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.
"The first duty of any senator from Delaware is to do the bidding of the banks and large corporations which use the tiny state as a drop box and legal sanctuary. Biden has never failed his masters in this primary task."
So true. This all goes back to Walter Wriston and Citibank during the late 70's interest rate and inflationary crisis caused by petrodollars. This led bankers to realize that if things did not change quickly, they would be out of business soon. So they decided to move their charters to Delaware and S Dakota (and export debt in those states). They were chosen because of the significantly higher state usury rate --- allowing banks to charge more interest on customers beyond the national rate set at 12%.
This set a showdown and in 1986 we had the Marquette decision (first Omaha vs Marquette National Bank) and this allowed large multinational banks to be domiciled in states that have preferential usury laws, export their interest rates from South Dakota or Delaware to any US state and escape prosecution. This saved banking at the time along with new fiscal policy aimed at taming inflation at all expense.
And the result was that all major players in the industry moved to Delaware or South Dakota for their charter --- and protected their profits from this one battle they won in the State of South Dakota. Biden just happened to be a bankers bagman.
The Marquette decision was 1978, and involved Nebraska, not South Dakota. The decision allowed the ability of a bank chartered in one state (Nebraska, in this case) to charge interest according to the rules of that state (18%) while issuing credit cards across state lines into other states (in this case, Minnesota, the plaintiff) where those interest rates had (before the decision) been able to prohibit the higher rates as usurious (the Minnesota state limit on legal interest was 12%.)
South Dakota features in the story because of its newfound post-Marquette decision popularity as a state holding the charter for credit card companies- S.D. had no interest rate cap at all! And neither did Delaware. Although both provisions have been modified since then- each state has a different set of provisions, often with various exceptions. It's frankly too complicated for me to figure out:
more info here https://wallethub.com/edu/cc/usury-laws/25568 (but the map in the link claiming to show state-by-state interest rate comparisons has been disabled, probably because the laws keep getting modified.)
Appreciate the correction here Mascot --- I was going back from memory from 2004 interview of Elizabeth Warren on Bill Moyers years ago and how she explained it. Not sure how I got 1986 and 1978 mixed up but I did.
Minnesota and Nebraska now makes sense to me as you mention since there were no usury laws in S Dakota a bordering state and Delaware at the time-- something Walter Wriston said in that interview clip played by Bill Moyers.
Nevertheless, the banking industry fought a battle in Nebraska from which to use in Delaware and South Dakota --- and became a way to evade federal usury laws at 12% (whether it was 36% or 18 %). This is ultimately my point about politicians and banking --- less to do with dates and names (that industry will always be on the lookout for favorable jurisdictions from which to game the system and current laws).
And that the unintended consequence of going off of the gold standard, taking on petrodollars and inflation, caused the banking industry to seek new state domiciles, incentivized new products like credit cards (which were previously very difficult to get because credit was tight), and allowed banks to circumvent the federal usury laws.
All of this could have been avoided with states and federal statutes that anything over 15% is prohibited. But instead, new markets and products were developed as an end round to many people's detriment.
Yes, you got the gist of it right, and brought up a history that I think is terribly important- especially for Americans. But it's a history few of them know.
I remember learning about usury in one of my social studies classes in high school- I think it was Economics (do public schools teach that subject any more?) The rule of thumb I learned (in 1970) was that any interest rate 10% or more was loan sharking! Flash forward to my receiving my first solicitation from a bank for an unsecured line of credit, in the early 1980s- $600 at 14.3%, I think it was, soon to be followed by invitations to obtain credit lines at even larger sums, at rates of interest more like 17% and 18%. And I am all like "What is going on here?" I don't think I got the first inkling of the exact details for at least another ten years.
It's also worth noting that the first invitations were sent by banks no longer in existence, that failed or had their assets sold in connection with the 1989 Savings & Loan crisis- the first bank bailout, one that not many people even know of or recall happening. I think my first card offer was Great American Bank.
More finance history that most Americans don't have a clear picture about: as you noted, until the 1980s, credit cards were issued very selectively, and almost never used for consumer purchases unless one applied for a store-connected card, like for Sears, or Macy's. Credit cards were mostly associated with business expenses. Diner's Club and American Express were two of the most well-known cards; as indicated from the issuers, the main use for the first one was for restaurant meals, and the second was for travel expenses- especially foreign travel, as a more convenient elite substitute for the more commonly used "travelers checks" (remember those? not sure they even exist any more.) And there were credit cards for buying gasoline, issued by the service station brands; those still exist.
But it was the 1978 Marquette decision- iirc, along with some related legislation passed in Congress shortly afterward, by the Democratic majorities during the Carter administration- that set the wheels in motion to turn credit card payment into an everyday feature of American consumer purchases, encouraging both increased consumption and consumer debt dependency. When it's "buy now, pay later, incrementally" (forever), that new regime has a way of camouflaging a lot of wage stagnancy (actually wage decline), because workers with modest incomes are given the ability to possess and use the trappings of middle-class living with no money down. Meanwhile, the money that they formerly would have put into a savings account instead goes to paying into their outstanding credit balance.
Great question. Biden, actually, is obligated to issue an executive order on day one as President ordering the Department of Education to stop opposing student loan borrowers in bankruptcy court. Elizabeth Warren pledged to do this, and Biden SAID he was adopting her bankruptcy plan (with this EO being the most important part OF her plan). So, this will be a good early test of whether or not Biden is a man of his word.
Problem with Warren's "plan" is that her observations and ideas are based on bankruptcy petitioners, which is a highly biased and odd sample of the population. She should be asking whether the bankruptcy code is working reasonable justice in regard to the population as a whole. But she's not a scientist or a careful thinker, so she just wails about hard cases she sees in bankruptcy court, and can't envision the consequences of the changes she suggests.
Agree student debt should be dischargeable, but only under certain conditions. If you allow people immediately to discharge student loans, obviously nobody will make student loans, since students typically have no assets to secure the debt, and the creditor is unprotected. You can repo a house or car, but not an education. So making it difficult to discharge student loans makes some sense. But you need to allow for hard cases. Disability, physical or mental, changes in job markets that diminish the value of a degree, and so on. So you might give Chris a break, since he is obviously mentally troubled, and not capable of using his degrees to advantage. But you would not give a break to a CS grad who decides to be a ski instructor. And you would not give anyone a break in less than five years from incurring the loan, since the value of the educational asset cannot be properly assessed in such a short period of time.
Student loans should be treated in precisely the same way as all other loans in bankruptcy court. There is NOTHING that distinguishes them for special treatement. All the evidence we have from when bankruptcy was the same for student loans shows that only about 0.3% were discharged that way. Restricting, and then eliminating (essentially) the protection was precisely what cause the leding system to explode, and now catastrophically fail. The Founders (who themselves were being abused under debt to British banks and merchants) called for uniform bankruptcy laws ahead of the power to raise an army and declare war for a very good reason. The student loan exception to their wisdom proves their wisdom. In spades.
Also, you ascribe bad faith to the borrowers very inappropriately. The evidence indicates the opposite, and in the presence of what (at least on paper) look like very attrative repayment programs, newly minted graduates are highly unlikely to choose this route.
But this is really a pointless conversation now. The lending system is a catastrophic failure at this point. The default rate even before this pandemic was going to be 75%, if not higher. This is 4 times higher than the default rate for sub-prime home mortgages. At this point, the only reasonable solution is to simply cancel the loans, end the lending system, and replace it with a far cheaper, fairer, more efficient, and lower priced model for funding higher education in this country. Returning bankruptcy protections now would only ensure the bankruptcies of 20+ million people. This would overwhelm the bankruptcy courts to the point of seizure. It is time to take this lending system to the bath, and drown it in the tub.
Very true. It is a workaround. There are two bills in the House and Senate right now, HR. 2648 and S.1414, which would cleanly repeal 11 USC 523(a)(8). The House bill has made it out of committee (with two republican votes, actually), but the Senate bill is stuck in Lindsey Grahams Judiciary committee, and ultimately Mitch McConnell, majority leader. They still have a few weeks to pass this. If they REALLY wanted to do the conservative thing, and demonstrate to the rabble that the "invisible hand" actually can work for the little guy from time to time ,they would pass the bill. But...I'm not holding my breath. Idiots. They should have passed this BEFORE the election and with the 44 million people who would have been greatly helpes, would have given the republican party a new lease. Absolute idiots.
True progressives are in favor of it. Most of the Democratic establishment is against it because they have the support of two powerful constituencies that like things the way they are: the lenders and the educational complex.
Student debt pays good returns and has much lower risk due to the indentured servitude built into the system. College administrators and faculty need to get paid and states no longer want to provide tax money, so student loans allow the problem to be punted to the student.
I heard about a small town in the Midwest (forgot what town or state, sorry) where the people working the phones knew full well how corrupt the student-loan industry was, but they said "we can't quit--the money's too good."
My sister taught at a private business college and needed the work, so she looked the other way. The final straw was when the homeless were being signed up for her online courses and told they didn’t need a computer, just a smartphone. She knew she couldn’t do her job that way. The college was raking in the money from loans that were dead ends for everyone except the owners.
I don't see any "true progressives" in politics being in favor of it. All I see is loan forgiveness and free college, neither of which are going to happen now or anytime soon.
Dick Durbin is the best guy in the Senate on this. He sponsored S.1414. In the House, people including Jerry Nadler and John Katko (republican) have championed HR. 2648. These two bills could be passed tomorrow, and the House bill has actually been passed out of committee. The Senate bill, however, requires Lindsey Graham to pass it out of the Judiciary committe, and Mitch McConnell to get it to a full vote. It could happen before the end of the year, but at this point that would be pretty astonishing. We are fighting for this nonetheless...
The -110 page Biden Harris plan very clearly states its priority RE higher education is 1) forgive tuition for students from “oppressed” groups with special emphasis on those who attended HBUs
2) tuition free attendance T HBUs
3) cancellation of $10k federal student loan debt for borrowers earning less than $125k(?) - I’m not clear as to whether that debt cancellation is then considered taxable income but that’s too far in the weeds for purpose of my comment here
I think one of the secret truths behind all of this is that the colleges are petrified at the thought of ending their $100 Billion/year cash cow. I think that behind the scenes, the liberal elite are opposed to returning bankruptcy to student loans. To date, I have yet to find even ONE example of a college President even mentioning "bankruptcy" and "student loans" in the same sentence! Disgusting. I could give many other examples of "progressive" groups pretending like they are for returning bankruptcy protections, while they actually sabotage efforts to return it. People like Deanne Loonin, and David Bergeron (CAP) come to mind.
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.
The reason these loans are unforgivable in bankruptcy started under Bush the younger. You had medical students running up two hundred thousand or more dollars of debt and then filing bankruptcy to get out from under it, this was a modus operandi. Unfortunately, a lot of smaller fish get caught in the net. But if we choose to pay off the debts there should be also a taking over of the cause, stop the growth of administrative debt, stop all the diversity debt and etc.
Actually this is incorrect. The reason bankruptcy taken away from student loans dates back to 1977, when the media was seeded with stories about students flocking from graduation to bankruptcy court. Initially a 5 year "waiting period" for discharge was introduced, which was then lengethened to 7 years, and this was increased to infinity in 1998. Interestingly, we now know that back when bankruptcy was the same for student loans as all other loans, only about 0.3% were discharged in bankruptcy. So...there was NEVER a valid rationale for retricting, and ultimately removing this constitutionally mandated protection. See https://repository.law.umich.edu/articles/710/
Doesn't much matter what percentage of loans were discharged, question is what proportion of the dollar value of outstanding loans was discharged. Looking at the percentage of loans discharged is something a dumbshit lawyer would do. Tells you nothing at all about the impact of discharge on the loan program, because it tells you nothing about the dollar value of loans discharged.
I take your point, but the percentage of student loan borrowers seeking discharge in bankruptcy- particularly for comparion purposes with other types of loans- is very useful.
Not really since other loans are often secured loans. This is just like social services. Want free Healthcare then close the borders. Want bankruptcy allowed for student loans then you have to let banks decide who they want to loan to not force them to loan to everyone
Also, you appear to be keen to imply that a THIRD OF ONE PERCENT of the borrowers seeking bankruptcy protections could somehow imperil the lending system, which is laughable.
It's not laughable at all. Median student loan debt is only $17,000, but average is $32,700, and 600,000 of the 45 million borrows owe more than 200k, which is 12 times the median. So of course, a small percentage of high-end borrowers filing bankruptcy can have a very big effect. Thinking the percentage of borrows who discharge debts in bankruptcy is a measure of the cost is, as I said, an assumption only dumbassed lawyers or politicians would make.
A LOT. I suspect at this late date, returning bankruptcy protections would probably ensure the bankruptcies of something like 20 Million or more people. This would overwhelm the bankruptcy courts to the point of seizure. That is why the loans must simply be cancelled. Good stimulus there, at least, instead of painful, depressing, and un-stimulative unwinding.
What other debt would you like to cancel? How about folks mortgages? Oh, and don’t think I would benefit, I wouldn’t but others might. Maybe you could foot the bill for everyone. Pony up.
There are no other lending systems that are catastrophically failed. Also, there are no other lending systems that can be cancelled by the President that won't require money to pay for itSo..only federally owned student loans.
Really? Median student loan debt is $17k. Most borrowers are not recent grads, have non-exempt assets, and would lose them in a bankruptcy case. Average is $32k, which is less than the average new car loan ($37k). Portraying this as a debt crisis is asinine. https://www.forbes.com/sites/zackfriedman/2020/02/03/student-loan-debt-statistics
Nonsense you are ridiculous. The default rate for 2004 students was 40%. They were borrowing about $12,000 on average. Today, the average undergrad (and their families) are borrowing in excess of $40,000. 80% of ALL federal loan borrowers were either unable to make payments, or were paying but their loan balances were going up BEFORE the pandemic. It may not be a crisis to you, but it is absolutely a crisis for the 40+ million people who are headed for default. You quote Zack Friedman, amont the most shameless and unabashed DEFENDERS of this, the largest big-government lending scam in the history of the country. Shame on you.
Yeah this guy had a wife and got divorced all before paying off his school debt. Bet he bought a house and a car and other things as well. Probably took some vacations to Hawaii
actually I think it was Biden that made student debt not dischargeable in bankruptcy. Another of his accomplishments NOT for the people but the corporations/banksters. This is obscene...and so Amerikan and why the empire is crumbling faster and faster, circling the drain....
It was actually 4 medical students at the beginning. Not modus operandi at all. It is almost like being wrong in your analysis and your facts of the case are harming your ability to understand the issue.
Yes this seems like a better approach. The guy fucked up, he’s been paying the price, and the lender has absolutely zero incentive to work with him thanks to shitty legislation. They can legally drain his finances in perpetuity.
Yeah, extreme situations require extreme measures. Bankruptcy does seem appropriate for those hopeless cases. But if we excuse every regrettable choice, we’re going to create an entirely new set of problems. In bankruptcy the debtor feels a little pain. It pokes a finger in the eye. Leaves a mark. Pound of flesh.
But geez, “mistakes” hardly describes this guy’s personal shit show. If mistakes were an ecosystem, this guy‘s choices would be the weather.
The guy you’re trashing seems to have worked most of his life—including, in middle age, jobs that pay poverty wages. He’s paid $111,000 MORE than he borrowed, yet owes four times what he borrowed.
If you’re a sadist, there are dedicated channels on Pornhub and sports like MMA that might relieve some of that pressure. I’m not sure that smirking at the misery of 60-year-olds who are being victimized by banks is the coolest way to get your rocks off.
Some misery is bought and paid for with terrible decisions. Ask yourself how someone with a law degree was making such low wages? My lawyer is in bumfuck pa and charges me 500 an hour. There is always a shortage of defense attorneys to work for public defenders office and at least made 60k a year.
Are you fucking serious? Wagging your fingers at the borrowers- particularly someone who repaid HUNDREDS of thousands more than he borrowed, yet still owes HUNDREDS OF THOUSANDS MORE THAN HE BORROWED- of this lending system is entirely inappropriate. Please. This is not a bad borrower problem, the bad faith resides ENTIRELY on the lending system...what history will describe as the worst government lending scam in the history of our country. Give me a fucking break, guy.
I don't know what the general situation is, but the Chris story does not seem that predatory... Sounds like he basically decided to not make payments for a decade, very very seriously bad decision. Adjusting for inflation the amount he's paid isn't necessarily that crazy, and he did have the misfortune (or stupidity) of getting his loan in an extremely bad time for rates. As said elsewhere it's weird and probably nonsense that he can't just go bankrupt, but there's also major adult decisions this guy made that were awful and no one is that sympathetic to.
Nonsense, an entire industry of collection companies, guarantors, and others have sprung up that feast upon guys like Chris. If this were ANY other debt, he could have at least threatened bankruptcy, and gotten a fair and reasonable workout on the loan. Credit card companies, for example, routinely will forgiven interest settle on a fixed payment plan to recoup the principle, and be very happy with that. Last I checked, credit card companies are doing just fine, by the way. Since when have you ever repaid more than a HUNDRED THOUSAND DOLLARS more than you borrowed on anything other than a house, if ever?!! People like Chris aren't interested in sympathy, particularly yours. They are asking for JUSTICE, and they will get it, as the ENTIRE LENDING SYSTEM is now vanishing into a mist of illegitimacy. The default rate among all borrowers today is surely in excess of 75%, that is 4 times higher than the default rate of sub-prime home mortgages. It is catastrophically failed, and needs to be taken to the bath, and drown in the tub. It will cease to exist by popular rejection if nothing else. Whatever your opinion might be is irrelevant.
You said: "Since when have you ever repaid more than a HUNDRED THOUSAND DOLLARS more than you borrowed on anything other than a house, if ever?!!"
Really? Any time you borrow money for a lengthy duration this will be true. That's how compound interest works. If you borrow $100,000 for 20 years at 5% (compounded monthly), you will owe $270,000 at maturity. That is with no interim principal payments (I/O) but also no origination fees, penalties, default interest rates etc. The only reason this doesn't happen when you finance a car is because auto loans are typically 5 or 7 years. Reasonable people can argue about an optimal level of bankruptcy dischargeability for student loans, but let's not turn middle-school level math into some mysterious conspiracy.
Great. You claim to be reasonable. Let's be reasonable. By every REASONABLE metric or measure, this is a catastrophically failed lending system. The default rate for everyone with student loans right now is going to exceed 80%. That is 4 times higher than the sub-prime home mortgage default rate. It is now UN-reasonable to simply return bankruptcy protections, that will ensure the bankruptcies of more than 20 million people, perhaps far more That would overwhelm the bankruptcy courts to the point of seizure. We're throwing trillions in stimulus into the economy right now, including in the form of PPP loans that don't need to be repaid, and ALL of the stimulus measures add to the national debt. Given this, it is entire reasonable to cancel all federally owned student loans by executive order...in fact this is a far cheaper, easier, and perhaps more effective way to stimulate the economy where it is needed.
The only UNREASONABLE piece in this conversation is you attempting to defend and perpetuate the worst, largest, most unconstitutional big-government LENDING SCAM that this country, and the word (in fact) has ever witnessed. Good luck dying on that hill. I wouldn't, but hey, if you want go down that way...
Whoa whoa, no need to attack. I was openly admitting I don't know that much and just want to understand the system better. Matt's article pretty anecdotal, and I was having trouble seeing the systematic problem when Chis openly admits to putting his head in the sand for an indefinite number of years on something this important.
Seems like the lack of a bankruptcy option really is the root of this, and I'm fascinated by how that came to be. From your other answer, it seems like the "defaulting students problem" somehow got blown way out of proportion and legislated aggressively. But I'd like to know more.
Eddie, even the National Review is calling for the return of bankruptcy rights to student loans, along with an exit of the federal government from the lending program. This is another conservative institution who agrees with the need for the threat of bankruptcy to exist on hyperinflationary student loans. What might higher education look like with the government completely out of the lending business? Certainly prices would fall. https://www.nationalreview.com/2019/04/eliminate-federal-student-loans/
Consider what you are saying, you would garantee students free money to drink, fuck and hang out in college on loan money. Then leaving college having no assets and only debt, they could easily file bankruptcy and remove all debt.
I am okay with this if we go back to banks can decide who to loan to and the government doesn't basically back the debt. Of course if I was a bank I wouldn't do student loans for any degrees except engineers, doctors and finance. Also, as the bank I would like to repo the property I loaned the money for aka the degree. So if you went bankrupt after becoming a doctor you lose your license and the doctorate.
These "administrators" see a lot of incentive to partner with those who don't have student's interests at heart.
I hope these concerned taxpayers care about the number of lobbyists, and lobby money the Department of Education pays out to keep people lodged in an administrative state disastrous to the economy. Here are some items to fact check. Did the Department of Education sent lobbyists across the country and forty-four million dollars of lobby money from 1997 to the time John Boehner stepped down in October 2015? Did all that money go to those on the House Judiciary committee? How many lobby dollars have gone out since, and to whom?
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!.
Don't get me started on the colleges. They have conveniently ran and hid from this debate. NEVER have I EVER heard a college President so much as discuss the absence of bankruptcy protections from student loans, for example. Yet, they are taking in $100 BILLION per year from this predatory lending system:
Also: The colleges have managed, over the past 15-or-so years, to build up massive SLUSH FUNDS, over and above their endowments. This is largely unreported stuff here, but the amounts they have stashed away is jaw dropping:
On a larger level cost of everything pretty much has far out paced income for the majority of people so people have come to accept mass debt and trickle down has become reverse gravity up for what wealth there is in this country. There is increasingly no way out for too many people and that is not a good situation. It doesn't have to be this way - it's a choice by those in power.
There’s an excellent book called Failing Law Schools by Brian Tamanaha that answers some of those questions. It’s pretty bleak.
I agree with everyone above that universities have largely become predatory institutions—or, in the case of schools like NYU, part-time predators and part-time real-estate speculators.
Law schools can be big profit centers that funnel cash to the rest of the university.
Law school is itself one of the biggest scams out there. It's an exorbitant fee and hazing experience to allow you entry and initiation into what can be, without guarantee, a lucrative career. You come out of 3 years of law school a lot poorer and barely of any use in the practice. The only thing that teaches you how to be a lawyer is practical experience, hopefully under the supervision/mentorship of experienced lawyers. Law school itself is a joke. It can give a good ROI, in pure terms of cash-in/cash-out, though the requirement to make the investment is an artificial barrier. But in terms of ROI on the 3 years spent there, you're getting fleeced. Those three glorious years do not put you three years ahead of someone who never went to law school. Maybe 6 months, if I'm being generous.
I'm intrigued with the fact that in some states, it's still possible to "read for the law", pass the bar exam and be certified as an attorney at law without attending law school, or by attending only a year or so, or by clerking and learning the law codes on the job, and then passing the exam. This was once a very common means of becoming a lawyer. https://en.wikipedia.org/wiki/Reading_law
According to the Wiki link, 12 US presidents did it that way, including Abraham Lincoln.
As did 12 Supreme Court Justices.
You probably have to be diligent and self-motivated. But you'll save a fortune. I think that once certified in one of the states permitting that method, it's possible to obtain a license to practice in most of the others.
More from the Wiki page: "As of 2014, California, Vermont, Virginia, and Washington permit students to take the state bar exam after reading law with the help of an attorney as an alternative to law school. New York, Maine, and Wyoming allow students to study in a law office together with some period of time in law school.[7]"
This is why I am aiming for a master's in accounting. Only 1 year of coursework. I know I can learn anything on the job the problem is employers have so many of us plebs to draw from they don't need a well trained work force. They can simply hire someone else rather than provide advancement for those they employ. The only thing the master's I am aiming for will grant me is entry to the jobs where I can actually learn the business of accounting. Credential inflation is a bitch, but hopefully the masters degree shows I can jump through their hoops and am worthy of a job and maybe even guidance and mentor-ship. I am so sick of being a middle aged college educated administrative assistant. What the hell did I do to deserve this? oh yeah I did what everyone told me to do and just got a degree. I come from a professional family of doctors, scientists, IT professionals, and attorney's hence it was always preordained that I would go to college, but that was the scope of the options that were presented to me: go to school, get any degree, and the jobs will be laid before you. all that need be done is to walk the path to prosperity. I went to college to avoid the mindless data entry work I do. FML
This is way off topic, but when a Florida law professor was gunned down by a hitman in his driveway, a lot of people at first thought it was because he had a blog where he was defending law schools against this criticism.
