relief is for free tuition (some of which is specifically identified for HBUs) and debt cancellation for recent borrowers. Chris and I will continue to lay into a system that was NEVER intended to generate revenue for the federal govt. I will continue to pay for sneakers and the salaries of elected officials who want my vote and will happily take my tax dollars but consider me too old to matter.
The title of this article should be, "Man explains that bad life choices have consequences."
Sorry, Matt, but I can't find any sympathy for this guy. There's no point detailing the stuff he did wrong, since your article chronicles things pretty well. But suffice to say, HE DID A LOT OF STUFF WRONG. To be fair, he acknowledges it, but it really is the central theme.
My wife left veterinary school with $167k in debt. We lived like we were in poverty for four and a half years until we paid it off. So what, we're the suckers? We're the chumps? Instead, should we have purchased new cars, eaten out three times a week, and taken a vacation overseas every year while we waited for taxpayers to bail us out?
Dems push kids into thinking they MUST go to college to be someone. I grew up in a blue collar family and town in the 60's. For the most part, kids who were college material went, and those who weren't college material went into electrician, tool and die, etc. You can solve some of this problem by ending this pathology of kids who don't belong in college taking other productive and lucrative routes, like in the past. The Education Industry and the Dem party are complicit in this scam.
He borrowed 79K and has paid 190K. But he has had many of the loans for over 30 years, and has let his obligations lapse for long periods. I’m sure much of this was disclosed to him when he signed the paperwork.
Unfortunately, Chris is an example of what happens when you unleash the world of finance on a person who has no real understanding of what the consequences are. This applies to many students. They are young and will agree to anything at that age, and they will be hooked for a long time.
Right now, the lender is able to make the borrower an indentured servant. Like most indentured servants, Chris asked for his troubles. He borrowed the money and agreed to the terms, so many will feel he deserves his fate.
I would like to just eliminate the government guaranteed student loan program. It would create a shared burden of risk between the lender and the borrower. I don’t see why as a taxpayer I should be involved in enforcing the terms of these loans. Let a bankruptcy judge handle it like they handle other debts.
This article describes the process by which the hard Left gets funded. Student loans paying for stupid college and leftist profs. Let them all crater
I'd like to be more sympathetic as I'm reading this while trying to send a friend $500 because she's in financial distress, but it is hard to get there. Chris had ample time to pay his loan. Chris could have taken a weekend job. He could have called the lender / servicer some time during the 90s to get it sorted out. But he didn't. I took out 130k in loans to cover my undergrad and grad degree. I paid it back in full.
Change the code to allow for bankruptcy but I don't feel like paying for another person's degree.
I tell my 12th grade students to avoid student debt at all costs. The community colleges are cheaper, much less 'woke' as people there are there for the classes and the degree, not to virtue signal, wave ride, and status jockey. I'll use this article as lens.