Are there any villains, though? We are all just pigeons pecking the button that makes the food come out. If I was a university president, I would have a massive endowment, a praetorian guard of administrators and define my job as one of having lunch with extremely wealthy people rather than attending to grubby student needs.
I, for one, vote for the lobbyists who keep getting the lenders the legislation they want, as the #1 villains, with the politicians who are in bed with the lenders and lobbyist as a close second.
Sigh...there are no private lenders. The government originates almost all student loans for higher ed. Even before 2010, when the government completely took over the education loan market, the private lenders just originated and serviced the loans. The government guaranteed the loans. Banks were not then, and are not now, the issue in the education finance market.
Don't get me started on the colleges. They have conveniently ran and hid from this debate. NEVER have I EVER heard a college President so much as discuss the absence of bankruptcy protections from student loans, for example. Yet, they are taking in $100 BILLION per year from this predatory lending system:
Also: The colleges have managed, over the past 15-or-so years, to build up massive SLUSH FUNDS, over and above their endowments. This is largely unreported stuff here, but the amounts they have stashed away is jaw dropping:
An interesting comment on one of these stories about the exploitation of adjuncts: someone said "I bet every one of those tenured profs (who pretend to wring their hands and perpetuate the system) can quote Marx."
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.
Rick, my main problem with your thesis is that the the vast majority of students are minors when they sign the papers. Plain and simple this is a predatory system feeding on the naivety of our youth. Now you can rightly blame the parents somewhat, but the lower class has been spoon fed the lie that a college degree, not matter where it is from or what kind it is, is a ticket to the good life. That's just simply not true.
Also why don't we hold banks to the same standard? They *should* know better than to make so many questionable loans, it's their business to do so for crying out loud. Don't you think the banks guilty of making bad loans deserve to go bankrupt and have their shareholders eat the losses? Student debt should be made dischargeable under bankruptcy, and banks that make loans to people unable to pay should suffer losses for doing so.
“18 years old” is not a minor. It’s considered an adult who can sign and legally enter into binding contracts. We have an 18 year old son. We’ve saved for his college since he was born and will give him the gift of being able to start life post-college without debt. He also works his ass off doing any type of manual labor that pays. No coffee shop hours for him. It wasn’t easy but I’ve noticed one thing raising children through out this time. One of the problems with modern society is that we infantilize people in this age group (18-25) as if they are no more capable of dealing with life than a 5 year old. There’s no accountability and now instead of honoring debt obligations, everyone is clambering for debt-forgiveness. It’s a real mess out there and though I pity Chris in this article, he’s made some really poor choices through out his life.
Did you ever think maybe Chris lacked parental guidance? Poor kids often have disinterested or overworked parents. I was one. I made bad choices but didn’t exactly have great role models growing up. Also, at 18 I had no clue how money worked. I worked summers in tobacco making a little money to buy some clothes for school. I learned to drive whenI was 18 so basically had little social life other than church or reliance on friends or school activity buses. People need help.
To be clear, almost all student loans today are government originated and sold. Banks aren't pushing student loans on anyone. A small handful of PEL lenders like Sallie Mae exist almost exclusively to do the gap lending and almost all of those loans are parent co-signed.
Fuck. Simply telling a child, and at 18 I had no idea what I was doing and was absolutely a child, that all they need is a degree is god damn criminal. All I was ever told was go to college and get a degree. It doesn't matter what your degree is in. Forget the money and just focus on that advice. I am so fortunate to have no college debt and STILL I have no viable career. Writing all of those papers about NGOs, ISLM curves, global governance, political theory, and public policy did fuck all for me in the workforce where all I do is mindless administrative work. Is weed federally legal yet?
It's disingenuous to tell kids that people with college degrees make more than those who don't. Correlation does not imply causation and a piece of paper does not magically transform you. It also is wrong to treat all college degrees as equivalent, and degrees from different universities as equivalent. It is also a bad idea to forget economics and follow your passion unless you are born into wealth or have extraordinary talent. If following your passion won't pay the bills...well, that's what hobbies are for.
Since 2010 as part of the ACA the feds took over most origination. Before 2010 the majority of all student loans were from private institutions. Since 2010 less than 10% originate from private institutions. The majority of debt is now held by the federal govt. But the point stands that when the law was passed it was a giveaway to banks.
No, it wasn't. Under the FFELP system, private education lenders originated the loans, but the government guaranteed the loans and even subsidized the servicing and default collection costs.
Not so. The "vast majority" of college students are NOT 18 when entering college and signing loan papers. Further, virtually none are minors when signing for their second year or grad years.
While there are certainly some who are 17 when entering college, they do not by ANY stretch comprise a "vast majority" of Freshman.
The 24 hours between when they turn from 17 to 18 gives them enough worldly knowledge to assume massive amounts of debt, not not enough to purchase a beer? That's the hill you want to die on?
Obviously the hill YOU want to die on is the one where you defend, justify, and perpetuate what history will record as the most largest, most unconstitutional and nationally threatening GOVERNMENT LENDING SCAM this country...and in fact the WORLD has ever seen. Nice job. Take a bow. And please...accuse me of hyperbole. I dare you to.
It's not untrue. They can't even buy a beer. They have no life experience. They have no assets and no job. Are you going to argue that everything that's legal is also moral?
Your silence on the banks culpability is deafening. For the third time, why do the lenders need special legal protection?
Also, you neglected to answer the question about the banks. The banks absolutely know what they're doing. Why do they need to be protected from these predatory 18 year olds?
If these students aren’t smart enough to read a loan agreement, can we roll back all of the privileges and obligations we’ve moved from 21 to 18, please? No more drinking, buying tobacco, voting or enlisting in the military for them. They aren’t mature enough it seems,
I'm not sure what this has to do with holding banks liable for poorly performing loans, but sure, i'll address your questions:
1. On alcohol- Students can't drink until 21 in the US. Since you didn't know that the drinking age must be 18 in your country. Tell me, Rick, where are you from and why do you feel so strongly about student loans and bankruptcy laws that don't affect you? I find your motivations peculiar.
2.On smoking- I'm all for pushing tobacco back to age 21. It's a bad habit and a public health nightmare. Kids don't know what they're doing when they get hooked on tobacco. Studies have shown that those who pick up smoking at a young age have a much harder time quitting later. I'm glad we agree.
3. On voting- Younger kids mostly don't vote and i'm sure a healthy discussion could be had on that topic.
4. On enlisting- Enlisting fresh meat for the grinder into the forever wars is a privilege now is it? If it's such a privilege how come more elites don't enlist their children? That aside, even if you enlist you can always leave no questions asked during basic training. After you're on active duty, the army can discharge you if you cannot perform your duties due to physical or psychological reasons. You can also be discharged for other less honorable reasons, but the point is that you can get out. It's easier to quit the army on active duty than it is to discharge student loans. How sad is that?
Now that I answered your questions, how about you answer mine. Why can't the banks be held accountable for the bad loans they issue?
I disagree with every single one of your statements. Pushing the age of adulthood back to 21 didn’t make for more mature 21 year olds. It made for less mature 25,26,27 etc adults. The sooner people can take on real responsibility the better. This baby-ing of perfectly capable adults has to end.
It’s really interesting to see how much schadenfreude people can dish on the Internet and Rick here is quite a champ. The logic displayed is always so simplistic and vapid. “Look at me! I took out a loan around the same time you did and it all worked out! I’m smart! You dumb!” I did what you did and didn’t fuck up, so obviously it’s your fault.
I could go down the list of misfortunes Chris dealt with that weren’t really his fault again (though of course Rick would find a way to blame him for them anyway) and I could point out how Chris has admitted to making big mistakes. I could also point out how he has tried to make good despite his misfortunes and mistakes, including paying over double his loan amount while still owing over 3x the original amount. I could do all that, but that obviously won’t make a difference to Rick here, because he is a giant asshole.
Your righteous indignation fails you. IF the advocate (Matt Taibbi) for forgiving misfortune wants to use an anecdotal fairy tale of woe, then it is perfectly acceptable for the opponent to use an anecdotal fairy tale of success. Neither offer substantive information on the case and plan for which they argue.
Of course, useful and substantive information isn't really the goal in this kind of plea; fleecing the taxpayer is. And tugging at heartstrings by showcasing the hard luck of what may be an insignificant few is the favorite tactic of the swindler.
Nonsense. The "Taxpayer" (actually the Department of Education in lockstep with their crony, politially connected contractors) have been milking the borrowers for a King's ransom for decades under this unconstitutionally predatory lending and collection regime. Did you know that the Department of Education started booking profits of about $50 Billion per year starting around 2012? Did you know that some of these profits are used to fund controversial programs like Obamacare? No, you obviously did not. Did you know that the Department of Education has, astonishingly been making a PROFIT, NOT A LOSS on defaulted loans going back to 2004 and before, in the absence of bankruptcy protections, statutes of limitations, and other fundamental consumer protections? No you didn't. Did you know that the Department of Education fights TOOTH AND NAIL, behind the scenes, to keep bankruptcy AWAY from student loans? No. Why would you. This is now a CATASTROPHICALLY FAILED lending system. The "Taxpayers" have pushed this lending system to the point where we now are looking at t default rate of over 75%, perhaps WELL OVER 75%. This is about 4X the default rate of subprime home mortgages. This lending system is done, finished, toast, FAILED. You might not like that FACT, but that is your problem. The "taxpayers" created and perpetuated this lending scam, and now they, along with you and I, will be watching it vanish into a mist of illegitimacy. No one here is seeking your approval or you admonishment. Your opinion, frakly, is irrelevant. If you have thoughts about what the next higher education lending system should look like, great...let's hear it. All else you might have to say is just snarky insinuations, insults, and babble.
This is a great example why the Federal government should have stuck to its knitting, running the departments of State, Defense, Justice, Interior, etc. and stayed out of the transfer payments business. It creates ugkynkeviathans like this that satisfy no one - the takers want more of it and the makers want less of it amd that’s how it gets twisted into something horrific.
Yes, the default rates on student loans are higher than subprime mortgages. But that’s only because the 13th amendment prevents the government from repossessing the borrowers- the containers of the object of the debt, whereas secured lenders were able to take possession of the homes.
Taxpayers - true taxpayers - didn’t create this problem. Consumers of the product did and they did so with relish. They wanted subsidies and they got them. The aspect of the program that bites them on the ass now is that back when people were less grabby and demanding, the program was built based upon a quid pro quo - we won’t underwrite and price the loan based upon sound economic principles and thus, you can’t get out of it if you screw up or if life smacks you in the head.
Again, this is what you get when the central government, with an unlimited printing press colors outside the lines and expands into areas best left to state and local government.
Lol. "Consumers of the product", meaning the students, had NOTHING TO DO WITH THE CREATION OF THIS BIG GOVERNMENT LENDING SCAM. This was a creation of Sallie Mae, in concert with the Department of Education and the colleges....ALL OF WHOM are making out LIKE PALACE THIEVES. You clearloy need to learn something about this uniquely predatory, unconstitutional, nationally threatening lending system, buddy. We're probably at an 80%, if not higher default rate. THis is 40+ million real, live TAXPAYERS who are being conquered and enslaved to the great benefit of the government, and colleges, the lending swamp, and NO ONE ELSE. Why don't you read up a bit on this lending system before speaking about it?
Nonsense. You're facts are WRONG. The TRUE, LIFETIME default rate for 2004 students, we now know, is over 40%, and that class of borrowers was only borrowing around $12,000, where today the average undergrad (and their parents) are leaving school with over $40,000 in loans. You are putting up some transitory metric, probably lifted from highly inaccurate Fed data that means NOTHING. Also even the most generous calculation of average student debt is $1.6 Trillion/44 million is $37,000 per borrower, and again, that $1.6 Trillion does not count a tremendous amount of interest (interest on loans in default, for example), so the TRUE debt per borrower is closer to $44,000. Further more according to Mr. Wayne Johnson, who RAN the federal lending system under Trump, 80% of all federal loan borrowers were either uunable to pay (~65%), or were paying but their loan balances were going up (~15%). BEFORE THE PANDEMIC. Maybe you should stop the whole "google expert" ruse. It is not impressive, and not helpful whatsoever to discerning the truth about this catastrophically failed lending program.
You called this story an "anecdotal fairy tale of woe." So, this is a fiction? A lie? You come here because you think Taibbi is lacking in credibility and want to call him out on making shit up?
You think this is "the hard luck of what may be an insignficant few." 1/6 of all Americans are saddled with student loan debt. It's the second highest form of debt behind mortgage debt, higher than credit cards and auto loans.
People can't discharge this debt even if they have legitimate reasons for being unable to repay it, so obviously it's a low risk proposition to hand out student loans to whoever comes in for one.
I disagree. The more people eligible for a benefit, the more you enlarge the pool of people who are not part of the target audience. Look, for example, at the current deferral of all student loans. There are plenty of people out there who were paying and can afford to pay and feel that it’s free money not to pay. Just like the PPP loans that went out based upon payroll rather than based upon need.
You conflate having a student loan with not being able to repay a student loan. That is of course, a illogical. To suggest that 1/6th of all Americans share Chris's plight is comical.
Actually, the two are nearly synonymous. Wayne Johnson, who RAN the federal lending system under Trump, told me just before the pandemic that 80% of ALL BORROWERS were either unable to pay on their loans, or they were paying, but their loan balances were increasing. That was BEFORE the pandemic. We were headed to a default rate on these loans of over 75% before covid hit. This is now a catastrophically failed lendinng system. Time to take it to the bath, and drown it in the tub. It is vanishing into a mist of illegitimacy, and there is nothing that you or I can say or do to alter that fact. Inculcate that. Not quite so comical when you do. https://studentloanjustice.medium.com/the-conservative-case-for-cancelling-student-loans-9e085a168972
Perhaps Chris shouldn't have taken all that money in the first place and should have been content to love freely and count on the kindness of strangers who don't mind material wealth. But is it really fair to ask (force) those who do find happiness in wealth, to share what they slave all their lives for, with the evolved children of Aquarius who find peace love and understanding to be "what it's all about"? SOMEbody's gotta go to work to put food on the table and a roof over the heads of all those evolved souls.
I appreciate your thoughts, here, but this lending system is well beyond repair. The government will likely never see even $.20 on the dollar for the junk loans they are sitting on, by and large. It is far better to simply cancel the loans, and end the lending system at this point. Call it stimulus. I suspect that Trillions (not just the few hundred billion that is actual unpaid principal for the federal loan porfolio) have been thrown out to wealthy individuals in stimulus that did not deserve or need it. If 10-15% of student loan borrowers wind up with a benefit they don't necessarily need, it is by far and away worth it to have the other 30+ million people out from under the weight of this oppressive debt. Also ALL federal student loan borrowers are determined to be "financially needy" as a precondition for receiving the loans, so this is nothing like (for example) the 43,000 millionaires and billionaires who just received an average of $1.6 million in pandemic stimulus. See Change.Org/CancelStudentLoans
There is such a thing as emotional capital as opposed to economic capital. If you choose to follow your muse, work less hard, spend more time on to recreation, you are acquiring a form of capital that someone who takes on a nose to the grindstone approach. How you spend your is a form of capital allocation. Having made your decision to,follow your muse, etc, it’s pretty annoying to listen to whining about income and “inequality”
Chris was making $28,000 a year in the 21st century. If you purchase an undergraduate degree and a law degree and make considerably less than a full time nanny makes, your life has gone badly. There's nothing more to say here.
You comment betrays your ignorance on this topic. This is, and really was never a "bad borrower" question. We are looking at the slow motion evaporation of the worst big-government lending scam in the history of this country. The borrowers have not changed significantly since the 1970's. What has changed is the lending system, and the prices that the colleges now charge. When 80% of all borrowers were either unable to make payments, or were paying, but their loan balances were going up, this is a catastrophically failed lending system. You sitting on your perch, looking down your nose and wagging your judgemental fingers at the innocent victims of this vicious lending scam has absolutely zero value. Frankly, it is an embarassing thing for you.
Your comment betrays your ignorance on this topic. There was ALWAYS a “bad borrower” question. Of course there is a lending scam, but it is one played against the American taxpayer. Once the Feds got involved, they NEVER underwrote the loans. They never looked at the quality of the courses that the borrower was taking and whether it would lead to a degree that made the borrower employable. They never required a parental guarantee which not only would provide credit support, but would also provide some oversight regarding the courses and degrees the borrower would pursue. And on top of all that, they loaned at preferential interest rates relative to the quality of the credit - a deep discount. More of the welfare state. You’re sitting on your perch, looking at hard working people who played by the rules, took on debt and paid it or avoided it by working their way through school and you wag your judgements fingers at the innocent taxpayers who are already paying for a ton of handouts already and want to lay more on top of them has absolutely zero value. Frankly, your left wing gimme gimme gimme attitude is an embarrassing thing for you.
Okay, but: what kind of world do you want to live in?
One where worthless, stupid losers—people who aren’t as admirable as you—get crushed to further enrich the worst people and institutions on earth?
In other countries, college is free. Here, college is described to teenagers as basically essential if you want to be a full human being. The media, teachers, and one of our two political parties endlessly repeat the message that “college = success and no college = failure.” Obama has convinced the NPR crowd that that a college degree is a cure for poverty.
People who aren’t as excellent as you make mistakes when they’re young. They impulsively join the army. They let colleges and relatives talk them into getting degrees they can’t afford. They don’t read the fine print. Some of them deal drugs and end up serving time.
I get that it sucks to be so much stronger, smarter, and better than others, and never receive a prize or the recognition you’re due, but: how exactly do you gain from watching someone’s meager wages and retirement checks be garnished long after he’s paid back 220% of what he borrowed?
There is something known as the law of natural consequences. Touch fire, get burned. Make foolish financial decisions, lose money, incur large debts.
Someone pays 200% of what they borrowed, including penalties and loads of interest because they didn’t meet their lawful obligations that they freely assumed. That’s how things work. Anyone who has taken out a mortgage gets a disclosure by the bank under the Truth in Lending Laws. Many people are shocked by it because it has to disclose how much in interest and principal you will pay over the Logan’s term. Thus, for example, if he borrowed $100,000 at 7.5% when Rick was 29 years old (reasonable amounts and terms at then time) on 30 year terms, he’d have paid....wait for it...$240,000 over the term of his loan or 240% of what he borrowed.
Ah, yes, but you say Chris still owes a ton of money. Yes, perhaps because he didn’t take his debt seriously. He seems to have thought that he made a deal with his lender that somehow THEY were responsible for his ability to obtain employment sufficient to service the debt he freely incurred. As if they were responsible for his choice of what to major in, what school to go to, what jobs he’d take and where he’d live. He behaved as if his debt was optional - not paying it for periods of time, incurring large penalties and piled up interest that began to compound like topsy.
And yes, I was wise enough to take things seriously and responsible enough to do without things and experiences that allowed me to get out from under my debt. What would you do? Rescue every one who underperforms? Why should that be a cost that is borne by others? I guess we should eliminate all bad consequences in life. Why do they give out only one gold medal at the Olympics when maybe 30 people compete? Its not fair! Bwah Bwah Bwah!!!!
You would eliminate moral hazard in life. Consider a loan an “option” that will be repaid only if it works out for you.
Your post assumes that huge swathes of the population are losers who are gulled into making poor choices by misinformation. Can it be that so many Americans are that gullible and foolish?
And how do you measure success? I grew up poor, the son of immigrants. Many of my friends didn’t go to college - they became cops, fireman, grocery store workers. They live within their means and are not “losers”. They were serious minded people who understood that college was not for them and are mostly happy with their lives. Others did go to college and there is a spread of outcomes, from amazingly wealthy to unsuccessful. That’s how life works.
The question is how you define success. By money in the bank? He who dies with the most money wins? I know plenty of miserable people who have lots of bank. And why do you feel the need to define success levels in a comparative frame of reference? The happiest guy I know is a retired cop who never earned $100,000 in his life, who still works after retirement to pay his debts, loves his family and smiles all day long with his lot in life. He’s aligned his needs and his wants with his resources, has a happy family life and loves his job.
If you drink the Koo-laid offered by “THEM” it’s your own fault. Everyone in the world doesn’t have to pay for your mistakes.
And as to other countries providing educations without cost, don’t kid yourself. There is no such thing as FREE. Someone is paying the bill. You seem to just want something for nothing and are angry about the amount of coin in your pocket, relative to your appetite and how much others have achieved.
Rick has a lot of platitudes about morality and responsibility, but the truth is he is a sick and twisted individual that spews a lot of bullshit to justify being an asshole.
Chris: "Hey, I know I fucked up, but this is really difficult to deal with, can I get some help?"
Rick: "No! Fuck you! HA HA HA HA! Look at how stupid you are! You fucking dummy! You should have been smart like me, then you wouldn't be suffering!"
It's a pretty disgusting world where people have bought into this mentality that individuals fucking society over under the legal fiction of a corporation get to duck personal responsibility, but individuals getting fucked over by corporations need to eat shit and like it. People like Rick make it all the worse by actually taking pleasure in the misfortune of individuals and jeering right at them as if this is some game he has won and Chris has lost.
So perhaps you'll be sending Chris a check to help him out?
Name calling and ad hominem attacks are not really forms of debate. This is a comment section where people express opinions. Is it possible for you to disagree with Rick without implying he's an asshole filled with bullshit? Asking for a friend.
Rick's a big boy. I don't appreciate people attacking others here for language, frankly. That is a form of censorship, and in itself poisons free speech. I appreciate Harvey's choice of words. If we need the PC cops to come here and clean the place up, we'll call you.
Every last one of us is and has been a loser at one point or another, for short or interminable periods, struggled, been humbled by life, thought we couldn't get any lower, and yet still did. Many of us never recovered, many of us overcame. So it's not the lot in life you've been dealt that determines your worth or whether you're a winner or a loser. You're the one putting people in this categories and reserving your contempt for those who don't loudly take pride in and blame others for their losses.
Well that is your opinion and you're welcome to it. Obviously, others disagree with you as evidenced by their choice of words. It's called free speech, and I for one am ALL FOR IT. If you are insulted, offended, or hurt by the syntactical choices that others make while expressing themselves so much that you choose to comment on that rather than the substance of the debate, you only serve to distract and and confuse the debate. Notice how absolutely nothing in either my comment that I am typing RIGHT NOW has NOTHING to do with the subject matter? Yeah. You caused that. Knock it off. Stick to the topic.
Rick you're making a logical fallacy by implying since Chris made some stupendously bad choices everyone who took on student loans is guilty of the same. But 17 and 18 year old kids were fed propaganda about how they needed a college degree all the way through high school and were lied to by their guidance councilors and admissions staff. This was plain and simple wealth extraction from the younger generation to the older. The kids who naively signed themselves into nondischargeable debt that they cannot service deserve some compassion. The banks, who know better and lobbied for this exact situation, are the ones who deserve our ire.
I don't support completely forgiving the loans, but situation right now is unsustainable and unjust. At a minimum the following should be done:
1. Allow refinancing to a low interest rate. It's a compromise between doing nothing and forgiveness.
2. Allow discharging of student debt in bankruptcy.
3. Make it mandatory that when payments are set up a certain percentage goes towards the principal. Interest only payments should be illegal.
Nonsense. What, exactly, is NATURAL about a lending system from which every consumer protection (that exist for EVERY other loan) has been stripped, unbeknownst to the borrower, such that guys like Chris can see an $80,000 loan be artificially JACKED to a HALF MILLION DOLLARS OR MORE?!! LOL. There is nothing "natural" about this, you douche.
You’re out of control with your name calling and personal attacks. I recognize you have some preeminent knowledge and experience in this area. But for someone who wants to educate other people about an injustice, you sure are unjust in your general nastiness
Nonsense. I'm DONE with "up by your bootstraps" DOUCHES like what we see from the commenter above trying to lecture us on hard work, financial management, etc. This is not a problem that benefits WHATSOEVER from such comments. In fact, such comments only serve to kill the conversation that needs to be had about this unconstitutional lending SCAM that will go down as the largest not just in US History, but world history. We are at the point now where people fleeing the country and even KILLING THEMSELVES as result of this debt being inflicted upon the country, which is literally conquering and enslaving over 40 milliion people in this country, and threatens to ruin far more as long as assholes like this guy are allowed to interrupt this conversation with their nonsense. I don't appreciate you trying to assume the position of PC police here. Let this guy respond as he wants. Neither he, nor I need you stepping in the middle to call PC balls and strikes.
Nothing is free. Someone always pays. In this country, 45% or so pay nothing and more pay relatively little. So it’s easy for them to say I want more....
I agree. There are far too many people who lack the desire to provide for themselves. Too many people who have gotten too comfortable in the safety hammock of the nanny state.
That's true. College tuition is not "free". Germany for example, where my brother teaches, has very high taxes, few private colleges, and far fewer people going to college. This enables the government to subsidize higher education significantly. However, they also have a very strong apprenticeship program and people know that they can make a respected and good living in the trades. It's also a more equal society. People feel less pressure to take a huge gamble on a private college or some degree which they are ill-suited for in the hopes they can stop living paycheck to paycheck, or finally get decent healthcare via a better-paying job.
Good point to mention Germany. They have Hauptschule, Realschule and Gymnasium. Basically, you get sorted into a track based on what your academic abilities are. The Uni's also have limited space and there are decisions that we need X number of dentists, so let's put those in the pipeline. And of course, no student gets fleeced $40k to get an AA in culinary, there's an apprentice system in place.
There's plusses and minuses to this. Late bloomers would be out of luck or on their own to try and start something new. But I think that's a more realistic approach since you're not burdening those young people with debt. Most of Europe has low to no-cost education, and is friendly to non-Europeans going there to study. It's not free, but compared to America, it's a screaming bargain. You can get med school for like $10k a year for non-residents.
Good rundown of the times. I graduated in '78, just before the big pushes started to get everybody to go into hock for that parchment. I took out no debt because my folks made too much money and the system was not going to lend me anything. So I ended up doing it by myself- lived very simply- almost deprived in a sense.
But the system is predatory, or at least got increasingly so through the 80s. This is a classic case of the elites losing any connection to the citizens. I understand your questioning of just how educated a person really is if he doesn't pay attention to his world. You're right on that. But I do have a lot of trouble with a system that blatantly lures people into servitude. It's not what a sane, civil society does to its people.
But that seems to have become the American Way. And by the way, IMO college is currently more scam than not- the debt is only part of it. I won't be encouraging any of my 3 kids to go.
You do your 3 kids a tremendous, if not cruel disservice. Learning is one of the great joys in life. The 4+ years of college foster an open mind that sates the curious and discourages a mindless existence. It's not about the riches they may go on to make. It's about feeding the single greatest gift man has over the beasts of the field: knowledge.
I am not disagreeing with you in principle, but the idea one has to subject themselves to the current system to enjoy the discovery of new ideas and learning about the world is hugely mistaken. I AM disagreeing that 4+ years of college “fosters an open mind and discourages a mindless existence”. I live in an elite university town (Evanston, NU), and I am continually amazed at the extremely narrow intellectual and ideological bandwidth of the professoriat; I’ll spare you the examples. To think that the current university system holds a monopoly on learning about the world is a misguided perception.
I don't typically deal (or argue) in absolutes. In fact, the college experience DOES foster expanded learning and intellectual growth. It does not guarantee it, and a community college probably doesn't offer the same fostering as an Ivy League experience. Nor does a community college cost what an Ivy League school costs.
Sending your children out to experience the world and attend the fabled school of hard knocks is certainly an option. But you'll not convince me it's a better option for fostering intellectual endeavors and the joys that accompany them.
As for narrow minds and narrow perspectives, education is not always a cure, and I agree with you that often education can foster a narrower mind rising out of arrogance (I'm educated so I'm right).
I’m not trying to convince anyone of anything. I don’t believe the school of hard knocks is the smart way to pursue one’s life. I am saying that imagining a 4+ year degree at (an American) university is the way to enlightenment is an astoundingly small view of how to live in the world. Your observations about arrogance are spot on. I have actually had people debate me by saying “I went to Stanford” as the trump card in their argument. Here’s an idea.... I live a good chunk of my year in China, Wuhan to be exact. Spend a few grand, attend a Chinese university. You’ll learn more about the world than you’ve ever imagined.
I studied the politics of China while in college. I studied the politics of the USSR while I was in college. Both were fascinating, and prompted me to go to both China and the USSR. I likely would not have put either on my vacation bucket list had I not studied them in school first. In fact, had it not been for the opportunity presented to university students to study in the USSR, I likely never could have even gotten in to the country in the first place. Oppressive communist regimes don't really make hot tourist attractions, but the incredible history, culture, politics, and sociology of the countries that I learned about while in school led me to them and I was the richer for those experiences; experiences that help me today when looking at a lot of the problems in this country (most notably the demise of our free and independent press, lamented by both Taibbi and Greenwald here on substack).
I find it interesting that institutions of higher learning are so scorned by absolutists who look at the limitations of those institutions and argue them as absolute and therefore worthy of scorn, contempt and disparagement. Perfection being the enemy of good, I would never encourage my kids to avoid opportunities that, imperfections and shortcomings notwithstanding, provide an environment so fertile for intellectual rigor and growth. Opportunities, again, a key word in my position, are entirely what a person makes of them. And there are few places in the world offering more opportunities for everything from learning to make a bong out of an apple to pondering existentialism and that wondrous universe beneath one's thumbnail.
"I have never let schooling interfere with my education"- Mark Twain
Did you by any chance produce colored brochures for colleges to entice freshmen to attend and their parents to pay the bill?
The claim that college fosters an open mind is bullshit and just not true. At one time perhaps, but currently? No way.
The college route offers a very limited view of the world. Here's my experience: 4.5 years to get a degree in Range Management (grazing, soils, forage plants, animal husbandry). Right out of college got a job with the Forest Service in Nevada as a range rider and wild horse tech and occasional fence builder. What a life! Wasn't just a job or a lifestyle- it shaped me. 14 hrs/da in the saddle (got paid for 8, but I didn't care), 10 days on 4 off, on my own just me and the horse (or mule as the case may be- the source of my title in these comments). Did that for several years before going back into wildland fire where I made my career. And that career, being seasonal and all, allowed me to see the world. No college needed.
Only needed that degree to get that initial job, since then never really used it though I will admit to still having an interest in range. So there is that.
But, any given day on horseback or on the fireline grants me more adventure, excitement and learning than 4 yrs total of college ever thought of doing. In just one day! Get the perspective? It's out of all proportion.
Riches? Not from working, no. No debt either.
Think abut this: I could send my kid to school for language study. He takes 1 hr/day 3 days/week. At the end of 3 years he does ok. But put him in Peru- their Spanish is clear and beautiful- do a home stay and individual studies and he'll come out in 4 months speaking like a native, with incredible personal experiences. Conversely, what does he do in college after class- go drink beer or paint his face and go to a lousy football game? You're way over rating the college experience IMO.
oh yeah my vast knowledge afforded to me by my liberal arts political science degree sure gets me interviews at companies that want very specific skill sets and experience not someone "who can learn." My first professional job with my fancy university degree was working for Harris Teeter cleaning mop sinks with my bare hands for $8.50/hr. I value my degree greatly, but that doesn't pay my bills or give me the career growth I so desperately need to stave off rising healthcare, HOA dues, and food costs. I wish I had been told to become an electrician.
I'm sorry you've been unable to make the most of your college education. Perhaps it's your interpersonal skills that, as evidenced from your post, have failed you, not your education?
My fourth job was working 10 hour shifts on the manufacturing line where they packaged the medicines produced from the plasma donations for a whopping $12/hr. I went to college because I was told I would work at the factory without a degree, but I had to work my way UP to factory work. You can have your knowledge. It is worthless.
"And I’m getting tired of the deflection of attention to BIG CORPORATIONS and their bail outs."
I hear you, but I'm getting tired of politicians and talking heads who deflect blame to debtors. Yes, they could have been more responsible with their money and they weren't, or they thought they couldn't be. Blaming them for causing their problems is well and good. But I can't help but notice that attention is being deliberately drawn away from the bilker and the conditions that enabled them. Am I supposed to believe that the debtor put the paperwork in front of himself and scammed himself in a vacuum?
I don’t see the scam. I read the papers. I saw the penalty provisions that applied if I missed payments. I knew that the interest rates could rise. How is it a scam for the government to borrow at 14% and lend to me at 9%?
I joined the Army because it allowed student loan interest to be suspended during the first 4 years of service. I paid of the debt in those four years and essentially used the bank’s money for free. Let’s face it, Chris was plenty smart and got himself into a jam by refusing to make adult choices and sacrifices because he figured someone would bail him out.
I think the reality is the exact opposite of what you said. Chris, sitting there in 1981 (40 years ago damn near!) did not plan to purposely get himself "into a jam" and "figure someone would bail him out".
Yes, but older Chris made interest only payments for decades. Older Chris could have made more than minumum payments, but he made the choice not to. Older Chris purposely defaulted. That Chris should live with his life choices.
Once the debt had those crazy default amounts tacked on to it, and at 9%, probably interest only was its own big amount. I don't think Chris should be living with the decisions of predatory lenders.
I agree in 1981 Chris wasn’t figuring that “Someone would bail him out”. However at some point he made a decision that he had bigger fish to fry than the student debt and he “made some mistakes”. I’m about Chris’s age and have had friends make those same decisions. Not to be a hardass but decisions do have consequences. How about a timeline with #s about this debt? How many years did he make no payments? How many years did he make minimal payments. Without that it’s hard to be sympathetic.
I bet that there is a whole generation of student borrowers who have had these things since the 80s, and that is the first group who should get cancellations. No way have they paid less than the actual value of that degree.
How many MILLIONS of dollars did the taxpayer shell out for your time in the military? AND...the taxpayer, even further, helped you bail out your loans too? And you're wagging your finger at this guy, who paid A HUNDRED THOUSAND DOLLARS more than he borrowed? Nice. Who, between you, actually got bailed out by the taxpayer? SMH
I'd say the US taxpayer gave you just about everything, yet you here are wagging your finger at a guy who repaid more than 200% of what he borrowed, yet owes 300% more than he borrowed.
The military sued the Department of Education multiple times. However, average civilians couldn't afford an attorney, let alone find an attorney willing to take their case.
You agreed to kill people or be killed by other people in order to pay off your student loan. Now you might not have actually had to do that, but in the end that is what the agreement was for.
Not sure where you’re going with this comment. If you’re thinking I was incapable of paying off my student loans absent joining the Army, you’re wrong. If you’re thinking the interest-free deal was only for serving in the military, you’re likewise wrong. You could also get the deal to suspend four years of interest in exchange for other public service including working as a public school teacher and service in the peace corps.
No you made a deal. That deal was I'm joining this organization and it's job is to kill people so I get a better deal on my student loan. Whether or not you were capable of paying them off any other way is not the point of my comment.
Loan providers are massively profiting, and tens of millions of students are being profited from, on the basis of increasingly expensive diplomas of increasingly questionable value. You made the best of the deal you received, but many students aren't smart enough, careful enough, or fortunate enough to escape their debts.
What's more, a continuous stream of unaware students has been 100% guaranteed. You ask below "where was the gun at your head making you borrow?" How many schoolkids think that if you have a B-average or higher in high school, your only option is to go to college? How many of those have a teacher or parent who will tell them otherwise? (Is it their fault if they don't find out there are other options until it's too late?) Society is the most persuasive gun there is.
True, the college line is now pushed obsessively. The trades are sneered at, even though it's a better path to financial success. I get that it's not for everyone, but it's being almost completely ignored by school counselors.
For that Chris guy, he's better off changing identities, working under the table, then hit Medicare when he needs it. There's no solution otherwise unless he hits the lotto.
The fact that these loans can't be discharged in bankruptcy is the real issue. This is where lenders aren't living with the reality of imprudent loans. Anecdotal, but I did have someone confess (or was it boasting) to me at a party that he could get a student loan but he wasn't in school at all. Deferred for years. He's probably not laughing now, but holy shit, why would lenders not ask for current enrollment, GPA, etc to prove they were an actual student who was succeeding?? Those lenders need to face the pain of failure too.
For other students stuck in the debt trap, if they could balance xfer from credit cards to the loan, then try and go 2 years of minimum payments, they could then legit go thru bankruptcy and get that discharged. Yeah, I know that won't work for every case, but potentially can get one out from under that rock.
It's a scam, because by the early 1980s, the colleges all knew the loan money was out there, so they simply raised the price of the product to match the financing that was available. The same "choice" was not put the 60s generation. The 70s kids got 7% loans when inflation was 12%, 0% during college. (So loan value inflated 1/3 away while sitting in class for four years.)
This happened in the 1960’s with the Johnson administration that got legislation passed in which the federal government began guaranteeing student loans provided by banks and non-profit lenders. So, instead of states using taxes to fund their public universities before the 1960’s, federal tax dollars were used to guarantee student loans for public or private universities. This is the genesis of the massive tuition spike
It is not just this though. In concert with local and state governments, there was conscious effort to redistribute education monies (especially in higher education) and reroute it into other areas of the budget.
This did two things.
First, it changed the culture inside the university. It set off a new more intense wave of pay to play, vita arms race quasi-privatizations within higher education for professors to justify their existence via grantsmanship. The critiques of capitalism (largely in universities in the 70's and 80's) got boxed in as new hires had a different attitude about scholarship, publishing and the business world. Scholars were steered towards a neoliberal version of their jobs and many drank it in/accepted/invited/imbibed it as rigor, justifying how smart they were and well accomplished they were. It was CV padding and corporate glad-handing. The professors who played the game got more grant money, solidifying tenure and personal prestige.
Second, it pushed the universities in the direction to increase tuition or lose market share. The political community all over the country in local and national ways were trying to sell "entrepreneurship", "cost-cutting", "pay for yourself/unit/department" initiatives that resembled pre-NAFTA corporate America. By starving the university of its stream of public resources, it pushed the university to corporate sphere --- where raising prices on fixed commodity seemed not only smart but a necessity.
Of course they disregarded that the marketplace did not differentiate between a Harvard Law Degree in 1970 (10K) versus 2020 (65K). Why does one generation get a better deal in cost, plus the GI Bill and another does not? That's capital working. Win Win for them every time. Win Lose for their partners.
I agree it’s hard to muster up as much sympathy for Chris. He went to law school, but got disinterested after he had gotten the education and incurred the debt. I didn’t have the luxury of getting disinterested in my work when I had bills to pay.
However, I’m aware that the student loan program has been much abused by colleges. My sister was teaching at a for-profit school that was recruiting homeless people to take online classes using a cellphone. They were signing them up for loans. Those loans will never be repaid and the college raked in lots of money by saddling a bunch of clueless and desperate homeless people with unplayable loans.
The system stinks, regardless of whether you have much sympathy for Chris. It needs some market regulation where the colleges and the lenders have some skin in the game. Right now, the borrower and the government are the suckers.
He’s pushing 60, having spent the last 18 years in service-industry jobs, with garnished wages. He is in an economically hopeless situation, and his youth is gone. He’s paid the banks about $200000.
I am sympathetic, but he made the decision to quit being an attorney because he became disinterested. That decision was the pivot point that changed the trajectory of his student loan situation. Tax payers cannot start being held responsible for paying off large sums of money because someone became disinterested in their job.
We can't allow our economy to be that rigid. People need to be able to switch careers- maybe he should have a penalty but not that much. The economy is hurt from him not spending the extra 25% of his income.
One can be sympathetic AND practical. It is a profound mistake for society to encourage scofflaws to welch on their obligations simply because the whimsical life of the grasshopper appeals to them more than the earnest and responsible life of the ant.
Of course this also doesn't address all of those kids who opted for military service to pay for their school. Do we just send them a check for the debt they could have incurred if they wouldn't have opted to put their life on the line to avoid crushing debt?
I'd hate to have this logic applied to people who receive the low-cost (subsidized) Medicare coverage, getting denials once its found out that they smoked or ate a bunch of processed food, and that's why they're sick. "C'mon! You should have been MORE RESPONSIBELLLLLLLLL!" At some point, to be responsible means you take the entire circumstances that create a situation, when you judge the situation. It sounds like you are just considering the debt as if it were for a consumption item, not that it became part-and-parcel of the tuition cost by the early 1980s. If people wanted to go to college, the college produced the loan note. I don't think it would go over, that if you smoke or let your HbA1C go over 7, then you don't get any Medicare.
Wait a second...the Federal student loan rate for 2020-2021 is 2.75%. Think about that. 2.75% for an unsecured loan to a person without a job who doesn’t have to even pay interest until he graduates. Thats about the same rate for a 30 year fully secured mortgage on a house with 20% equity as collateral to income qualified borrowers who have to make their first payment in 30 days.
You want to talk subsidy? Go into a bank, tell them you are unemployed, won’t start working for 4 years and have no assets and want to borrow $100,000. After they stop laughing at you, they may give you a loan at 12% or more. And Tim will have a maturity rate far shorter than a student loan.
You’re not happy enough with this HUGE subsidy. Who said it’s as a consumption item? It’s a capital investment and like a house, you have to pay the bill.
But the subsidy is some flimflam job? Someone tricked you into it? They give you a below interest rate on advantageous terms and you complain that’s not enough?
More, more, more. Someone else has got to pay. Did you ever think that the attitude that makes a person view an advantageous lending deal that is already subsidized as not enough maybe the same attitude that made him fail as well?
You have ZERO knowledge of the student loan system clearly. The federal government has been book PROFITS of $50 Billion per year on this lending system since 2012. They have even been profiting on DEFAULTED loans since 2004, and probably even before. The only SUBSIDY happening here (ie people sucking money out of the government) is the servicers, collection companies, and obviously the COLLEGES...and even after they suck their ten pounds of flesh from the taxpayer, Uncle sam is STILL making money...and a LOT OF IT. You like to wag your finger at the borrowers sucked into this big-government, college lending SCAM, but all you accomplish by doing this is defending and perpetuating this lending scam, to their great benefit. Did you know that some of the government profits of this lending system are used to fund Obamacare? No of course you didn't. LOL. If and when this country actually does go socialist/communist (something I suspect you claim to fear), we'll have chest-beating, finger-wagging, up-by-your-bootstrappers LIKE YOU TO THANK!. Good job, comrade. I'll be sure to put you up for the USEFUL IDIOT MEDAL. Nice Job. Take a bow. Douche.
You know very well that under FCRA accounting rules, the government's "profits" on these loans do not reflect a risk-adjusted value. If government accounting rules required the same CECL charges that a bank would take, the annual losses have been - and would continue to be - substantial. FCRA also does not include any of the $30B+ administrative charges from running the origination program. I believe you know both of those things but prefer to mislead rather than inform. You are an advocate and a charlatan, not a truth teller.
I totally agree with this, except I think there needs to be a nominal payment because the Screamers and Crybabies (notice how the Koch Brothers trolls in cubicles hit these sites?) will make a bunch of noise if it's a total writeoff. I think what is fair is a surtax that brings today's federal marginal rates to about what they were in the 1970s, when college was essentially free. Fair is fair. A couple percent over $30,000 exempt, 15/20 years, five more for graduate. Cancel everything undergrad before 2001, graduate before 1996.
You missed the larger problem that the loan itself inflates the price of the tuition. Doesn't matter whether the interest is 2% or 20%. The loan itself is the problem. It's not a capital investment, it's a public service. There is no "asset" on the personal balance sheet. And in the 1970s, when the rate was 7%, US Treasury rates were north of 10%. So there should be 0% interest today to be fair.
To be “fair”? The rate now is 2.75%, or about 15% less than it would be if it were priced like any other unsecured personal loan. And it’s even probably a wider gap than that if yours could figure out how to price a personal loan that defers payment and interest accrual for four years and which, in the midst of a pandemic, the lender will not just defer payment on, but defer accrual of interest on.
The problem isn't that the subsidy isn't large enough. The problem is that there is no intelligent underwriting of the loan. Borrowers benefit when creditors with skin in the game reject loans that are unlikely to be repaid. Teenage borrowers would almost certainly benefit more than most borrowers from the intrusion of lender restraint.
While this is true, shyster politicians and shrewd bankers will denounce any restraint on lending. Their cries will resonate with the unlimited free diplomas for all dupes that equate a diploma to a golden ticket through life. Sigh.
Similar to how there is no underwriting requirement for Medicare. Anyone 65 who has 40 quarters gets it. Puff away and eat fast food and gallon size colas. No responsibility for their actions!!!!!!!! SMH.
I'm not a fan of this analogy. A lending transaction is a commercial transaction. A good loan is one that works out for both borrower and creditor. A bad loan is one that both borrower and creditor wishes had never been made. Students are not the winners when the government shovels money to them to pursue worthless degrees. That bears no resemblance to health insurance. Medical care was always going to be needed and provided. And I'm skeptical that unhealthy people that die sooner ultimately consume less health care than healthier people that die much later.
Hardly. It is moral equivalent. The CON side people are saying that student borrowers must be held to this ridiculous standard of personal behavior that is applied nowhere else --- and especially not to people who cost Medicare a fortune because of lifestyle choices. It is the same supposed waste of an almighty tax dollar. But fat diabetics who smoke (and wear red hats!) are their own category of precious, and Reagan put the kick me sign on the student borrowers long ago. So we continue to have this discussion (while Medicare runs up a tab more easily address than the student borrowing program . . . )
Of course you're mistaken. Student loan borrowers are held to the same standard as any other party to any other contract. You enter into a contract and agree to repay money you borrow according to the terms of the contract. You get the money, you spend the money. You can't then say, "HEY...I don't think I should have to repay this money!!!"
Grow up and start honoring the contracts you make.
No one is welching on their Medicare contract. The deal was made, people pay into it all their lives. When they're of age to start using it, PER THE TERMS OF THE CONTRACT, they start using it. No one is trying to get out of paying for the medical care of those receiving medicare.
If you want to lobby to prevent smokers or others with lifestyle choices you don't like or think are expensive, that's fine. But do it BEFORE they enter into the contract, not when the bill comes due!
No, student borrowers are held to a much higher standard than a business borrower, a consumer borrower, or even someone who goes casino gambling with tax money they should have paid the IRS. (Wait more than three years, declare bankruptcy, and tax debt gone.) They are all saying, "HEY...I don't think I should have to repay this money!!!"
These are the people who aren't "grown up" and not honoring the contracts they make. But you have no problem with those.
I happen to believe that Medicare should be available to ALL. And vices should be properly taxed. But you people seem to have a problem of trying to segment one group of taxpayers and tax money, and saying, sorry, you can't benefit from your money. As someone who hailed from Somerset County, New Jersey, (one of the highest wage AGIs in America) whose family spent decades subsidizing the Somerset County, Pennsylvanias and Somerset County, Kentuckys, I find what you're saying particularly offensive. I should be able to have my tax money go for the things I want it spent on.
There is right and wrong in what you say. Yes, the non student borrowers you mention get to wriggle out of their debts in bankruptcy, while student borrowers don’t. Then again, the non student borrowers and to have their loans under written whereas student borrowers don’t. All they have to Donis sign up for classes to get loans they aren’t otherwise qualified for at heavily subsidized rates which are deferred for 4 years without interest accrual and get further deferred without accrual during a pandemic.
But you are correct about uneven treatment of taxpayers. That’s what happens when you use the tax system for anything other than it was theoretically intended for in the first place - raising money -and not for social policy.
Surtaxes and subsidies for favored or dis favored activities create all of these anomalies you write of and are a product of the central government painting outside of its lines.
The central government has no business being involved in one size fits all, command and control social welfare policies. The states are well equipped to care for their own people, and being closer to them, can tailor policies to fit the needs and attitudes of their citizens.
Just like one state can have capital punishment where another does not, they can have or not have a rich social service framework.
There is a difference between a social contract and a legal contract. Moreover, the student loan agreement is optional, whereas Medicaremis mandatory - you can’t opt out.
Medicare is a deal sorely in need of revising and revising NOW, not just prospectively.
Did you know that the first year that Medicare insurances assessments were made against payroll, the maximum ANNUAL tax was $27.10?
And most people drawing benefits now, paid in only on the social security wage limit for most of their working lives, while people now pay in based upon their entire earned income?
Look at this...a 25 year old professional athlete making $5 million a year - whose union contract already provides for lifetime health insurance - has $150,000 paid in on his behalf? That’s the “premium” on health insurance that he’s not eligible to use for 40 years.
Medicare and Medicaid have broken the healthcare system. I had joint surgery not long ago. I went out of network, so my insurer paid me the Medicare reimbursement rate for the code the work was done. The reimbursement was $1,800 against a surgeon’s bill of $10,000.
The only person willing to do that kind of work for $1,800 works in the meat department of your local supermarket. The guy who pays full list - and the in network insurance companies who pay more then a hidden tax on each procedure to cover the cost shifting.
The Medicare system needs substantial revision. They took the income cap off the paying in side after i entered the system. They can adjust the benefit side too.
You have a bunch of people in low income states (red states) who are paying wayy less into Medicare than they get out of it, and price gouging medical professionals who are charging wayy more than what the same procedures or advice, guidance, prescriptions, cost in other countries. My point is that people seem to get all bent out of shape about student loan tax dollars, and yet there is much more waste and moral hazard, and forced subsidies, in the Medicare system. This isn't whether it's "paid as agreed", it's where the system is set up to provide these overly generous subsidies to places and people who can't afford it, and then we are all supposed to get upset about things involving student loan reform. Don't even get me started about military waste.
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.
It's not luck that you can pay while "Chris" can't. You have to have the right incentives in place. We have s bullshit American dream of college where it's supposedly sensible to go 50k into debt to get a degree in philosophy from "selective private institutions", "the Harvard of your local subregion". Study engineering and you'll have a job, period. Hell, study plumbing at your local vocational and you'll be making WAY more than this Chris dude
The trades can really pay if a person is smart, honest and shows up on time and works.
Trade programs in high schools were cut throughout in the late 80s and haven't really recovered. Some areas have pretty awesome tech schools, but mostly, the public high schools really pushed everyone to get a 4yr degree. Those markets are flooded or have been outsourced and there is a huge need for skilled trade work. (That is, so long as the building and home market keeps out of the shitter,)
Have you tried to get into a trade lately? Most all require a two year "certificate" or associate's degree just to get into the apprentice program. And where do you get those? Your local community college. Don't forget to ask for your loan because night classes pretty much don't happen anymore, so you have to quit your day job to attend.
I'm in the trades. 40 years worth. The AD's and apprentice programs are just another form of uselessness. We, and everyone I know, train our labor, pay them well, and we do all right. If you want to get into the trades, choose one, and find someone to hire you. You'll learn soon enough.
I went from apprentice boy to master plumber so I don’t agree that apprenticeships aren’t worthwhile. I never put too much stock in community college trade “degrees” though.
About 15 years ago, the New York Times had a long expose on worthless culinary schools. I think there were a couple of exposes like this on certain trade schools AHA I found one of them: https://www.nytimes.com/2010/03/14/business/14schools.html
I remember those articles. They were pretty good. Of course there are worthless trade schools, and the point is...(?). A traditional liberal arts education is an incredibly valuable experience, but you certainly don’t need to go to an elite university, or any university, to get it. Similarly, you don’t have to go to a trade school to learn a trade. It’s all out there; all you have to do is pursue it.
Well, no one is claiming “trade schools” are a monolithic entity and are uniformly wonderful. Some of the Kaplan “trade” schools are criminally idiotic. I’m aware of others with similarly worthless offerings. The entire idea of a trade school is a little silly, as a trade is something that is learned by doing, and it’s best learned on actual sites. With the current critical labor shortage, you can talk your way into a job. If the employer turns out to be a dick, find another. If you’re working with a plan, you can go out on your own in a few years. Trade work is so completely opaque to most Americans, they don’t even know how to think about it, let alone do it.
It started before that. Industrial Arts programs were getting axed in the 70's. In the 60's, the unions closed their own schools because they wouldn't integrate; the Feds said they had to, they said no, and shut down. It's been a 70 year gutting of trade related education.
It took me years to make as a lawyer what I made as a Master Plumber. But the trades wreck havoc on your body. I made the choice to go to school and got the benefit of working indoors even when I was earning less cash.
I’ve counseled some kids to go into the trades and some into “professions.” They each have advantages and disadvantages.
I just get a bit annoyed when the middle class wants to force the working class (and many, but not all trades are middle class) to pay off their loans.
My Dad was an aeronautical engineer, masters degree etc. On a business trip he sat next to a plumber on the plane. Got to talking wages. Telling me this story, he laughed to find out the plumber made more than he did, even after a 30 yr career. A career that included being one of the head guys in the development of the cruise missile.
It’s true. I’m telling you, it’s a wide open opportunity out here for anyone that enjoys working with tools. You can’t work remotely on a computer; you have to live in a city where there’s people with money. If you can handle that part, there’s endless work. Endless, at good pay, and control over one’s life. What’s control over your own life worth? I propose it’s worth a lot.
By the way Kurt, I called my soon to be 17 year old boy over to have him read your posts. He's a good kid and listens to me. I'm bringing him up to be one of those young guys who shows up ready to learn. Thanks
Well, they sorta wreak havoc on your body. Air nailers have hugely improved our lives. Safety glasses, knee pads, new engineered tooling...it's a whole different game than it was 40 years ago. If you're paying attention and not being stupid, they don't wreak havoc on your body, but you have to have a brain and use it.
For every electrician I know with a bum shoulder from working over his head all day, I know a lawyer with a bum shoulder from serving tennis balls. Aging sucks. It doesn't suck more or less because the wear and tear happened doing something you got paid for rather than something you liked.
As a general proposition, while working in the trades exposes you to injuries both traumatic and repetitive, working in law exposes you to fewer workplace hazards than the law. The law is usually a high stress environment—hence the unusually high substance abuse problems.
I was in far better shape when I was a plumber than when I was a lawyer.
As for sports, I had time to golf when I worked it the trades, it the law, not so much.
You’re doing a splendid job of having no vision, and displaying how little you know of the subject I’m addressing. We’re doing a job now retrofitting a crawl space with vapor barriers and foam insulation. When it’s done, it will be a bone dry energy efficient storage space. The client is thrilled; what was once wet and cold is now warm and dry. The work is hard. So what? Stuck fittings will NOT always be stuck. Our job is to unstick/fix/replace them. There’s good money in fixing stuck fittings. Of course, trade work is now (as your comment implies) a cultural and caste issue, and if that bothers you, then I advise you hire us so you won’t have to disfigure your manicure.
F.U. Try breathing asbestos. (It’s still out there and it still caused mesothelioma—that’s not dose-related like asbestosis. And breathe in the solvents. Avoid when your buddy fails to do his job and the forklift runs over you. Or a belt snaps. Or some asshole overrides built-in safeties on the punch press.
Your propane torch malfunctions and burns you. Etc. Etc Etc. All the modern conveniences don’t prevent the mistakes that take a day in and day out toll on the human body. So maybe the contractor you work for is just swell & yes, I left the trades some time back, but then I saw the injuries through the litigator’s lens.
I don't work for a contractor. I am the contractor. We wear respirators, safety glasses, knee pads, fall protection, when we see asbestos pre-proposal we write in and have it abated, we don't have a forklift, never had a belt snap, don't have a punch press, never been burned by our propane torches (we have several), etc., etc., etc. You sound like the guy we don't hire because you can't figure out how to not hurt yourself or people around you. Don't project your inadequacies onto situations you don't understand.
I love this thread. Buddy of mine in his early 40s used to work in finance in NYC. Hated everything about it, especially the assholes he worked with. Finally quit, got a job as a golf caddy, and got his welding certificate. He's never been happier. Looking forward to making $180K after apprenticing and additional certification. Agree with everyone saying the idea we all have to get a 4-yr liberal arts or STEM degree is almost criminal. Another story. I used to work at a shit-hot internet/web agency. One of the summer interns got himself hired as a project manager. Took a leave of absence from school. I was like, dude, save yourself a ton of trouble and do NOT go back to school, you've already made it. I left the company so don't know if he went back. I hope not!
Plumbing isn't really where you want to be; it's a rough gig and it's changed radically, and you're working with some of the most toxic adhesives and materials known to humankind. Service work is in huge demand, i.e., individuals that can walk into a situation and fix it. Simple home repair businesses are kicking ass. I know home repairmen making $125k a year, and they take a couple months off a year.
I worked with lead pots and asbestos oakum through the early 80s. Then the solvents came in. Of course we had jobs in steel mills, paper mills, foam plants, electro-plating plants and some good ol’fashion chemical plants and oil refineries. So even if the shit you were using didn’t give you cancer, where you were working might.
Don’t get me wrong though, it was good pay for an honest day’s work and I was never happier. Law School was fun, but being a lawyer got boring.
The current level of student debt in the US is slightly more than $1.7 trillion. Our government used your taxes, according to your viewpoint, to pay almost double that amount this year to bail out banks and corporations that were too busy playing the stock-market casino to have enough on hand to cover their short-term loans. So, I say we just tell them to cancel all that student debt and we'll call it even.
Of course, not a dollar of "taxpayer money" went for those bailouts, but that's a discussion for another time, because it's too late in the day to deal with the myth the US government runs on tax revenues.
And you're apparently unaware that the Fed was bailing out the banks and corporate lenders for six months prior to the CARES Act, and also that the bulk of the bailout money in said act wasn't applied as it was supposed to be, or that the small businesses who were supposed to be helped by PPP were shoved aside by subsidiaries of major corporations.
You're paying for small businesses PPP loans. You're also paying for pandemic stimulus of $1.6 Million each for millionaires and billionaires. You should probably stop paying your taxes now if that's how you feel.
Exactly my point. Every nickel of stimulus in the CARES Act added to the national debt. ALL federally owned student loans (85% of all student debt) could be cancelled without needing one dime of tax or Treasury appropriation, would add ZERO to the national debt!
Uh, no. The government is running a deficit, and you propose writing off a huge asset and the income stream it represents. This will increase the deficit, and therefore the national debt. Analogous to a business running in the red and writing off accounts receivable, putting it more in the red (in debt).
Nonsense. The national debt is the amount of money that the Treasury owes. The Treasury paid for student loans many years ago, and it paid only a small fraction of the outstanding balance. It owes NOTHING on the portfolio the government owes, and carries zero liability for future defaults. The loans could be cancelled tomorrow with zero spending required, and nothing added to the national debt. The student loan portfolio is air. At this point it would be astonishing to see the government get even $.20 on the dollar for it, and that would be through harrassing, and wrecking 44 million borrowers for the rest of their lives. The lending system is finished, and it needs to be taken to the bath, and drown in the tub. It is vanishing into a mist of illegitimacy as we speak, and won't survive the pandemic. The sooner it is erased, the quicker this nation can get back on its feet.
It sounds like he paid his own student loans, actually.
He borrowed $79K (as a dumb kid—these disastrous choices are often made by teenagers with the encouragement of every “responsible adult” they talk to), and has paid $200K to the crooks and usurers who lent him his textbook money.
If paying for others’ education sickens you, how do you feel about all of the money you’re paying for all of those useless airplanes and nukes? Education is the line you won’t cross?
$79k ($213k in today's dollars) for "textbooks"? Yes, just "milk money" for The Beaver, Ward. Everybody's a victim. The big lie that schools have used for their benefit, in one version or another is "you can't ever get enough education" or "you can't spend too much on education"? The line I won't cross is accountability. I would be very surprised if many adults (responsible or otherwise) without a vested interest (ex. college salespeople) were advising Chris to pursue a philosophy degree, with or without borrowing. Compensation for various majors is, and always has been, widely published. Chris had no evidence that a philosophy degree from Miss State offered a high likelihood of return, other than, at best "A guy I know, knows a guy who has three KFC's and he said...". But Miss State let him in (and schools will pop up like mushrooms for people of any/no ability, ad infinitum, as long as there is money, willing dupes)and it was just easier to not think about all that "payback stuff".
Agreed, and you are right, lol. I went to school w/in couple of years of Chris, and the data was clear even then, that for a law degree to pay for itself, you needed to be in the top of your class at a good school. Simple example, #1 at a low ranked school, top 10% at a better school, or just graduate from Harvard. Any responsible, informed adult with Chris' interest at heart would have shared same (I'm confident Chris was Top 10% of his class, BTW) Ask yourself, would you pay $200k+ (today's dollars) and forgo 8 years of earnings for a law degree from Syracuse? Of course not. Unless maybe you are independently wealthy and don't have to borrow, and are choosing to hide from the reality of serving others (work), then you can create this intellectual superiority fantasy for yourself. The lottery ticket that dropped on the USA post WW2 created a massive tailwind (that obviously, could not last) and with it, created oxygen for some feeble minds to continue to believe the bedtime story "you can't spend too much money on anything that calls itself 'education' ".
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.
" I'm guessing that many, many liberal arts degrees wouldn't be considered a very good risk."
That just feeds into the rot that has seeped into higher "education." They've become career mills, not intended to feed creative and exceptional minds that salt a culture. Merely to spit out more corporate cogs.
Education should be free and those who have an affinity for the humanities should be allowed to advance as high as their capabilities can take them.
How one answers the question What is education for? reveals a great deal about a person.
I'm not one to "proof-text" with quotes of the Founders, who were fallible men, but this is true:
>>Two of our greatest Founding Fathers, John Adams and Thomas Jefferson, were fierce political adversaries. But in the first years of our nation, these rivals — with vastly different backgrounds and disparate political views — shared common ground. They both believed in the importance of funding public education.
Rather than squabbling, Adams and Jefferson knew that public education was at the heart of democracy. “The whole people must take upon themselves the education of the whole people and be willing to bear the expenses of it,” wrote Adams. “There should not be a district of one mile square, without a school in it, not founded by a charitable individual, but maintained at the public expense of the people themselves.”
Jefferson, witness to the Revolution, drafter of the Declaration of Independence, and founder of the nation’s first public university, rightfully believed that it was the government and citizenry’s duty to invest tax dollars in public education: “[T]he tax which will be paid for this purpose [education] is not more than the thousandth part of what will be paid to kings, priests and nobles who will rise up among us if we leave the people in ignorance.”>>
Yes, but they were talking about real education where you learn to think critically. The indoctrination camps we have today where kids are conditioned to do as they are told, follow the advice of experts without question, and not think for themselves are not what Adams and Jefferson would have wanted.
The "indoctrination camp" narrative is completely overblown, except when it comes to the economics departments that only offer neoliberal ideas in their courses. The radical cultural ideas are coming from the students themselves and a very small minority of faculty. I went to an Ivy League (wish I hadn't now, could've gone full ride to a great state school), and the pushes to change curriculum, etc., come from below; many of the humanities profs fear for their jobs due to student complaints and react accordingly, but many have also held their ground. Privately in office hours, they would mention this to me, and I got flamed during a public presentation of my senior project for defending the teaching of Milton. Note: my classmates, not my teacher, were attacking me.
Many of the Founders were also completely screwed under predatory debt to British banks, merchants, etc. Jefferson nearly went to debtor's prison. Robert Morris (who financed the revolution) DID spend time in debtor's prison. John Adams famously said "There are two ways to conquer and enslave a country. One is by the sword, the other is by DEBT". These men knew about predatory lending, and wanted to avoid it. That is why they called for "uniform bankruptcy laws" ahead of the power to raise an army and declare war. The unique violation of this for student loans proves their wisdom. In Spades.
Fair point and well argued. I could get into semantics about paying for people to act like children into their mid 20's, AKA college, but Ill concede the issue and say well done.
Besides, we were arguing about college, not educating young children, although there doesnt seem to be much difference between young children and college grads these days.
"Until then, quit calling it free while asking other people to pay for it."
We all pay for K-12, for roads, for public health departments and a common defense. The Founders of this country believed that education was a public responsibility and that an educated population is necessary for healthy democracy -- they were right.
It works as well as most public services. There is a saying in my family when we have bad meals but need to eat them: "It'll make a turd." That is pretty much the rationale behind public goods. It fills this void in these people's hearts. They feel as if they are doing good because they support the idea of providing the service, not because the service or good provides value.
Schools is more about cultural and social indoctrination more than anything else. The amount of education dispensed is just enough to fill your post in life and nothing more. The amount of propaganda dispensed is massive.
It is though. The state provides "free" education already, its your contention that its just not enough "free" education. So the founders dont have to be wrong for you to also be wrong.
With you "somebody pays for it!" types, do we ever get to use our tax money to support free (without direct charge) public education? Could you tell me when we finally get to use our tax money for the things we want, and not for those that you want?
Sure, its already happening. I mean, the public schools are a joke, but they are "free". This article pertains to college.
With you "service should be free!" types, is there any end to the number of things you dont want to be free? Education, healthcare, food, housing, cell phone service, internet service. Rights acquisition in the new religion.
Are you not spending enough tax payer money on poorly implemented public goods already? Is taking 50% of every last dollar someone earns not enough? Should 1% of the population pay for the subsistence of the remaining 99% because "they can"?
I dunno. The early Republican Party of Lincoln's day believed that college should be "free", and so they passed the Land Grant Act. They did it without the hysterics of going, "and then if we do THIS, then they'll want THAT and THAT and THAT!!!" The Republican Party of Eisenhower had a top marginal tax rate of 90%. Most people in those days could look at $500 billion dollars and wonder how anyone's human effort actually "earned" $500 billion dollars. They knew, from the robber baron days, that these vast sums were extorted out of the general workforce through unfair bargaining positions. Somehow, people have gone astray from the good ol' values, though.
"They knew" Please. Marginal rates are irrelevant if no one pays them. When the income tax was first created in 1913, 1% of the population paid it. No one paid the 90% rate. But your ilk has continued the slow march toward collectivist tyranny. "MORE!" Is your chant. You're the greediest bunch in the union.
"advancement as far as their capabilities allow" and someone else will pay for it from the unlimited resources that spring forth from the ground. In that magical world, universities will generate endless number of "levels of advancement" (think Scientology) as long as there is someone to purchase the newly minted merit badges.
You think other people should foot the bill for your education because you "salt the culture"? Ugh, liberal arts types are always so full of themselves.
If you just want a hobby, develop it on your own dime.
Colleges / Universities are bloated with admin and giving them a blank check absolutely guarantees they would always ask and get top dollar because "oh won't someone please think of the children!" fallacy. It's advocating that they would be permanently dependent on the gov't handouts and bailouts and so forth. Which would absolutely blow up open any hope of a balanced budget.
Furthermore, college is a waste of time. Liberal arts should not require a 4 year commitment. What's stopping someone from reading books about history, music, philosophy, arts on their own time without dedicating their time in a classroom setting?
Even business degrees are worthless...why do I need to allocate 4 years, 2 of which are prerequisites on crap I don't care about, why can't I go straight into learning finance and Excel. Spend a couple of years and move on with my life. No, instead I have to spend $3,000 on a literature class and be forced to read "Catcher in the Rye" for the 10,000th time.
College is outdated, takes up too much time, doesn't teach squat (unless it's STEM) and is prohibitively expensive. As an ROI...oh boy...I'm better off blowing all my money on a gold-digger party girl.
You are getting at the real "system", which is federal involvement has allowed colleges to spend with abandon and what they have built is unsustainable. If lenders were at risk, they would lend for degrees that pay, thereby steering students into those degrees. The endowment answer would only work with a very small number of schools, as most have small endowments relative to their operating costs. Is it really any surprise that 18 year olds will pursue philosophy degrees (like Chris) if someone gives them the money to pay for it?
All college could be financed by income share agreements, like all the software academies are doing now. Then they REALLY make sure only the right people get in!
Brilliant!! Some things are just so simple. You should work in gov't.
The majority of college DO NOT have endowments that could underwrite tuition...guessing you are a IVY League-er that doesn't have a clue. Under your two step solution, nobody goes to college and the feds get to underwrite more food stamps.
Absolutely! Every time I make these two points I make both liberals and conservatives both mad. And you see how, point 1 would anger conservatives who would go onto the moral hazard argument, point 2 would anger liberals because they would argue that college should be free!
Government needs to be out of the system. I can't believe anyone was smart enough to actually have planned this out, but student loans have become the financial driver behind the indoctrination process on campuses. It's funded all of the non academic staffing that create/support the new social norms that the students are taught. The Dems will never allow the feds to sever ties with the process as it's their greatest source of recruitment to progressive policies, identity politics and political correctness. It's where cancel culture and ANTIFA started, and which party promotes and/or benefits from both?
Joe Biden, as senator, represented Delaware, a state that has what would have been called, 100 years ago, a usury industry. What Delaware does for business is criminal in certain countries.
Why thank him ? Sleepy Joe has never been smart enough to come up with an idea like that, he just rubber stamped yet another scheme by the rentier capitalist class to keep his job, why blame him exclusively ? How about the rest of the crew ? Funny how capitalists think up scams, lobby(bribe) the government, and always escape blame for their exploitation.
Shouldn't we be thanking the FIRE lobby as well ? The share holders who could care less as long as they get a big fat rent check ?
When you have a shit system that incentivizes exploitation of the masses for the benefit of the few, you get power trippers like sleepy Joe or the current puppet in the oval office who will wheel and deal all day long to secure that immoral and short sighted predatory behavior.
Politicians know better than anyone on earth that whoever pays the piper calls the tune.
Just like foreign policy this section of our economic policy is will not change because there's too much profit in keeping the majority fenced off and to poor to do anything about it.
They get paid to dial for dollars and keep the auction going. They get perks for covering up the crime and perpetuating the facade.
Most of the powerful ones have "handles" the elite can use to keep them in line like a shock collar on a dog.
Dennis Hastert, Slick Willy Clinton, Newt Gingrich, Strom Thurmond, Larry Craig, Trump, Biden, etc, etc..... That's just a tiny sample of sex scandals and we haven't even gotten into fraud or drugs and weapons trafficking yet.
The prison industrial complex we now have merely separates the successful criminals from the unsuccessful ones.
Maybe take a civics course? They are free on the internet. There are copies of the Constitution on the internet as well. Calling oneself President- Elect and even making up a fake “Office of President-Elect” doesn’t make one President-Elect.
I will do you one better: go back to 1960 newspaper archives and see how many times John F Kennedy was called "President-elect Kennedy" in November 1960. The term has been used to refer to the person who has won the first Tuesday after the first Monday election. Even by people who thought drinking Clorox stops viruses.
It doesn’t matter what “people” or the media say. The President-Elect isn’t chosen until the Electoral College votes. We obviously have a contested election just like the same “people” you cite told us we would have. Until it is resolved there is no President-Elect no matter how much people wish there was one. This isn’t rocket science. It is clearly spelled out in our Constitution.
“Article II and the Twelfth Amendment seem to focus on the formal counting of votes in the Congress as the magic, formal moment of vesting in which the winning candidate is elected as ‘President,’” Amar argued. “Although the legislative history of the Twentieth Amendment suggests that the electoral college winner is ‘President elect’ the moment the eIectoral college votes are cast, and before they are counted in Congress, the text of the Amendment fails to say this explicitly.” - Yale scholar Akhil Reed Amar
Only in the warped age of Trumpism have we had to question that the guy who won the election on Nov 3 is President-Elect. Wallow in the loss of your Dear Leader all you want, puppy, but it won’t change the facts. I’d hate to see how badly you manage your own life if this is any indication of your mental processes.
The past four years has a history whereby the elected president is subjected to delegitimization. This has been going on my whole adult life, and has gotten much worse by the decade.
Bill Clinton was subjected to a constant assault of special investigations and an impeachment over a blow job. The government was shutdown in order to get a result that they couldn’t by the normal processes.
Obama was stonewalled by the Republican Senate and denied a Supreme Court appointment that would have been confirmed under any previous president.
Trump has been subjected to much foot-dragging, but he has also violated a lot of norms while in office. Whether his own demeanor could have been better and achieved a better result is possible, but it may not have mattered. Lots of water under that bridge by the time he arrived.
Bingo. He is a symptom of what is wrong in the Democratic Party - not delivering about the money. Telling voters, "vote your economic interests!!!!" and then utterly failing to deliver. (Have a MyRA.)
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.
I paid off my loans in my thirties, but I’m completely sympathetic.
If I’d gone to my glamorous first choice for law school, I might be in a situation worse than yours. My parents pushed pretty hard for me to take out huge private loans—with their house as collateral!— because a top JD was supposedly bulletproof: a guarantee of decades of wealth.
I was like “eh...” and just went to the best school that offered me a scholarship—averting a life-changing catastrophe, in retrospect.
Good choice on law school. My parents paid my undergrad tuition (I waited tables for spending money) and then I was on my own.
I took out loans for law school, but rather than stay in the city I loved and borrow a large fortune, I moved cross country to attend a cheap school, worked multiple jobs during school to minimize my debt, and even with a modest clerkship salary I made double/triple payments to pay it off as quickly as possible. I like to think I did it the "right" way.
I'm also living the flip side. I was engaged to be married by the time I learned my spouse's "some student loans" was a six figure balance on which she pays zero under the income based repayment program. She managed to get two Ivy League degrees in useless disciplines and parlay it into nothing career-wise. It's a nightmare.
I paid off all of my student loans. I think it's absolutely fair to cancel the remaining debt for those who have already repaid principal+. Where you draw that line is sensitive, but when you end up repaying the principal amount over and then some, with the principal still outstanding, it's clear you've been entrapped by usury.
Further - I would continue to pay the interest IF they would stop accruing at 8.25% (which is 3% lower than before my one time consolidation). I would (begrudgingly) pay the original interest refinanced at the current rate. Mortgage, car loans, credit cards all consumer (and commercial debt) can be refinanced.
Who would continue to pay a loan (even on IBR plan) where the minimum payment is 10-15% of monthly “discretionary income” (basically everything after taxes) and the interest is 8.25%
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?
Veterinarian? There is a perennial shortage of those. It sounds like you missed out on the $75,000 grants that the federal government provides to help ease the shortage. In fact, without federal support, the entire profession would probably go in the tank.
Similar situation here. Lotta sacrifices made in the prime of my life to get out from under the debt. Peers in my group want my results handed to them.
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.
Bingo. Several generations of kids were told that college was the only gateway to success. Some of those kids got in while college was relatively cheap; some didn't. But most kids who could attend found a way to do it, even if they had to incur massive debt to do it.
And why not? Long-term costs are easily disguised. Most college-age teenagers are easily taken advantage of. And college really was important—still is important—to reaching certain positions in society. Depending on your upbringing, the idea of becoming an electrician might never have a chance of entering your mind.
Why would it, if your teachers all actively despise "the working class" or "blue collar Joes".
It's as much a cultural thing as it is a we'll take the cost of three cheeseburgers next week for the cheeseburger today Wimpy School of Economics method.
When we moved recently, we left a high school district that was too small to offer much, but they did point proudly to the fact they sent 75%+ on to college. That was their only metric for success. The largely liberal douchebags living there (W. Washington state- it's full of them) blindly applauded it, all the while paying enormous sums to the tradesmen.
One of the biggest misleading ads when I was college age was "college graduates make a million more dollars over the course of their career". What they left out was that by taking on debt, you are delaying investment for retirement, which eats through that "earnings advantage".
I got a 4 year degree in finance, but it was largely a waste. I quit finance 2 years in and started at the absolute bottom in a tech company. The knowledge I needed to work at that tech company was probably encompassed within 2 or 3 semesters. Thankfully I did not go into massive debt, but I could still see the waste of paying for 3 years of college that I didn't need, and also forgoing 3 years of earnings very early in my life.
Great point. I'm not saying that on average there is NO financial value in a college education, but that "million dollars more" nonsense is a cheap, cheap correlation. For example, you could take a large sample poll, and I guarantee that you will find that among respondents, those who took sailing lessons, or polo lessons probably earned $3 million more over their lifetimes than those who didn't. Did the one cause the other? Should we all rush to put our kids in sailing school? LOL
Finally, someone acknowledged the elephant in the phone-booth. (For those of you who don’t know what a phone-booth is, demand your money back from the school(s) you attended)
I am a couple of years older than “Chris”. I took out student loans and wasted most of my money partying as opposed to studying. After three years I dropped out and took a pretty low paying warehouse job, then I almost broke my back and paid off my loan, interest free, because it was 2 days before my six month anniversary from dropping out.
Chris fell for the higher ed scam as I did, but in a way, being irresponsible during my school days put me in a position that stopped the bleeding that Chris is still experiencing.
This is the real problem. That said it seems unjust that there's this big industry of making money off mistakes people made as teenagers. Student debt should finance positive roi investments not shackle people to bad decisions. If bankruptcy was allowed maybe lenders would be more selective. I don't know the history of why it's not
The way things went for me I wish I had learned carpentry and started an all girl construction company. I would have felt better about my work and contributing something to society
I know a couple women running an all woman home repair business. They're kicking serious ass and making good bank. Find a company and work for a while. If you're paying attention and enjoy the work, you'll make it just fine.
I agree with what you're saying aside from one thing - that it's the democrats alone doing this. I grew up in a largely conservative community and ALL of the parents were encouraging college as the next step...it was expected and encouraged. So that push came from all across the ideological spectrum.
I do completely agree that there are other valuable options than just college and they should be explored depending on life goals, career goals, common sense, etc.
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.
I can tell you, in hindsight I see that financial aid offices back in the 80s/early 90s took advantage of students. Back then Mommy and Daddy didn’t usher you around, touring colleges starting in 10th grade. No one was hiring consultants and extorting recommendations from alumnae to get a seat at the table. At the state school I went to it was mostly kids who really wanted to go to school (or went for the “free” grant money). These were not wealthy young people. And at 18 or 19 years old were def not financial geniuses. When you assume financial aid advisors are on your side and they are there to help you make that dream happen - all you have to do is sign. I remember like it was yesterday “You don’t need to think about money now just focus on your education.”
Financial aid advisors are college marketers, now. They are responsible for loaning up the students to keep the money flowing to their bosses. Those kids are not in any condition to be able to make an informed decision about the lifetime financial obligations they are incurring. It’s loan sharking.
" I’m sure much of this was disclosed to him when he signed the paperwork."
This is a huge assumption. My financial aid office assumed I knew it all. There was was no financial aid guidance counselor. There was no party in the process incentivized to explain things and look out in my best interest interest. Every actor had something to gain by having me sign the dotted line.
I'm not looking for sympathy, I've been successful enough to pay off my loans after graduating into a recession and having to work outside my field of interest to pay the bills. That said, it's the first experience many young adults have with debt and financial legalese. It's absurd to allow such predatory practice.
My experiences came in the mid 2000s (bachelor degree) and again in 2011(masters). Thankfully I was more knowledgeable about the this stuff the second time around. Don't think that there is anybody explaining this stuff, or looking out for naive 18 year olds. It's a rotten system, and it's all predicated on the idea that education is a good thing for individuals and society, not just economics.
I agree it’s a rotten system. It follows in the footsteps of all the other financial scams, from indentured servitude and sharecropping to street loan sharking.
I didn’t have to take out loans as a young student in the 1970’s. I went to a decently funded state college and lived at home. The campus was efficiently run and we didn’t complain about the lack of amenities.
My parents also schooled us about the cost of debt. We understood compound interest and how loans can be used to harm people. I signed up to run a paper route, and found out about one-sided contracts, and how hard it is to get out of one and not lose your shirt. Not a lot of friends out there.
Government can’t fix all,the predatory lending, but it can at least not actively enable it like it does in the student loan program.
The essential and obvious issue here is not that Chris wrecked himself before he checked himself.
It is the fact that politicians only care about the average lenders, and then only so far as to pay them lip service. Then, re-elected, they go right on introducing bills written by the crooked lenders' lawyers that specify application of sand before ramming it in.
Feint left, swing right. Over and over.
This type of product is harmful in so many ways and anyone who isn't directly benefitting from it is being porked.
No, “The essential and obvious issue here” is that government should cease backstopping student debt.
Fuck “the average lender” bullshit. All lending has this issue: autos, houses, vacations, etc. shut the funds off. Period. Let these debtors sink. Don’t ask the rest of us to pay off their stupidity.
They sure aren't collecting taxes enough to cover the 27.3 trillion dollar national debt... so really, in a monetary system based on imaginary lending/paying does anyone really pay?
Are you afraid of a line item on your tax records that says "Some dumbass's mistake"?
You might consider going to nursing homes and berating people who smoked cigarettes and are costing you all of that money for oxygen and breathing treatments. Or, do you not shill for big tobacco as well?
There's this thing called "scarcity." And this thing called "tradeoffs." See, we can't afford to give everyone everything they want, because we do not have unlimited resources. So would we rather give poor kids orthodontic treatments, better housing, food, a good education, and so on, or forgive student loans for people who can afford to repay them? Money does not fall from the sky. The national debt is not imaginary; it's a bunch of bonds that people paid money to buy and that need to be repaid, with interest. Taxes are not imaginary; you trade off paying taxes and not going to jail against the new car you could have bought if you didn't pay taxes.
You must be one of those SW Missouri grads. Federal tax dollars backstop this shit. Kinda like Fannie and Freddie fueled the mortgage disaster 15 years ago.
What is it about people like you who hate average people in trouble, and want to protect the wealthiest? I went to school in the 60s and 70s and the interest on my loans were much lower because cost was much lower than mentioned in the article and I got a "useless" degree. They were easy to pay off.
Your idea is you should only be permitted to get a degree if it is engineering? Not in any of the humanities?
They have jobs and do get paid. And not just idiot profs who can’t do real work. There are scores of administrators in diversity, etc programs who Hoover up those tuition dollars. Don’t be a simpleton b
This is true; it’s a lousy job, but I get his point. I live in prestige university community (Evanston, IL), and the profs are amazingly dense. I wouldn’t mind cratering them, regardless of their income level.
“ Do you consider business, engineering or law colleges at state universities to be "hard left"?”
Yes, but beside the point. Have you checked out the “diversity” and “anti-racist” agendas at those programs? And tuition funds far more than just your major. The administrative bullshit sucks up funds.
Cut out all govt backed lending. That will solve a lot of problems.
Wait until Mike Lee‘s newest bill passes, then our country will be invaded by more green-card, lower wage accepting workers. Wages continue to sink, and eventually some really bright politicians will demand a $20.00 an hour minimum wage; as they pass another salary increase for themselves and their fawning bureaucrat slaves.
The reason the economy was booming before Covid is $15 minimum wage. Period. Puts money in the pockets of people who will spend it gleefully. For the workers, it's still not a living wage in most cities, but worth getting out of bed for. The reason this obvious truth is totally untouchable is that the political/media class is beholden to / are corporations that would prefer to have workers who are paid nothing at all. See: interns, Bangladeshi 9-year-olds, "illegal immigrants" (ie, migrant workers), etc. Matt is the perfect person to investigate and write about this.
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.
However, there is one good thing that came from this article - I started thinking about the fine line between financial stability and distress, and decided to give my friend a gift vs. a loan and tripled her request. My wife thinks I made the right call, so there is that.
And I don’t feel like paying for public schools and state indoctrination mills. I don’t want to pay salaries for politicians who do nothing but fight to hold their seat year after decade. I don’t want to pay for “rich” people’s tax loopholes. Why should I - if you sent ur kids to public school or if they’re getting financial aid or if you got financial aid/grant you I say we call it even
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.
You might also gently remind the students (and, just as crucially, their parents) that there's no compelling reason for an academic education to work like a sluice, with high school graduation at age 17 leading directly into entering college at age 18 or 19, and graduation at age 22. If you decline to immediately march off to college three months later, no truant officer will knock on the door. No college admissions office will inform you that you've blown your shot.
The path of going directly from secondary school to college to grad school, graduating in the early to mid-20s, settling on a white collar career with a middle class salary, benefits, and the prospect of climbing the ladder is linked to the same set of traditional social norms that prescribed marriage by age 25, and children within two or three years after that. That's a valid path, but it's outdated. The reality of modern society and economics is much more flexible, and there can be marked advantages to adding a few extra years of latitude into that model. At minimum.
For example, consider the relatively conventional alternative of a recent high school graduate remaining as a resident in the parental household while entering into the world of work at entry-level wages (which are now approaching a reasonable level in most parts of the country) for three or four years- perhaps also obtaining a few college credits at the local community college. That has all sorts of inherent benefits. It allows the young person in question with an initiation into the realm of the steady job and the working week, as an employee for an hourly wage job- that's an education in itself. (Personal digression: having done f*d up a bit at both school and work between ages 18 and 21, one of the first decisions I made to correct my course was to set a goal of working for a minimum of one year at the same job without getting fired.) And along with a range of material support advantages for both the young person and the household (including dependent health insurance coverage) continuing to live at home provides them with the ability to stash most of their paycheck. Four or five years of saving most of a weekly paycheck, and all sorts of vistas open up for a 22-year-old. With $50-$80,000 at hand- money that one has earned from their own efforts, at that- the prospect of being able to afford all of the expense of two years of upper level university education without a loan burden is only one of them. $5000-$10000 of that money can buy most anyone a fantastic six months in Asia or Europe. After this covid thing is over, of course.
(Just don't squander it. I advise people to stay away from even one use of hard dope, but then I'm a square, and a semi-hypocrite. If you want money to party on, tack on an extra two years of work savings to this advice, and before you go off on your little spree, lock half of that money in an account that you can't touch without jumping a few onerous/expensive hoops. I realize that most people in their early 20s imagine that by age 30, it will be too late to enjoy the high life. Trust me, it isn't. I know people who set it aside until their kids were grown. And after that, woo-hoo.)
I would have reflexively bridled at this advice at age 17, when one year's time felt endless. (Wrong. One year ain't no time.) But as it happens, I eventually ended up returning home to live with my parents from age 22 to 25. And now we're evidently in a situation where a lot of adult children are graduating from college at age 22 and returning home to live with family until they're, like, 29. Or older. No judgement, but under most circumstances, that cannot be an easy situation for anyone to tolerate. It makes more sense to stay in the nest until age 22, mostly working and keeping a low profile, accumulating the material resources to go to college and the life skills to stick with it. And resident tuition at a good community college is usually the best bargain out there, for the first two years of college. Not only is that not a barrier to admission to a college or university, but it's often an advantage. You're a better bet to graduate than any 18-year-old freshman. As a path toward independent adulthood, that seems to be more like the natural Flow these days, to me.
That's how I'd counsel the kids and their parents, if I were teaching 12th graders. I'd also tell them to use the delay to drop by a local community college admissions department, and research every damn scholarship and free money under the sun. Year in and year out, some of that money goes unclaimed because eligible students don't know enough to apply for it. It pays to learn how to work the college game. Rushing along as if you're in a row of airborne recruits in line to get pushed out the jump door is the wrong way to do it.
Stories like Chris', which have been reported in the media for some decades when loan reform comes up, are truly compelling. And they tend to bring out the same set of screamers and crybabies who protest someone ELSE getting a toy. ("What?? MY TAX MONEY going to pay for x, y, z??") These people have no problem when literal trillions are wasted on baseless wars, and ignore the fact that most all people who pay student loans are also paying taxes. So Chris gets to pay for the military industrial complex for wars that he didn't agree to, but could not use his tax contribution to pay for his education, which is basically how the pre-Reagan era Baby Boom went to college and graduate school. Chris gets to pay interest on the national debt since then, which mostly was racked up on giveaway tax cuts to the extremely wealthy. They got the tax cut, Chris got the bill.
In fact, many of the high balance pre-seniors are also people who've paid a lifetime of income and payroll taxes. It isn't that the student loan borrowers "didn't pay". It's that, for their generation, the tax money wasn't allowed to be used for THEM, like it was for the previous generation.
("Hey, me here in my blue-collar job, I had to pay taxes too!" Well, guess what, you had less competition starting out because the Chrises of the world were sitting at a college desk, not bidding against your price for labor.)
As to a quarter-million student loan balance, though. It wasn't that Congress in the Reagan Administration took rates from 7% to 9%(!) on the way to 10% in the 1980s. It sounds like what made it a big number were automatic penalties imposed in the event of a default. These penalties bore no proportion to the actual cost to resolve the default. Usually, that was a phone call to the appropriate department and the borrower put in a percentage-of-income program, making payments for 12 months to cure the default. It doesn't cost $25,000 in penalties to make that happen.
The Department of Education has offered percentage-of-income repayment since 1994. Loans were to be cancelled starting in 2019 (25 years). I doubt there has even been one cancellation under this "ICR" scheme (income-contingent repayment). Maybe because the percent was too high, but more likely, because no one knew the option was there, because the servicers had NO incentive to let it be known. It was buried in the loan contract.
It's unlikely that President Biden is going to simply cancel all $1.6 trillion in federal student debt. It's also unlikely that this money is ever going to be "repaid" (meaning, it has already been paid in tax money that was diverted to the needless trillions in wars, the borrowing for the wealthy's tax cuts, etc.) DeVos, billionaire grifter like Trump, had Deloitte or one of the biggies do a study which showed that at current rates, $500 billion of the money will be cancelled at death. Per the loan contracts. That number is only going to go up.
The better approach to reform is to revisit Obama's "REPAYE" income-based plan, and put the contribution rate to more like 7% of income above an exemption rate like $30,000, with a full-stop cancellation at 15 or 20 years, and five more for graduate school. Any undergraduate balance from 2001 or before, and any graduate balance from 1996 (25 years ago) gets cancelled. No more goofy forbearance that wracks up the debt, or deferments with so many terms and conditions that they're useless. The hard-stop cancellation after a quarter century also makes it walk-the-walk. The Democrats have a hard time getting voters to believe their song and dance anymore about delivering for them.
Costs can be borne by restoring pre-Reagan tax rates on the very highest earners, including capital gains that they can't weasel out of by fudging basis like they used to (and how college for the richie riches got paid in the 1980s --- sell stock, lie about the gain).
Thanks very much. I am made more accurate. I just knew it's any one of those large ones that loves to take federal contracts to write a report about how we should be shocked (shocked!) that other people get federal money.
If McKinsey makes a mistake, though, they don't have to pay it back.
I agree that the less cumbersome solution is just to cancel the debt. And the colleges just lower their prices next year and take it out of those huge endowments. But that won't happen. Student debt is not creating "another Great Depression". But people having to pay any more than, say, 7% of discretionary income is a drag on the economy. (It's like a surtax that is just sucking up demand.) A couple percent of income towards these debts is fair, because tax rates in the 1960s and 1970s were maybe 5 to 7 percent more on the margin than today. So the people who got it free in those days, this is the tax they paid. And we make it equal by matching the overall tax rate (income plus student loan surcharge) to the Treasury.
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.
Never forgot this old Alex Cockburn line:
"The first duty of any senator from Delaware is to do the bidding of the banks and large corporations which use the tiny state as a drop box and legal sanctuary. Biden has never failed his masters in this primary task."
Miss that dude. He could write his ass off.
So true. This all goes back to Walter Wriston and Citibank during the late 70's interest rate and inflationary crisis caused by petrodollars. This led bankers to realize that if things did not change quickly, they would be out of business soon. So they decided to move their charters to Delaware and S Dakota (and export debt in those states). They were chosen because of the significantly higher state usury rate --- allowing banks to charge more interest on customers beyond the national rate set at 12%.
This set a showdown and in 1986 we had the Marquette decision (first Omaha vs Marquette National Bank) and this allowed large multinational banks to be domiciled in states that have preferential usury laws, export their interest rates from South Dakota or Delaware to any US state and escape prosecution. This saved banking at the time along with new fiscal policy aimed at taming inflation at all expense.
And the result was that all major players in the industry moved to Delaware or South Dakota for their charter --- and protected their profits from this one battle they won in the State of South Dakota. Biden just happened to be a bankers bagman.
The Marquette decision was 1978, and involved Nebraska, not South Dakota. The decision allowed the ability of a bank chartered in one state (Nebraska, in this case) to charge interest according to the rules of that state (18%) while issuing credit cards across state lines into other states (in this case, Minnesota, the plaintiff) where those interest rates had (before the decision) been able to prohibit the higher rates as usurious (the Minnesota state limit on legal interest was 12%.)
https://www.creditcards.com/credit-card-news/marquette-interest-rate-usury-laws-credit-cards-1282/
South Dakota features in the story because of its newfound post-Marquette decision popularity as a state holding the charter for credit card companies- S.D. had no interest rate cap at all! And neither did Delaware. Although both provisions have been modified since then- each state has a different set of provisions, often with various exceptions. It's frankly too complicated for me to figure out:
https://www.upcounsel.com/lectl-state-interest-rates-and-usury-limits
https://www.bankrate.com/finance/credit-cards/credit-cards-trump-state-usury-law/
https://debtadvisorsus.com/credit-reports/state-usury-laws-maximum-legal-interest-rates/
more info here https://wallethub.com/edu/cc/usury-laws/25568 (but the map in the link claiming to show state-by-state interest rate comparisons has been disabled, probably because the laws keep getting modified.)
Appreciate the correction here Mascot --- I was going back from memory from 2004 interview of Elizabeth Warren on Bill Moyers years ago and how she explained it. Not sure how I got 1986 and 1978 mixed up but I did.
Minnesota and Nebraska now makes sense to me as you mention since there were no usury laws in S Dakota a bordering state and Delaware at the time-- something Walter Wriston said in that interview clip played by Bill Moyers.
Nevertheless, the banking industry fought a battle in Nebraska from which to use in Delaware and South Dakota --- and became a way to evade federal usury laws at 12% (whether it was 36% or 18 %). This is ultimately my point about politicians and banking --- less to do with dates and names (that industry will always be on the lookout for favorable jurisdictions from which to game the system and current laws).
And that the unintended consequence of going off of the gold standard, taking on petrodollars and inflation, caused the banking industry to seek new state domiciles, incentivized new products like credit cards (which were previously very difficult to get because credit was tight), and allowed banks to circumvent the federal usury laws.
All of this could have been avoided with states and federal statutes that anything over 15% is prohibited. But instead, new markets and products were developed as an end round to many people's detriment.
https://www.usdebtclock.org/
Yes, you got the gist of it right, and brought up a history that I think is terribly important- especially for Americans. But it's a history few of them know.
I remember learning about usury in one of my social studies classes in high school- I think it was Economics (do public schools teach that subject any more?) The rule of thumb I learned (in 1970) was that any interest rate 10% or more was loan sharking! Flash forward to my receiving my first solicitation from a bank for an unsecured line of credit, in the early 1980s- $600 at 14.3%, I think it was, soon to be followed by invitations to obtain credit lines at even larger sums, at rates of interest more like 17% and 18%. And I am all like "What is going on here?" I don't think I got the first inkling of the exact details for at least another ten years.
It's also worth noting that the first invitations were sent by banks no longer in existence, that failed or had their assets sold in connection with the 1989 Savings & Loan crisis- the first bank bailout, one that not many people even know of or recall happening. I think my first card offer was Great American Bank.
More finance history that most Americans don't have a clear picture about: as you noted, until the 1980s, credit cards were issued very selectively, and almost never used for consumer purchases unless one applied for a store-connected card, like for Sears, or Macy's. Credit cards were mostly associated with business expenses. Diner's Club and American Express were two of the most well-known cards; as indicated from the issuers, the main use for the first one was for restaurant meals, and the second was for travel expenses- especially foreign travel, as a more convenient elite substitute for the more commonly used "travelers checks" (remember those? not sure they even exist any more.) And there were credit cards for buying gasoline, issued by the service station brands; those still exist.
But it was the 1978 Marquette decision- iirc, along with some related legislation passed in Congress shortly afterward, by the Democratic majorities during the Carter administration- that set the wheels in motion to turn credit card payment into an everyday feature of American consumer purchases, encouraging both increased consumption and consumer debt dependency. When it's "buy now, pay later, incrementally" (forever), that new regime has a way of camouflaging a lot of wage stagnancy (actually wage decline), because workers with modest incomes are given the ability to possess and use the trappings of middle-class living with no money down. Meanwhile, the money that they formerly would have put into a savings account instead goes to paying into their outstanding credit balance.
And here we are now. https://drjkoch.org/Intro/Spring%202018/Domhoff.pdf
So where's all the progressive politicians tweeting about repealing that little bit of the Bankruptcy Code?
Great question. Biden, actually, is obligated to issue an executive order on day one as President ordering the Department of Education to stop opposing student loan borrowers in bankruptcy court. Elizabeth Warren pledged to do this, and Biden SAID he was adopting her bankruptcy plan (with this EO being the most important part OF her plan). So, this will be a good early test of whether or not Biden is a man of his word.
Problem with Warren's "plan" is that her observations and ideas are based on bankruptcy petitioners, which is a highly biased and odd sample of the population. She should be asking whether the bankruptcy code is working reasonable justice in regard to the population as a whole. But she's not a scientist or a careful thinker, so she just wails about hard cases she sees in bankruptcy court, and can't envision the consequences of the changes she suggests.
Agree student debt should be dischargeable, but only under certain conditions. If you allow people immediately to discharge student loans, obviously nobody will make student loans, since students typically have no assets to secure the debt, and the creditor is unprotected. You can repo a house or car, but not an education. So making it difficult to discharge student loans makes some sense. But you need to allow for hard cases. Disability, physical or mental, changes in job markets that diminish the value of a degree, and so on. So you might give Chris a break, since he is obviously mentally troubled, and not capable of using his degrees to advantage. But you would not give a break to a CS grad who decides to be a ski instructor. And you would not give anyone a break in less than five years from incurring the loan, since the value of the educational asset cannot be properly assessed in such a short period of time.
Student loans should be treated in precisely the same way as all other loans in bankruptcy court. There is NOTHING that distinguishes them for special treatement. All the evidence we have from when bankruptcy was the same for student loans shows that only about 0.3% were discharged that way. Restricting, and then eliminating (essentially) the protection was precisely what cause the leding system to explode, and now catastrophically fail. The Founders (who themselves were being abused under debt to British banks and merchants) called for uniform bankruptcy laws ahead of the power to raise an army and declare war for a very good reason. The student loan exception to their wisdom proves their wisdom. In spades.
Also, you ascribe bad faith to the borrowers very inappropriately. The evidence indicates the opposite, and in the presence of what (at least on paper) look like very attrative repayment programs, newly minted graduates are highly unlikely to choose this route.
But this is really a pointless conversation now. The lending system is a catastrophic failure at this point. The default rate even before this pandemic was going to be 75%, if not higher. This is 4 times higher than the default rate for sub-prime home mortgages. At this point, the only reasonable solution is to simply cancel the loans, end the lending system, and replace it with a far cheaper, fairer, more efficient, and lower priced model for funding higher education in this country. Returning bankruptcy protections now would only ensure the bankruptcies of 20+ million people. This would overwhelm the bankruptcy courts to the point of seizure. It is time to take this lending system to the bath, and drown it in the tub.
I agree. That’s why I voted for Warren instead of Biden on Super Tuesday. Not that it did much good.
Very true. It is a workaround. There are two bills in the House and Senate right now, HR. 2648 and S.1414, which would cleanly repeal 11 USC 523(a)(8). The House bill has made it out of committee (with two republican votes, actually), but the Senate bill is stuck in Lindsey Grahams Judiciary committee, and ultimately Mitch McConnell, majority leader. They still have a few weeks to pass this. If they REALLY wanted to do the conservative thing, and demonstrate to the rabble that the "invisible hand" actually can work for the little guy from time to time ,they would pass the bill. But...I'm not holding my breath. Idiots. They should have passed this BEFORE the election and with the 44 million people who would have been greatly helpes, would have given the republican party a new lease. Absolute idiots.
True progressives are in favor of it. Most of the Democratic establishment is against it because they have the support of two powerful constituencies that like things the way they are: the lenders and the educational complex.
Student debt pays good returns and has much lower risk due to the indentured servitude built into the system. College administrators and faculty need to get paid and states no longer want to provide tax money, so student loans allow the problem to be punted to the student.
Yep. Exactly right. Think Tanks like the Center for American Progress are particularly sinister and culpable on this:
https://thehill.com/blogs/congress-blog/education/241348-student-loans-and-the-presidential-race
I heard about a small town in the Midwest (forgot what town or state, sorry) where the people working the phones knew full well how corrupt the student-loan industry was, but they said "we can't quit--the money's too good."
My sister taught at a private business college and needed the work, so she looked the other way. The final straw was when the homeless were being signed up for her online courses and told they didn’t need a computer, just a smartphone. She knew she couldn’t do her job that way. The college was raking in the money from loans that were dead ends for everyone except the owners.
I don't see any "true progressives" in politics being in favor of it. All I see is loan forgiveness and free college, neither of which are going to happen now or anytime soon.
Dick Durbin is the best guy in the Senate on this. He sponsored S.1414. In the House, people including Jerry Nadler and John Katko (republican) have championed HR. 2648. These two bills could be passed tomorrow, and the House bill has actually been passed out of committee. The Senate bill, however, requires Lindsey Graham to pass it out of the Judiciary committe, and Mitch McConnell to get it to a full vote. It could happen before the end of the year, but at this point that would be pretty astonishing. We are fighting for this nonetheless...
The -110 page Biden Harris plan very clearly states its priority RE higher education is 1) forgive tuition for students from “oppressed” groups with special emphasis on those who attended HBUs
2) tuition free attendance T HBUs
3) cancellation of $10k federal student loan debt for borrowers earning less than $125k(?) - I’m not clear as to whether that debt cancellation is then considered taxable income but that’s too far in the weeds for purpose of my comment here
I think one of the secret truths behind all of this is that the colleges are petrified at the thought of ending their $100 Billion/year cash cow. I think that behind the scenes, the liberal elite are opposed to returning bankruptcy to student loans. To date, I have yet to find even ONE example of a college President even mentioning "bankruptcy" and "student loans" in the same sentence! Disgusting. I could give many other examples of "progressive" groups pretending like they are for returning bankruptcy protections, while they actually sabotage efforts to return it. People like Deanne Loonin, and David Bergeron (CAP) come to mind.
>Not bad for a guy who had to cheat his way to a foot of the class finish in law school.
Well it's not like he drafted the legislation himself.
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.
The reason these loans are unforgivable in bankruptcy started under Bush the younger. You had medical students running up two hundred thousand or more dollars of debt and then filing bankruptcy to get out from under it, this was a modus operandi. Unfortunately, a lot of smaller fish get caught in the net. But if we choose to pay off the debts there should be also a taking over of the cause, stop the growth of administrative debt, stop all the diversity debt and etc.
Actually this is incorrect. The reason bankruptcy taken away from student loans dates back to 1977, when the media was seeded with stories about students flocking from graduation to bankruptcy court. Initially a 5 year "waiting period" for discharge was introduced, which was then lengethened to 7 years, and this was increased to infinity in 1998. Interestingly, we now know that back when bankruptcy was the same for student loans as all other loans, only about 0.3% were discharged in bankruptcy. So...there was NEVER a valid rationale for retricting, and ultimately removing this constitutionally mandated protection. See https://repository.law.umich.edu/articles/710/
Doesn't much matter what percentage of loans were discharged, question is what proportion of the dollar value of outstanding loans was discharged. Looking at the percentage of loans discharged is something a dumbshit lawyer would do. Tells you nothing at all about the impact of discharge on the loan program, because it tells you nothing about the dollar value of loans discharged.
I take your point, but the percentage of student loan borrowers seeking discharge in bankruptcy- particularly for comparion purposes with other types of loans- is very useful.
Not really since other loans are often secured loans. This is just like social services. Want free Healthcare then close the borders. Want bankruptcy allowed for student loans then you have to let banks decide who they want to loan to not force them to loan to everyone
Also, you appear to be keen to imply that a THIRD OF ONE PERCENT of the borrowers seeking bankruptcy protections could somehow imperil the lending system, which is laughable.
It's not laughable at all. Median student loan debt is only $17,000, but average is $32,700, and 600,000 of the 45 million borrows owe more than 200k, which is 12 times the median. So of course, a small percentage of high-end borrowers filing bankruptcy can have a very big effect. Thinking the percentage of borrows who discharge debts in bankruptcy is a measure of the cost is, as I said, an assumption only dumbassed lawyers or politicians would make.
Very interesting. I wonder how much of the ”bubble" is just an accumulation of what would just be bankruptcies in loan other categories
A LOT. I suspect at this late date, returning bankruptcy protections would probably ensure the bankruptcies of something like 20 Million or more people. This would overwhelm the bankruptcy courts to the point of seizure. That is why the loans must simply be cancelled. Good stimulus there, at least, instead of painful, depressing, and un-stimulative unwinding.
What other debt would you like to cancel? How about folks mortgages? Oh, and don’t think I would benefit, I wouldn’t but others might. Maybe you could foot the bill for everyone. Pony up.
There are no other lending systems that are catastrophically failed. Also, there are no other lending systems that can be cancelled by the President that won't require money to pay for itSo..only federally owned student loans.
Really? Median student loan debt is $17k. Most borrowers are not recent grads, have non-exempt assets, and would lose them in a bankruptcy case. Average is $32k, which is less than the average new car loan ($37k). Portraying this as a debt crisis is asinine. https://www.forbes.com/sites/zackfriedman/2020/02/03/student-loan-debt-statistics
Nonsense you are ridiculous. The default rate for 2004 students was 40%. They were borrowing about $12,000 on average. Today, the average undergrad (and their families) are borrowing in excess of $40,000. 80% of ALL federal loan borrowers were either unable to make payments, or were paying but their loan balances were going up BEFORE the pandemic. It may not be a crisis to you, but it is absolutely a crisis for the 40+ million people who are headed for default. You quote Zack Friedman, amont the most shameless and unabashed DEFENDERS of this, the largest big-government lending scam in the history of the country. Shame on you.
The other thing that should be stopped is "lifestyle" loans, whereby a student is able to achieve a lifestyle they never achieved at home.
Yeah this guy had a wife and got divorced all before paying off his school debt. Bet he bought a house and a car and other things as well. Probably took some vacations to Hawaii
actually I think it was Biden that made student debt not dischargeable in bankruptcy. Another of his accomplishments NOT for the people but the corporations/banksters. This is obscene...and so Amerikan and why the empire is crumbling faster and faster, circling the drain....
It was actually 4 medical students at the beginning. Not modus operandi at all. It is almost like being wrong in your analysis and your facts of the case are harming your ability to understand the issue.
I think it goes too far to say that was the reason. That certainly was occuring and was a justification.
Yes this seems like a better approach. The guy fucked up, he’s been paying the price, and the lender has absolutely zero incentive to work with him thanks to shitty legislation. They can legally drain his finances in perpetuity.
Yeah, extreme situations require extreme measures. Bankruptcy does seem appropriate for those hopeless cases. But if we excuse every regrettable choice, we’re going to create an entirely new set of problems. In bankruptcy the debtor feels a little pain. It pokes a finger in the eye. Leaves a mark. Pound of flesh.
But geez, “mistakes” hardly describes this guy’s personal shit show. If mistakes were an ecosystem, this guy‘s choices would be the weather.
This is a pretty strange comment.
The guy you’re trashing seems to have worked most of his life—including, in middle age, jobs that pay poverty wages. He’s paid $111,000 MORE than he borrowed, yet owes four times what he borrowed.
If you’re a sadist, there are dedicated channels on Pornhub and sports like MMA that might relieve some of that pressure. I’m not sure that smirking at the misery of 60-year-olds who are being victimized by banks is the coolest way to get your rocks off.
Some misery is bought and paid for with terrible decisions. Ask yourself how someone with a law degree was making such low wages? My lawyer is in bumfuck pa and charges me 500 an hour. There is always a shortage of defense attorneys to work for public defenders office and at least made 60k a year.
Are you fucking serious? Wagging your fingers at the borrowers- particularly someone who repaid HUNDREDS of thousands more than he borrowed, yet still owes HUNDREDS OF THOUSANDS MORE THAN HE BORROWED- of this lending system is entirely inappropriate. Please. This is not a bad borrower problem, the bad faith resides ENTIRELY on the lending system...what history will describe as the worst government lending scam in the history of our country. Give me a fucking break, guy.
I don't know what the general situation is, but the Chris story does not seem that predatory... Sounds like he basically decided to not make payments for a decade, very very seriously bad decision. Adjusting for inflation the amount he's paid isn't necessarily that crazy, and he did have the misfortune (or stupidity) of getting his loan in an extremely bad time for rates. As said elsewhere it's weird and probably nonsense that he can't just go bankrupt, but there's also major adult decisions this guy made that were awful and no one is that sympathetic to.
Nonsense, an entire industry of collection companies, guarantors, and others have sprung up that feast upon guys like Chris. If this were ANY other debt, he could have at least threatened bankruptcy, and gotten a fair and reasonable workout on the loan. Credit card companies, for example, routinely will forgiven interest settle on a fixed payment plan to recoup the principle, and be very happy with that. Last I checked, credit card companies are doing just fine, by the way. Since when have you ever repaid more than a HUNDRED THOUSAND DOLLARS more than you borrowed on anything other than a house, if ever?!! People like Chris aren't interested in sympathy, particularly yours. They are asking for JUSTICE, and they will get it, as the ENTIRE LENDING SYSTEM is now vanishing into a mist of illegitimacy. The default rate among all borrowers today is surely in excess of 75%, that is 4 times higher than the default rate of sub-prime home mortgages. It is catastrophically failed, and needs to be taken to the bath, and drown in the tub. It will cease to exist by popular rejection if nothing else. Whatever your opinion might be is irrelevant.
Dude, your replies are funny. Keep them up, everyone enjoys laughing at you.
Please explain. What precisely strikes you as humorous? Just saying it doesn't make it so.
troll. go away.
You said: "Since when have you ever repaid more than a HUNDRED THOUSAND DOLLARS more than you borrowed on anything other than a house, if ever?!!"
Really? Any time you borrow money for a lengthy duration this will be true. That's how compound interest works. If you borrow $100,000 for 20 years at 5% (compounded monthly), you will owe $270,000 at maturity. That is with no interim principal payments (I/O) but also no origination fees, penalties, default interest rates etc. The only reason this doesn't happen when you finance a car is because auto loans are typically 5 or 7 years. Reasonable people can argue about an optimal level of bankruptcy dischargeability for student loans, but let's not turn middle-school level math into some mysterious conspiracy.
Great. You claim to be reasonable. Let's be reasonable. By every REASONABLE metric or measure, this is a catastrophically failed lending system. The default rate for everyone with student loans right now is going to exceed 80%. That is 4 times higher than the sub-prime home mortgage default rate. It is now UN-reasonable to simply return bankruptcy protections, that will ensure the bankruptcies of more than 20 million people, perhaps far more That would overwhelm the bankruptcy courts to the point of seizure. We're throwing trillions in stimulus into the economy right now, including in the form of PPP loans that don't need to be repaid, and ALL of the stimulus measures add to the national debt. Given this, it is entire reasonable to cancel all federally owned student loans by executive order...in fact this is a far cheaper, easier, and perhaps more effective way to stimulate the economy where it is needed.
The only UNREASONABLE piece in this conversation is you attempting to defend and perpetuate the worst, largest, most unconstitutional big-government LENDING SCAM that this country, and the word (in fact) has ever witnessed. Good luck dying on that hill. I wouldn't, but hey, if you want go down that way...
Whoa whoa, no need to attack. I was openly admitting I don't know that much and just want to understand the system better. Matt's article pretty anecdotal, and I was having trouble seeing the systematic problem when Chis openly admits to putting his head in the sand for an indefinite number of years on something this important.
Seems like the lack of a bankruptcy option really is the root of this, and I'm fascinated by how that came to be. From your other answer, it seems like the "defaulting students problem" somehow got blown way out of proportion and legislated aggressively. But I'd like to know more.
Pretty good book here (IMHO) that describes the history of the problem: https://www.amazon.com/Student-Loan-Scam-Oppressive-History/dp/0807042315
Also, reading any of Matts previous articles on this topic give great explanations...
Eddie, even the National Review is calling for the return of bankruptcy rights to student loans, along with an exit of the federal government from the lending program. This is another conservative institution who agrees with the need for the threat of bankruptcy to exist on hyperinflationary student loans. What might higher education look like with the government completely out of the lending business? Certainly prices would fall. https://www.nationalreview.com/2019/04/eliminate-federal-student-loans/
Yes. That's how bankruptcy is supposed to work, I believe.
Maybe Old Scranton Joey can get something done now that he'll be in the White House.
We should all write him letters. Like ALL of us with student debt his buddies in banking and higher education fucked us with.
Garnished wages to "retirement".
Fuck this shit.
He was the guy who made it so that student loans couldn’t be forgiven via bankruptcy. I doubt he would help in any way.
! Whether or not Gropin Joe will be in the White House has been disputed.
Consider what you are saying, you would garantee students free money to drink, fuck and hang out in college on loan money. Then leaving college having no assets and only debt, they could easily file bankruptcy and remove all debt.
I am okay with this if we go back to banks can decide who to loan to and the government doesn't basically back the debt. Of course if I was a bank I wouldn't do student loans for any degrees except engineers, doctors and finance. Also, as the bank I would like to repo the property I loaned the money for aka the degree. So if you went bankrupt after becoming a doctor you lose your license and the doctorate.
These "administrators" see a lot of incentive to partner with those who don't have student's interests at heart.
I hope these concerned taxpayers care about the number of lobbyists, and lobby money the Department of Education pays out to keep people lodged in an administrative state disastrous to the economy. Here are some items to fact check. Did the Department of Education sent lobbyists across the country and forty-four million dollars of lobby money from 1997 to the time John Boehner stepped down in October 2015? Did all that money go to those on the House Judiciary committee? How many lobby dollars have gone out since, and to whom?
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!.
Fantastic post that cuts right to the heart of the matter.
I think that's a big part of it. As an example - law school is absurdly expensive. Where does that money go?
Don't get me started on the colleges. They have conveniently ran and hid from this debate. NEVER have I EVER heard a college President so much as discuss the absence of bankruptcy protections from student loans, for example. Yet, they are taking in $100 BILLION per year from this predatory lending system:
https://www.insidehighered.com/views/2017/12/14/college-leaders-should-support-bankruptcy-protection-student-loans-opinion
Also: The colleges have managed, over the past 15-or-so years, to build up massive SLUSH FUNDS, over and above their endowments. This is largely unreported stuff here, but the amounts they have stashed away is jaw dropping:
https://angrybearblog.com/2016/09/uva-slushfund-just-the-tip-of-the-iceberg
On a larger level cost of everything pretty much has far out paced income for the majority of people so people have come to accept mass debt and trickle down has become reverse gravity up for what wealth there is in this country. There is increasingly no way out for too many people and that is not a good situation. It doesn't have to be this way - it's a choice by those in power.
There’s an excellent book called Failing Law Schools by Brian Tamanaha that answers some of those questions. It’s pretty bleak.
I agree with everyone above that universities have largely become predatory institutions—or, in the case of schools like NYU, part-time predators and part-time real-estate speculators.
Law schools can be big profit centers that funnel cash to the rest of the university.
Law school is itself one of the biggest scams out there. It's an exorbitant fee and hazing experience to allow you entry and initiation into what can be, without guarantee, a lucrative career. You come out of 3 years of law school a lot poorer and barely of any use in the practice. The only thing that teaches you how to be a lawyer is practical experience, hopefully under the supervision/mentorship of experienced lawyers. Law school itself is a joke. It can give a good ROI, in pure terms of cash-in/cash-out, though the requirement to make the investment is an artificial barrier. But in terms of ROI on the 3 years spent there, you're getting fleeced. Those three glorious years do not put you three years ahead of someone who never went to law school. Maybe 6 months, if I'm being generous.
I'm intrigued with the fact that in some states, it's still possible to "read for the law", pass the bar exam and be certified as an attorney at law without attending law school, or by attending only a year or so, or by clerking and learning the law codes on the job, and then passing the exam. This was once a very common means of becoming a lawyer. https://en.wikipedia.org/wiki/Reading_law
According to the Wiki link, 12 US presidents did it that way, including Abraham Lincoln.
As did 12 Supreme Court Justices.
You probably have to be diligent and self-motivated. But you'll save a fortune. I think that once certified in one of the states permitting that method, it's possible to obtain a license to practice in most of the others.
More from the Wiki page: "As of 2014, California, Vermont, Virginia, and Washington permit students to take the state bar exam after reading law with the help of an attorney as an alternative to law school. New York, Maine, and Wyoming allow students to study in a law office together with some period of time in law school.[7]"
One of my relatives sat for the Bar in Georgia. This was early in the 20th century and I am not even sure if he went to college let alone law school.
Law school in my experience is also geared to offer immediate success to those with the right background , right look and the right class.
This is why I am aiming for a master's in accounting. Only 1 year of coursework. I know I can learn anything on the job the problem is employers have so many of us plebs to draw from they don't need a well trained work force. They can simply hire someone else rather than provide advancement for those they employ. The only thing the master's I am aiming for will grant me is entry to the jobs where I can actually learn the business of accounting. Credential inflation is a bitch, but hopefully the masters degree shows I can jump through their hoops and am worthy of a job and maybe even guidance and mentor-ship. I am so sick of being a middle aged college educated administrative assistant. What the hell did I do to deserve this? oh yeah I did what everyone told me to do and just got a degree. I come from a professional family of doctors, scientists, IT professionals, and attorney's hence it was always preordained that I would go to college, but that was the scope of the options that were presented to me: go to school, get any degree, and the jobs will be laid before you. all that need be done is to walk the path to prosperity. I went to college to avoid the mindless data entry work I do. FML
This is way off topic, but when a Florida law professor was gunned down by a hitman in his driveway, a lot of people at first thought it was because he had a blog where he was defending law schools against this criticism.
Turned out it was over a custody dispute.
Country is way too angry right now...
Are there any villains, though? We are all just pigeons pecking the button that makes the food come out. If I was a university president, I would have a massive endowment, a praetorian guard of administrators and define my job as one of having lunch with extremely wealthy people rather than attending to grubby student needs.
I, for one, vote for the lobbyists who keep getting the lenders the legislation they want, as the #1 villains, with the politicians who are in bed with the lenders and lobbyist as a close second.
Sigh...there are no private lenders. The government originates almost all student loans for higher ed. Even before 2010, when the government completely took over the education loan market, the private lenders just originated and serviced the loans. The government guaranteed the loans. Banks were not then, and are not now, the issue in the education finance market.
Don't get me started on the colleges. They have conveniently ran and hid from this debate. NEVER have I EVER heard a college President so much as discuss the absence of bankruptcy protections from student loans, for example. Yet, they are taking in $100 BILLION per year from this predatory lending system:
https://www.insidehighered.com/views/2017/12/14/college-leaders-should-support-bankruptcy-protection-student-loans-opinion
Also: The colleges have managed, over the past 15-or-so years, to build up massive SLUSH FUNDS, over and above their endowments. This is largely unreported stuff here, but the amounts they have stashed away is jaw dropping:
https://angrybearblog.com/2016/09/uva-slushfund-just-the-tip-of-the-iceberg
These are multi-national corporations, doing what MNC's do.
Bingo.
An interesting comment on one of these stories about the exploitation of adjuncts: someone said "I bet every one of those tenured profs (who pretend to wring their hands and perpetuate the system) can quote Marx."
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.
Rick, my main problem with your thesis is that the the vast majority of students are minors when they sign the papers. Plain and simple this is a predatory system feeding on the naivety of our youth. Now you can rightly blame the parents somewhat, but the lower class has been spoon fed the lie that a college degree, not matter where it is from or what kind it is, is a ticket to the good life. That's just simply not true.
Also why don't we hold banks to the same standard? They *should* know better than to make so many questionable loans, it's their business to do so for crying out loud. Don't you think the banks guilty of making bad loans deserve to go bankrupt and have their shareholders eat the losses? Student debt should be made dischargeable under bankruptcy, and banks that make loans to people unable to pay should suffer losses for doing so.
“18 years old” is not a minor. It’s considered an adult who can sign and legally enter into binding contracts. We have an 18 year old son. We’ve saved for his college since he was born and will give him the gift of being able to start life post-college without debt. He also works his ass off doing any type of manual labor that pays. No coffee shop hours for him. It wasn’t easy but I’ve noticed one thing raising children through out this time. One of the problems with modern society is that we infantilize people in this age group (18-25) as if they are no more capable of dealing with life than a 5 year old. There’s no accountability and now instead of honoring debt obligations, everyone is clambering for debt-forgiveness. It’s a real mess out there and though I pity Chris in this article, he’s made some really poor choices through out his life.
Did you ever think maybe Chris lacked parental guidance? Poor kids often have disinterested or overworked parents. I was one. I made bad choices but didn’t exactly have great role models growing up. Also, at 18 I had no clue how money worked. I worked summers in tobacco making a little money to buy some clothes for school. I learned to drive whenI was 18 so basically had little social life other than church or reliance on friends or school activity buses. People need help.
To be clear, almost all student loans today are government originated and sold. Banks aren't pushing student loans on anyone. A small handful of PEL lenders like Sallie Mae exist almost exclusively to do the gap lending and almost all of those loans are parent co-signed.
Um, not true. Someone has to guarantee those loans.
Fuck. Simply telling a child, and at 18 I had no idea what I was doing and was absolutely a child, that all they need is a degree is god damn criminal. All I was ever told was go to college and get a degree. It doesn't matter what your degree is in. Forget the money and just focus on that advice. I am so fortunate to have no college debt and STILL I have no viable career. Writing all of those papers about NGOs, ISLM curves, global governance, political theory, and public policy did fuck all for me in the workforce where all I do is mindless administrative work. Is weed federally legal yet?
It's disingenuous to tell kids that people with college degrees make more than those who don't. Correlation does not imply causation and a piece of paper does not magically transform you. It also is wrong to treat all college degrees as equivalent, and degrees from different universities as equivalent. It is also a bad idea to forget economics and follow your passion unless you are born into wealth or have extraordinary talent. If following your passion won't pay the bills...well, that's what hobbies are for.
"The banks" aren't making the loans. The federal government is. https://www.youtube.com/watch?v=TYo2SR8r1kU
Since 2010 as part of the ACA the feds took over most origination. Before 2010 the majority of all student loans were from private institutions. Since 2010 less than 10% originate from private institutions. The majority of debt is now held by the federal govt. But the point stands that when the law was passed it was a giveaway to banks.
No, it wasn't. Under the FFELP system, private education lenders originated the loans, but the government guaranteed the loans and even subsidized the servicing and default collection costs.
Not so. The "vast majority" of college students are NOT 18 when entering college and signing loan papers. Further, virtually none are minors when signing for their second year or grad years.
While there are certainly some who are 17 when entering college, they do not by ANY stretch comprise a "vast majority" of Freshman.
The 24 hours between when they turn from 17 to 18 gives them enough worldly knowledge to assume massive amounts of debt, not not enough to purchase a beer? That's the hill you want to die on?
Moot. Your statement was untrue. Are you really sure the hill YOU want to die on is one of hyperbole and untruths?
Obviously the hill YOU want to die on is the one where you defend, justify, and perpetuate what history will record as the most largest, most unconstitutional and nationally threatening GOVERNMENT LENDING SCAM this country...and in fact the WORLD has ever seen. Nice job. Take a bow. And please...accuse me of hyperbole. I dare you to.
It's not untrue. They can't even buy a beer. They have no life experience. They have no assets and no job. Are you going to argue that everything that's legal is also moral?
Your silence on the banks culpability is deafening. For the third time, why do the lenders need special legal protection?
Also, you neglected to answer the question about the banks. The banks absolutely know what they're doing. Why do they need to be protected from these predatory 18 year olds?
If these students aren’t smart enough to read a loan agreement, can we roll back all of the privileges and obligations we’ve moved from 21 to 18, please? No more drinking, buying tobacco, voting or enlisting in the military for them. They aren’t mature enough it seems,
I'm not sure what this has to do with holding banks liable for poorly performing loans, but sure, i'll address your questions:
1. On alcohol- Students can't drink until 21 in the US. Since you didn't know that the drinking age must be 18 in your country. Tell me, Rick, where are you from and why do you feel so strongly about student loans and bankruptcy laws that don't affect you? I find your motivations peculiar.
2.On smoking- I'm all for pushing tobacco back to age 21. It's a bad habit and a public health nightmare. Kids don't know what they're doing when they get hooked on tobacco. Studies have shown that those who pick up smoking at a young age have a much harder time quitting later. I'm glad we agree.
3. On voting- Younger kids mostly don't vote and i'm sure a healthy discussion could be had on that topic.
4. On enlisting- Enlisting fresh meat for the grinder into the forever wars is a privilege now is it? If it's such a privilege how come more elites don't enlist their children? That aside, even if you enlist you can always leave no questions asked during basic training. After you're on active duty, the army can discharge you if you cannot perform your duties due to physical or psychological reasons. You can also be discharged for other less honorable reasons, but the point is that you can get out. It's easier to quit the army on active duty than it is to discharge student loans. How sad is that?
Now that I answered your questions, how about you answer mine. Why can't the banks be held accountable for the bad loans they issue?
I disagree with every single one of your statements. Pushing the age of adulthood back to 21 didn’t make for more mature 21 year olds. It made for less mature 25,26,27 etc adults. The sooner people can take on real responsibility the better. This baby-ing of perfectly capable adults has to end.
It’s really interesting to see how much schadenfreude people can dish on the Internet and Rick here is quite a champ. The logic displayed is always so simplistic and vapid. “Look at me! I took out a loan around the same time you did and it all worked out! I’m smart! You dumb!” I did what you did and didn’t fuck up, so obviously it’s your fault.
I could go down the list of misfortunes Chris dealt with that weren’t really his fault again (though of course Rick would find a way to blame him for them anyway) and I could point out how Chris has admitted to making big mistakes. I could also point out how he has tried to make good despite his misfortunes and mistakes, including paying over double his loan amount while still owing over 3x the original amount. I could do all that, but that obviously won’t make a difference to Rick here, because he is a giant asshole.
Your righteous indignation fails you. IF the advocate (Matt Taibbi) for forgiving misfortune wants to use an anecdotal fairy tale of woe, then it is perfectly acceptable for the opponent to use an anecdotal fairy tale of success. Neither offer substantive information on the case and plan for which they argue.
Of course, useful and substantive information isn't really the goal in this kind of plea; fleecing the taxpayer is. And tugging at heartstrings by showcasing the hard luck of what may be an insignificant few is the favorite tactic of the swindler.
Nonsense. The "Taxpayer" (actually the Department of Education in lockstep with their crony, politially connected contractors) have been milking the borrowers for a King's ransom for decades under this unconstitutionally predatory lending and collection regime. Did you know that the Department of Education started booking profits of about $50 Billion per year starting around 2012? Did you know that some of these profits are used to fund controversial programs like Obamacare? No, you obviously did not. Did you know that the Department of Education has, astonishingly been making a PROFIT, NOT A LOSS on defaulted loans going back to 2004 and before, in the absence of bankruptcy protections, statutes of limitations, and other fundamental consumer protections? No you didn't. Did you know that the Department of Education fights TOOTH AND NAIL, behind the scenes, to keep bankruptcy AWAY from student loans? No. Why would you. This is now a CATASTROPHICALLY FAILED lending system. The "Taxpayers" have pushed this lending system to the point where we now are looking at t default rate of over 75%, perhaps WELL OVER 75%. This is about 4X the default rate of subprime home mortgages. This lending system is done, finished, toast, FAILED. You might not like that FACT, but that is your problem. The "taxpayers" created and perpetuated this lending scam, and now they, along with you and I, will be watching it vanish into a mist of illegitimacy. No one here is seeking your approval or you admonishment. Your opinion, frakly, is irrelevant. If you have thoughts about what the next higher education lending system should look like, great...let's hear it. All else you might have to say is just snarky insinuations, insults, and babble.
This is a great example why the Federal government should have stuck to its knitting, running the departments of State, Defense, Justice, Interior, etc. and stayed out of the transfer payments business. It creates ugkynkeviathans like this that satisfy no one - the takers want more of it and the makers want less of it amd that’s how it gets twisted into something horrific.
Yes, the default rates on student loans are higher than subprime mortgages. But that’s only because the 13th amendment prevents the government from repossessing the borrowers- the containers of the object of the debt, whereas secured lenders were able to take possession of the homes.
Taxpayers - true taxpayers - didn’t create this problem. Consumers of the product did and they did so with relish. They wanted subsidies and they got them. The aspect of the program that bites them on the ass now is that back when people were less grabby and demanding, the program was built based upon a quid pro quo - we won’t underwrite and price the loan based upon sound economic principles and thus, you can’t get out of it if you screw up or if life smacks you in the head.
Again, this is what you get when the central government, with an unlimited printing press colors outside the lines and expands into areas best left to state and local government.
Lol. "Consumers of the product", meaning the students, had NOTHING TO DO WITH THE CREATION OF THIS BIG GOVERNMENT LENDING SCAM. This was a creation of Sallie Mae, in concert with the Department of Education and the colleges....ALL OF WHOM are making out LIKE PALACE THIEVES. You clearloy need to learn something about this uniquely predatory, unconstitutional, nationally threatening lending system, buddy. We're probably at an 80%, if not higher default rate. THis is 40+ million real, live TAXPAYERS who are being conquered and enslaved to the great benefit of the government, and colleges, the lending swamp, and NO ONE ELSE. Why don't you read up a bit on this lending system before speaking about it?
https://studentloanjustice.medium.com/the-conservative-case-for-cancelling-student-loans-9e085a168972
You will save yourself a lot of embarassment, and even some culpability for the perpetuation of this cancer on the country.
Of course you're mistaken.
1) Student loan delinquency or default as of Q3 2019 is less than 11 percent, not "WELL OVER 75%"...
2) Student loans average only 33K... only slightly higher than a new entry level car
A tale told by an idiot, full of sound and fury and signifying nothing.
Get your facts straight son, then dust yourself off, step back to the plate, and take another swing.
Nonsense. You're facts are WRONG. The TRUE, LIFETIME default rate for 2004 students, we now know, is over 40%, and that class of borrowers was only borrowing around $12,000, where today the average undergrad (and their parents) are leaving school with over $40,000 in loans. You are putting up some transitory metric, probably lifted from highly inaccurate Fed data that means NOTHING. Also even the most generous calculation of average student debt is $1.6 Trillion/44 million is $37,000 per borrower, and again, that $1.6 Trillion does not count a tremendous amount of interest (interest on loans in default, for example), so the TRUE debt per borrower is closer to $44,000. Further more according to Mr. Wayne Johnson, who RAN the federal lending system under Trump, 80% of all federal loan borrowers were either uunable to pay (~65%), or were paying but their loan balances were going up (~15%). BEFORE THE PANDEMIC. Maybe you should stop the whole "google expert" ruse. It is not impressive, and not helpful whatsoever to discerning the truth about this catastrophically failed lending program.
*your*..."Your facts are wrong..." not *you're*
It appears your command of the language is as flimsy as your command of statistics, analysis and reality.
I can't say I'm surprised.
You called this story an "anecdotal fairy tale of woe." So, this is a fiction? A lie? You come here because you think Taibbi is lacking in credibility and want to call him out on making shit up?
You think this is "the hard luck of what may be an insignficant few." 1/6 of all Americans are saddled with student loan debt. It's the second highest form of debt behind mortgage debt, higher than credit cards and auto loans.
https://www.forbes.com/sites/zackfriedman/2020/02/03/student-loan-debt-statistics/?sh=389b051b281f
People can't discharge this debt even if they have legitimate reasons for being unable to repay it, so obviously it's a low risk proposition to hand out student loans to whoever comes in for one.
I disagree. The more people eligible for a benefit, the more you enlarge the pool of people who are not part of the target audience. Look, for example, at the current deferral of all student loans. There are plenty of people out there who were paying and can afford to pay and feel that it’s free money not to pay. Just like the PPP loans that went out based upon payroll rather than based upon need.
How is anecdotal a fiction or lie? Your not doing yourself any favors misrepresenting every argument.
*you're*..."you're not doing yourself any favors..."
Oh goody a pedant.
You conflate having a student loan with not being able to repay a student loan. That is of course, a illogical. To suggest that 1/6th of all Americans share Chris's plight is comical.
Actually, the two are nearly synonymous. Wayne Johnson, who RAN the federal lending system under Trump, told me just before the pandemic that 80% of ALL BORROWERS were either unable to pay on their loans, or they were paying, but their loan balances were increasing. That was BEFORE the pandemic. We were headed to a default rate on these loans of over 75% before covid hit. This is now a catastrophically failed lendinng system. Time to take it to the bath, and drown it in the tub. It is vanishing into a mist of illegitimacy, and there is nothing that you or I can say or do to alter that fact. Inculcate that. Not quite so comical when you do. https://studentloanjustice.medium.com/the-conservative-case-for-cancelling-student-loans-9e085a168972
LOL..citing your own lies...a whole new take on begging the question.
Perhaps Chris shouldn't have taken all that money in the first place and should have been content to love freely and count on the kindness of strangers who don't mind material wealth. But is it really fair to ask (force) those who do find happiness in wealth, to share what they slave all their lives for, with the evolved children of Aquarius who find peace love and understanding to be "what it's all about"? SOMEbody's gotta go to work to put food on the table and a roof over the heads of all those evolved souls.
I appreciate your thoughts, here, but this lending system is well beyond repair. The government will likely never see even $.20 on the dollar for the junk loans they are sitting on, by and large. It is far better to simply cancel the loans, and end the lending system at this point. Call it stimulus. I suspect that Trillions (not just the few hundred billion that is actual unpaid principal for the federal loan porfolio) have been thrown out to wealthy individuals in stimulus that did not deserve or need it. If 10-15% of student loan borrowers wind up with a benefit they don't necessarily need, it is by far and away worth it to have the other 30+ million people out from under the weight of this oppressive debt. Also ALL federal student loan borrowers are determined to be "financially needy" as a precondition for receiving the loans, so this is nothing like (for example) the 43,000 millionaires and billionaires who just received an average of $1.6 million in pandemic stimulus. See Change.Org/CancelStudentLoans
There is such a thing as emotional capital as opposed to economic capital. If you choose to follow your muse, work less hard, spend more time on to recreation, you are acquiring a form of capital that someone who takes on a nose to the grindstone approach. How you spend your is a form of capital allocation. Having made your decision to,follow your muse, etc, it’s pretty annoying to listen to whining about income and “inequality”
Chris was making $28,000 a year in the 21st century. If you purchase an undergraduate degree and a law degree and make considerably less than a full time nanny makes, your life has gone badly. There's nothing more to say here.
You comment betrays your ignorance on this topic. This is, and really was never a "bad borrower" question. We are looking at the slow motion evaporation of the worst big-government lending scam in the history of this country. The borrowers have not changed significantly since the 1970's. What has changed is the lending system, and the prices that the colleges now charge. When 80% of all borrowers were either unable to make payments, or were paying, but their loan balances were going up, this is a catastrophically failed lending system. You sitting on your perch, looking down your nose and wagging your judgemental fingers at the innocent victims of this vicious lending scam has absolutely zero value. Frankly, it is an embarassing thing for you.
Your comment betrays your ignorance on this topic. There was ALWAYS a “bad borrower” question. Of course there is a lending scam, but it is one played against the American taxpayer. Once the Feds got involved, they NEVER underwrote the loans. They never looked at the quality of the courses that the borrower was taking and whether it would lead to a degree that made the borrower employable. They never required a parental guarantee which not only would provide credit support, but would also provide some oversight regarding the courses and degrees the borrower would pursue. And on top of all that, they loaned at preferential interest rates relative to the quality of the credit - a deep discount. More of the welfare state. You’re sitting on your perch, looking at hard working people who played by the rules, took on debt and paid it or avoided it by working their way through school and you wag your judgements fingers at the innocent taxpayers who are already paying for a ton of handouts already and want to lay more on top of them has absolutely zero value. Frankly, your left wing gimme gimme gimme attitude is an embarrassing thing for you.
That’s true. I pay my office guy - who doesn’t even have a high school diploma - more than $28,000.
Okay, but: what kind of world do you want to live in?
One where worthless, stupid losers—people who aren’t as admirable as you—get crushed to further enrich the worst people and institutions on earth?
In other countries, college is free. Here, college is described to teenagers as basically essential if you want to be a full human being. The media, teachers, and one of our two political parties endlessly repeat the message that “college = success and no college = failure.” Obama has convinced the NPR crowd that that a college degree is a cure for poverty.
People who aren’t as excellent as you make mistakes when they’re young. They impulsively join the army. They let colleges and relatives talk them into getting degrees they can’t afford. They don’t read the fine print. Some of them deal drugs and end up serving time.
I get that it sucks to be so much stronger, smarter, and better than others, and never receive a prize or the recognition you’re due, but: how exactly do you gain from watching someone’s meager wages and retirement checks be garnished long after he’s paid back 220% of what he borrowed?
I have several issues with your post.
There is something known as the law of natural consequences. Touch fire, get burned. Make foolish financial decisions, lose money, incur large debts.
Someone pays 200% of what they borrowed, including penalties and loads of interest because they didn’t meet their lawful obligations that they freely assumed. That’s how things work. Anyone who has taken out a mortgage gets a disclosure by the bank under the Truth in Lending Laws. Many people are shocked by it because it has to disclose how much in interest and principal you will pay over the Logan’s term. Thus, for example, if he borrowed $100,000 at 7.5% when Rick was 29 years old (reasonable amounts and terms at then time) on 30 year terms, he’d have paid....wait for it...$240,000 over the term of his loan or 240% of what he borrowed.
Ah, yes, but you say Chris still owes a ton of money. Yes, perhaps because he didn’t take his debt seriously. He seems to have thought that he made a deal with his lender that somehow THEY were responsible for his ability to obtain employment sufficient to service the debt he freely incurred. As if they were responsible for his choice of what to major in, what school to go to, what jobs he’d take and where he’d live. He behaved as if his debt was optional - not paying it for periods of time, incurring large penalties and piled up interest that began to compound like topsy.
And yes, I was wise enough to take things seriously and responsible enough to do without things and experiences that allowed me to get out from under my debt. What would you do? Rescue every one who underperforms? Why should that be a cost that is borne by others? I guess we should eliminate all bad consequences in life. Why do they give out only one gold medal at the Olympics when maybe 30 people compete? Its not fair! Bwah Bwah Bwah!!!!
You would eliminate moral hazard in life. Consider a loan an “option” that will be repaid only if it works out for you.
Your post assumes that huge swathes of the population are losers who are gulled into making poor choices by misinformation. Can it be that so many Americans are that gullible and foolish?
And how do you measure success? I grew up poor, the son of immigrants. Many of my friends didn’t go to college - they became cops, fireman, grocery store workers. They live within their means and are not “losers”. They were serious minded people who understood that college was not for them and are mostly happy with their lives. Others did go to college and there is a spread of outcomes, from amazingly wealthy to unsuccessful. That’s how life works.
The question is how you define success. By money in the bank? He who dies with the most money wins? I know plenty of miserable people who have lots of bank. And why do you feel the need to define success levels in a comparative frame of reference? The happiest guy I know is a retired cop who never earned $100,000 in his life, who still works after retirement to pay his debts, loves his family and smiles all day long with his lot in life. He’s aligned his needs and his wants with his resources, has a happy family life and loves his job.
If you drink the Koo-laid offered by “THEM” it’s your own fault. Everyone in the world doesn’t have to pay for your mistakes.
And as to other countries providing educations without cost, don’t kid yourself. There is no such thing as FREE. Someone is paying the bill. You seem to just want something for nothing and are angry about the amount of coin in your pocket, relative to your appetite and how much others have achieved.
Rick has a lot of platitudes about morality and responsibility, but the truth is he is a sick and twisted individual that spews a lot of bullshit to justify being an asshole.
Chris: "Hey, I know I fucked up, but this is really difficult to deal with, can I get some help?"
Rick: "No! Fuck you! HA HA HA HA! Look at how stupid you are! You fucking dummy! You should have been smart like me, then you wouldn't be suffering!"
It's a pretty disgusting world where people have bought into this mentality that individuals fucking society over under the legal fiction of a corporation get to duck personal responsibility, but individuals getting fucked over by corporations need to eat shit and like it. People like Rick make it all the worse by actually taking pleasure in the misfortune of individuals and jeering right at them as if this is some game he has won and Chris has lost.
So perhaps you'll be sending Chris a check to help him out?
Name calling and ad hominem attacks are not really forms of debate. This is a comment section where people express opinions. Is it possible for you to disagree with Rick without implying he's an asshole filled with bullshit? Asking for a friend.
Rick's a big boy. I don't appreciate people attacking others here for language, frankly. That is a form of censorship, and in itself poisons free speech. I appreciate Harvey's choice of words. If we need the PC cops to come here and clean the place up, we'll call you.
Thats......not what Rick said at all. Terrible response.
Every last one of us is and has been a loser at one point or another, for short or interminable periods, struggled, been humbled by life, thought we couldn't get any lower, and yet still did. Many of us never recovered, many of us overcame. So it's not the lot in life you've been dealt that determines your worth or whether you're a winner or a loser. You're the one putting people in this categories and reserving your contempt for those who don't loudly take pride in and blame others for their losses.
Well that is your opinion and you're welcome to it. Obviously, others disagree with you as evidenced by their choice of words. It's called free speech, and I for one am ALL FOR IT. If you are insulted, offended, or hurt by the syntactical choices that others make while expressing themselves so much that you choose to comment on that rather than the substance of the debate, you only serve to distract and and confuse the debate. Notice how absolutely nothing in either my comment that I am typing RIGHT NOW has NOTHING to do with the subject matter? Yeah. You caused that. Knock it off. Stick to the topic.
Rick you're making a logical fallacy by implying since Chris made some stupendously bad choices everyone who took on student loans is guilty of the same. But 17 and 18 year old kids were fed propaganda about how they needed a college degree all the way through high school and were lied to by their guidance councilors and admissions staff. This was plain and simple wealth extraction from the younger generation to the older. The kids who naively signed themselves into nondischargeable debt that they cannot service deserve some compassion. The banks, who know better and lobbied for this exact situation, are the ones who deserve our ire.
I don't support completely forgiving the loans, but situation right now is unsustainable and unjust. At a minimum the following should be done:
1. Allow refinancing to a low interest rate. It's a compromise between doing nothing and forgiveness.
2. Allow discharging of student debt in bankruptcy.
3. Make it mandatory that when payments are set up a certain percentage goes towards the principal. Interest only payments should be illegal.
Nonsense. What, exactly, is NATURAL about a lending system from which every consumer protection (that exist for EVERY other loan) has been stripped, unbeknownst to the borrower, such that guys like Chris can see an $80,000 loan be artificially JACKED to a HALF MILLION DOLLARS OR MORE?!! LOL. There is nothing "natural" about this, you douche.
You’re out of control with your name calling and personal attacks. I recognize you have some preeminent knowledge and experience in this area. But for someone who wants to educate other people about an injustice, you sure are unjust in your general nastiness
Nonsense. I'm DONE with "up by your bootstraps" DOUCHES like what we see from the commenter above trying to lecture us on hard work, financial management, etc. This is not a problem that benefits WHATSOEVER from such comments. In fact, such comments only serve to kill the conversation that needs to be had about this unconstitutional lending SCAM that will go down as the largest not just in US History, but world history. We are at the point now where people fleeing the country and even KILLING THEMSELVES as result of this debt being inflicted upon the country, which is literally conquering and enslaving over 40 milliion people in this country, and threatens to ruin far more as long as assholes like this guy are allowed to interrupt this conversation with their nonsense. I don't appreciate you trying to assume the position of PC police here. Let this guy respond as he wants. Neither he, nor I need you stepping in the middle to call PC balls and strikes.
In SOME countries college is free - but those same countries have extremely high tax rates.
Nothing is free. Someone always pays. In this country, 45% or so pay nothing and more pay relatively little. So it’s easy for them to say I want more....
45% pay little because they have nothing. It’s an indictment of the system that the wealth is so skewed.
I agree. There are far too many people who lack the desire to provide for themselves. Too many people who have gotten too comfortable in the safety hammock of the nanny state.
That's true. College tuition is not "free". Germany for example, where my brother teaches, has very high taxes, few private colleges, and far fewer people going to college. This enables the government to subsidize higher education significantly. However, they also have a very strong apprenticeship program and people know that they can make a respected and good living in the trades. It's also a more equal society. People feel less pressure to take a huge gamble on a private college or some degree which they are ill-suited for in the hopes they can stop living paycheck to paycheck, or finally get decent healthcare via a better-paying job.
Good point to mention Germany. They have Hauptschule, Realschule and Gymnasium. Basically, you get sorted into a track based on what your academic abilities are. The Uni's also have limited space and there are decisions that we need X number of dentists, so let's put those in the pipeline. And of course, no student gets fleeced $40k to get an AA in culinary, there's an apprentice system in place.
There's plusses and minuses to this. Late bloomers would be out of luck or on their own to try and start something new. But I think that's a more realistic approach since you're not burdening those young people with debt. Most of Europe has low to no-cost education, and is friendly to non-Europeans going there to study. It's not free, but compared to America, it's a screaming bargain. You can get med school for like $10k a year for non-residents.
Good rundown of the times. I graduated in '78, just before the big pushes started to get everybody to go into hock for that parchment. I took out no debt because my folks made too much money and the system was not going to lend me anything. So I ended up doing it by myself- lived very simply- almost deprived in a sense.
But the system is predatory, or at least got increasingly so through the 80s. This is a classic case of the elites losing any connection to the citizens. I understand your questioning of just how educated a person really is if he doesn't pay attention to his world. You're right on that. But I do have a lot of trouble with a system that blatantly lures people into servitude. It's not what a sane, civil society does to its people.
But that seems to have become the American Way. And by the way, IMO college is currently more scam than not- the debt is only part of it. I won't be encouraging any of my 3 kids to go.
You do your 3 kids a tremendous, if not cruel disservice. Learning is one of the great joys in life. The 4+ years of college foster an open mind that sates the curious and discourages a mindless existence. It's not about the riches they may go on to make. It's about feeding the single greatest gift man has over the beasts of the field: knowledge.
I am not disagreeing with you in principle, but the idea one has to subject themselves to the current system to enjoy the discovery of new ideas and learning about the world is hugely mistaken. I AM disagreeing that 4+ years of college “fosters an open mind and discourages a mindless existence”. I live in an elite university town (Evanston, NU), and I am continually amazed at the extremely narrow intellectual and ideological bandwidth of the professoriat; I’ll spare you the examples. To think that the current university system holds a monopoly on learning about the world is a misguided perception.
I don't typically deal (or argue) in absolutes. In fact, the college experience DOES foster expanded learning and intellectual growth. It does not guarantee it, and a community college probably doesn't offer the same fostering as an Ivy League experience. Nor does a community college cost what an Ivy League school costs.
Sending your children out to experience the world and attend the fabled school of hard knocks is certainly an option. But you'll not convince me it's a better option for fostering intellectual endeavors and the joys that accompany them.
As for narrow minds and narrow perspectives, education is not always a cure, and I agree with you that often education can foster a narrower mind rising out of arrogance (I'm educated so I'm right).
I’m not trying to convince anyone of anything. I don’t believe the school of hard knocks is the smart way to pursue one’s life. I am saying that imagining a 4+ year degree at (an American) university is the way to enlightenment is an astoundingly small view of how to live in the world. Your observations about arrogance are spot on. I have actually had people debate me by saying “I went to Stanford” as the trump card in their argument. Here’s an idea.... I live a good chunk of my year in China, Wuhan to be exact. Spend a few grand, attend a Chinese university. You’ll learn more about the world than you’ve ever imagined.
I studied the politics of China while in college. I studied the politics of the USSR while I was in college. Both were fascinating, and prompted me to go to both China and the USSR. I likely would not have put either on my vacation bucket list had I not studied them in school first. In fact, had it not been for the opportunity presented to university students to study in the USSR, I likely never could have even gotten in to the country in the first place. Oppressive communist regimes don't really make hot tourist attractions, but the incredible history, culture, politics, and sociology of the countries that I learned about while in school led me to them and I was the richer for those experiences; experiences that help me today when looking at a lot of the problems in this country (most notably the demise of our free and independent press, lamented by both Taibbi and Greenwald here on substack).
I find it interesting that institutions of higher learning are so scorned by absolutists who look at the limitations of those institutions and argue them as absolute and therefore worthy of scorn, contempt and disparagement. Perfection being the enemy of good, I would never encourage my kids to avoid opportunities that, imperfections and shortcomings notwithstanding, provide an environment so fertile for intellectual rigor and growth. Opportunities, again, a key word in my position, are entirely what a person makes of them. And there are few places in the world offering more opportunities for everything from learning to make a bong out of an apple to pondering existentialism and that wondrous universe beneath one's thumbnail.
"I have never let schooling interfere with my education"- Mark Twain
Did you by any chance produce colored brochures for colleges to entice freshmen to attend and their parents to pay the bill?
The claim that college fosters an open mind is bullshit and just not true. At one time perhaps, but currently? No way.
The college route offers a very limited view of the world. Here's my experience: 4.5 years to get a degree in Range Management (grazing, soils, forage plants, animal husbandry). Right out of college got a job with the Forest Service in Nevada as a range rider and wild horse tech and occasional fence builder. What a life! Wasn't just a job or a lifestyle- it shaped me. 14 hrs/da in the saddle (got paid for 8, but I didn't care), 10 days on 4 off, on my own just me and the horse (or mule as the case may be- the source of my title in these comments). Did that for several years before going back into wildland fire where I made my career. And that career, being seasonal and all, allowed me to see the world. No college needed.
Only needed that degree to get that initial job, since then never really used it though I will admit to still having an interest in range. So there is that.
But, any given day on horseback or on the fireline grants me more adventure, excitement and learning than 4 yrs total of college ever thought of doing. In just one day! Get the perspective? It's out of all proportion.
Riches? Not from working, no. No debt either.
Think abut this: I could send my kid to school for language study. He takes 1 hr/day 3 days/week. At the end of 3 years he does ok. But put him in Peru- their Spanish is clear and beautiful- do a home stay and individual studies and he'll come out in 4 months speaking like a native, with incredible personal experiences. Conversely, what does he do in college after class- go drink beer or paint his face and go to a lousy football game? You're way over rating the college experience IMO.
oh yeah my vast knowledge afforded to me by my liberal arts political science degree sure gets me interviews at companies that want very specific skill sets and experience not someone "who can learn." My first professional job with my fancy university degree was working for Harris Teeter cleaning mop sinks with my bare hands for $8.50/hr. I value my degree greatly, but that doesn't pay my bills or give me the career growth I so desperately need to stave off rising healthcare, HOA dues, and food costs. I wish I had been told to become an electrician.
I'm sorry you've been unable to make the most of your college education. Perhaps it's your interpersonal skills that, as evidenced from your post, have failed you, not your education?
You probably would like it.
My second job was cooking and serving drinks at a bowling alley for min wage plus tips.
My third job was pricking plasma donor's fingers and screening their blood pressure for $10/hr at a plasma donation center.
My fourth job was working 10 hour shifts on the manufacturing line where they packaged the medicines produced from the plasma donations for a whopping $12/hr. I went to college because I was told I would work at the factory without a degree, but I had to work my way UP to factory work. You can have your knowledge. It is worthless.
"And I’m getting tired of the deflection of attention to BIG CORPORATIONS and their bail outs."
I hear you, but I'm getting tired of politicians and talking heads who deflect blame to debtors. Yes, they could have been more responsible with their money and they weren't, or they thought they couldn't be. Blaming them for causing their problems is well and good. But I can't help but notice that attention is being deliberately drawn away from the bilker and the conditions that enabled them. Am I supposed to believe that the debtor put the paperwork in front of himself and scammed himself in a vacuum?
I don’t see the scam. I read the papers. I saw the penalty provisions that applied if I missed payments. I knew that the interest rates could rise. How is it a scam for the government to borrow at 14% and lend to me at 9%?
I joined the Army because it allowed student loan interest to be suspended during the first 4 years of service. I paid of the debt in those four years and essentially used the bank’s money for free. Let’s face it, Chris was plenty smart and got himself into a jam by refusing to make adult choices and sacrifices because he figured someone would bail him out.
I think the reality is the exact opposite of what you said. Chris, sitting there in 1981 (40 years ago damn near!) did not plan to purposely get himself "into a jam" and "figure someone would bail him out".
Yes, but older Chris made interest only payments for decades. Older Chris could have made more than minumum payments, but he made the choice not to. Older Chris purposely defaulted. That Chris should live with his life choices.
Once the debt had those crazy default amounts tacked on to it, and at 9%, probably interest only was its own big amount. I don't think Chris should be living with the decisions of predatory lenders.
I agree in 1981 Chris wasn’t figuring that “Someone would bail him out”. However at some point he made a decision that he had bigger fish to fry than the student debt and he “made some mistakes”. I’m about Chris’s age and have had friends make those same decisions. Not to be a hardass but decisions do have consequences. How about a timeline with #s about this debt? How many years did he make no payments? How many years did he make minimal payments. Without that it’s hard to be sympathetic.
I bet that there is a whole generation of student borrowers who have had these things since the 80s, and that is the first group who should get cancellations. No way have they paid less than the actual value of that degree.
How many MILLIONS of dollars did the taxpayer shell out for your time in the military? AND...the taxpayer, even further, helped you bail out your loans too? And you're wagging your finger at this guy, who paid A HUNDRED THOUSAND DOLLARS more than he borrowed? Nice. Who, between you, actually got bailed out by the taxpayer? SMH
Hey man, take a Paxil and calm down. I paid income taxes just like everyone else and exchanged my labor for my earnings. No one gave me anything
I'd say the US taxpayer gave you just about everything, yet you here are wagging your finger at a guy who repaid more than 200% of what he borrowed, yet owes 300% more than he borrowed.
The military sued the Department of Education multiple times. However, average civilians couldn't afford an attorney, let alone find an attorney willing to take their case.
You agreed to kill people or be killed by other people in order to pay off your student loan. Now you might not have actually had to do that, but in the end that is what the agreement was for.
Not sure where you’re going with this comment. If you’re thinking I was incapable of paying off my student loans absent joining the Army, you’re wrong. If you’re thinking the interest-free deal was only for serving in the military, you’re likewise wrong. You could also get the deal to suspend four years of interest in exchange for other public service including working as a public school teacher and service in the peace corps.
No you made a deal. That deal was I'm joining this organization and it's job is to kill people so I get a better deal on my student loan. Whether or not you were capable of paying them off any other way is not the point of my comment.
Loan providers are massively profiting, and tens of millions of students are being profited from, on the basis of increasingly expensive diplomas of increasingly questionable value. You made the best of the deal you received, but many students aren't smart enough, careful enough, or fortunate enough to escape their debts.
What's more, a continuous stream of unaware students has been 100% guaranteed. You ask below "where was the gun at your head making you borrow?" How many schoolkids think that if you have a B-average or higher in high school, your only option is to go to college? How many of those have a teacher or parent who will tell them otherwise? (Is it their fault if they don't find out there are other options until it's too late?) Society is the most persuasive gun there is.
True, the college line is now pushed obsessively. The trades are sneered at, even though it's a better path to financial success. I get that it's not for everyone, but it's being almost completely ignored by school counselors.
For that Chris guy, he's better off changing identities, working under the table, then hit Medicare when he needs it. There's no solution otherwise unless he hits the lotto.
The fact that these loans can't be discharged in bankruptcy is the real issue. This is where lenders aren't living with the reality of imprudent loans. Anecdotal, but I did have someone confess (or was it boasting) to me at a party that he could get a student loan but he wasn't in school at all. Deferred for years. He's probably not laughing now, but holy shit, why would lenders not ask for current enrollment, GPA, etc to prove they were an actual student who was succeeding?? Those lenders need to face the pain of failure too.
For other students stuck in the debt trap, if they could balance xfer from credit cards to the loan, then try and go 2 years of minimum payments, they could then legit go thru bankruptcy and get that discharged. Yeah, I know that won't work for every case, but potentially can get one out from under that rock.
It's a scam, because by the early 1980s, the colleges all knew the loan money was out there, so they simply raised the price of the product to match the financing that was available. The same "choice" was not put the 60s generation. The 70s kids got 7% loans when inflation was 12%, 0% during college. (So loan value inflated 1/3 away while sitting in class for four years.)
This happened in the 1960’s with the Johnson administration that got legislation passed in which the federal government began guaranteeing student loans provided by banks and non-profit lenders. So, instead of states using taxes to fund their public universities before the 1960’s, federal tax dollars were used to guarantee student loans for public or private universities. This is the genesis of the massive tuition spike
Johnson also said Student loans were not to be a source of revenue for the federal govt.
It is not just this though. In concert with local and state governments, there was conscious effort to redistribute education monies (especially in higher education) and reroute it into other areas of the budget.
This did two things.
First, it changed the culture inside the university. It set off a new more intense wave of pay to play, vita arms race quasi-privatizations within higher education for professors to justify their existence via grantsmanship. The critiques of capitalism (largely in universities in the 70's and 80's) got boxed in as new hires had a different attitude about scholarship, publishing and the business world. Scholars were steered towards a neoliberal version of their jobs and many drank it in/accepted/invited/imbibed it as rigor, justifying how smart they were and well accomplished they were. It was CV padding and corporate glad-handing. The professors who played the game got more grant money, solidifying tenure and personal prestige.
Second, it pushed the universities in the direction to increase tuition or lose market share. The political community all over the country in local and national ways were trying to sell "entrepreneurship", "cost-cutting", "pay for yourself/unit/department" initiatives that resembled pre-NAFTA corporate America. By starving the university of its stream of public resources, it pushed the university to corporate sphere --- where raising prices on fixed commodity seemed not only smart but a necessity.
Of course they disregarded that the marketplace did not differentiate between a Harvard Law Degree in 1970 (10K) versus 2020 (65K). Why does one generation get a better deal in cost, plus the GI Bill and another does not? That's capital working. Win Win for them every time. Win Lose for their partners.
And where was the gun at your head making you borrow?
You seem to miss the point. For someone going to college, the price now included the loan note.
I agree it’s hard to muster up as much sympathy for Chris. He went to law school, but got disinterested after he had gotten the education and incurred the debt. I didn’t have the luxury of getting disinterested in my work when I had bills to pay.
However, I’m aware that the student loan program has been much abused by colleges. My sister was teaching at a for-profit school that was recruiting homeless people to take online classes using a cellphone. They were signing them up for loans. Those loans will never be repaid and the college raked in lots of money by saddling a bunch of clueless and desperate homeless people with unplayable loans.
The system stinks, regardless of whether you have much sympathy for Chris. It needs some market regulation where the colleges and the lenders have some skin in the game. Right now, the borrower and the government are the suckers.
He’s pushing 60, having spent the last 18 years in service-industry jobs, with garnished wages. He is in an economically hopeless situation, and his youth is gone. He’s paid the banks about $200000.
Dig deeper and find the sympathy.
I am sympathetic, but he made the decision to quit being an attorney because he became disinterested. That decision was the pivot point that changed the trajectory of his student loan situation. Tax payers cannot start being held responsible for paying off large sums of money because someone became disinterested in their job.
We can't allow our economy to be that rigid. People need to be able to switch careers- maybe he should have a penalty but not that much. The economy is hurt from him not spending the extra 25% of his income.
I disagree, but appreciate your take.
One can be sympathetic AND practical. It is a profound mistake for society to encourage scofflaws to welch on their obligations simply because the whimsical life of the grasshopper appeals to them more than the earnest and responsible life of the ant.
Of course this also doesn't address all of those kids who opted for military service to pay for their school. Do we just send them a check for the debt they could have incurred if they wouldn't have opted to put their life on the line to avoid crushing debt?
Truth.
I'd hate to have this logic applied to people who receive the low-cost (subsidized) Medicare coverage, getting denials once its found out that they smoked or ate a bunch of processed food, and that's why they're sick. "C'mon! You should have been MORE RESPONSIBELLLLLLLLL!" At some point, to be responsible means you take the entire circumstances that create a situation, when you judge the situation. It sounds like you are just considering the debt as if it were for a consumption item, not that it became part-and-parcel of the tuition cost by the early 1980s. If people wanted to go to college, the college produced the loan note. I don't think it would go over, that if you smoke or let your HbA1C go over 7, then you don't get any Medicare.
Wait a second...the Federal student loan rate for 2020-2021 is 2.75%. Think about that. 2.75% for an unsecured loan to a person without a job who doesn’t have to even pay interest until he graduates. Thats about the same rate for a 30 year fully secured mortgage on a house with 20% equity as collateral to income qualified borrowers who have to make their first payment in 30 days.
You want to talk subsidy? Go into a bank, tell them you are unemployed, won’t start working for 4 years and have no assets and want to borrow $100,000. After they stop laughing at you, they may give you a loan at 12% or more. And Tim will have a maturity rate far shorter than a student loan.
You’re not happy enough with this HUGE subsidy. Who said it’s as a consumption item? It’s a capital investment and like a house, you have to pay the bill.
But the subsidy is some flimflam job? Someone tricked you into it? They give you a below interest rate on advantageous terms and you complain that’s not enough?
More, more, more. Someone else has got to pay. Did you ever think that the attitude that makes a person view an advantageous lending deal that is already subsidized as not enough maybe the same attitude that made him fail as well?
You have ZERO knowledge of the student loan system clearly. The federal government has been book PROFITS of $50 Billion per year on this lending system since 2012. They have even been profiting on DEFAULTED loans since 2004, and probably even before. The only SUBSIDY happening here (ie people sucking money out of the government) is the servicers, collection companies, and obviously the COLLEGES...and even after they suck their ten pounds of flesh from the taxpayer, Uncle sam is STILL making money...and a LOT OF IT. You like to wag your finger at the borrowers sucked into this big-government, college lending SCAM, but all you accomplish by doing this is defending and perpetuating this lending scam, to their great benefit. Did you know that some of the government profits of this lending system are used to fund Obamacare? No of course you didn't. LOL. If and when this country actually does go socialist/communist (something I suspect you claim to fear), we'll have chest-beating, finger-wagging, up-by-your-bootstrappers LIKE YOU TO THANK!. Good job, comrade. I'll be sure to put you up for the USEFUL IDIOT MEDAL. Nice Job. Take a bow. Douche.
https://studentloanjustice.medium.com/the-conservative-case-for-cancelling-student-loans-9e085a168972
promoting your own obscure (and erroneous) bloviation truly is pathetic.
Yes, this guy seems like a real narcissistic dick. He types in caps so we can realize he really means it!
Anything SUBSTANTIAL to say? lol
Lol. Lose the argument, attack on form. Nice.
Really? Please point out even ONE error in anything I have said!
You know very well that under FCRA accounting rules, the government's "profits" on these loans do not reflect a risk-adjusted value. If government accounting rules required the same CECL charges that a bank would take, the annual losses have been - and would continue to be - substantial. FCRA also does not include any of the $30B+ administrative charges from running the origination program. I believe you know both of those things but prefer to mislead rather than inform. You are an advocate and a charlatan, not a truth teller.
I totally agree with this, except I think there needs to be a nominal payment because the Screamers and Crybabies (notice how the Koch Brothers trolls in cubicles hit these sites?) will make a bunch of noise if it's a total writeoff. I think what is fair is a surtax that brings today's federal marginal rates to about what they were in the 1970s, when college was essentially free. Fair is fair. A couple percent over $30,000 exempt, 15/20 years, five more for graduate. Cancel everything undergrad before 2001, graduate before 1996.
You missed the larger problem that the loan itself inflates the price of the tuition. Doesn't matter whether the interest is 2% or 20%. The loan itself is the problem. It's not a capital investment, it's a public service. There is no "asset" on the personal balance sheet. And in the 1970s, when the rate was 7%, US Treasury rates were north of 10%. So there should be 0% interest today to be fair.
To be “fair”? The rate now is 2.75%, or about 15% less than it would be if it were priced like any other unsecured personal loan. And it’s even probably a wider gap than that if yours could figure out how to price a personal loan that defers payment and interest accrual for four years and which, in the midst of a pandemic, the lender will not just defer payment on, but defer accrual of interest on.
Fair is zero, because the loan is based on a price that was inflated because of the presence of the loan.
The problem isn't that the subsidy isn't large enough. The problem is that there is no intelligent underwriting of the loan. Borrowers benefit when creditors with skin in the game reject loans that are unlikely to be repaid. Teenage borrowers would almost certainly benefit more than most borrowers from the intrusion of lender restraint.
While this is true, shyster politicians and shrewd bankers will denounce any restraint on lending. Their cries will resonate with the unlimited free diplomas for all dupes that equate a diploma to a golden ticket through life. Sigh.
Similar to how there is no underwriting requirement for Medicare. Anyone 65 who has 40 quarters gets it. Puff away and eat fast food and gallon size colas. No responsibility for their actions!!!!!!!! SMH.
I'm not a fan of this analogy. A lending transaction is a commercial transaction. A good loan is one that works out for both borrower and creditor. A bad loan is one that both borrower and creditor wishes had never been made. Students are not the winners when the government shovels money to them to pursue worthless degrees. That bears no resemblance to health insurance. Medical care was always going to be needed and provided. And I'm skeptical that unhealthy people that die sooner ultimately consume less health care than healthier people that die much later.
LMAO...big sale today at False Equivalencies R Us?
Hardly. It is moral equivalent. The CON side people are saying that student borrowers must be held to this ridiculous standard of personal behavior that is applied nowhere else --- and especially not to people who cost Medicare a fortune because of lifestyle choices. It is the same supposed waste of an almighty tax dollar. But fat diabetics who smoke (and wear red hats!) are their own category of precious, and Reagan put the kick me sign on the student borrowers long ago. So we continue to have this discussion (while Medicare runs up a tab more easily address than the student borrowing program . . . )
Of course you're mistaken. Student loan borrowers are held to the same standard as any other party to any other contract. You enter into a contract and agree to repay money you borrow according to the terms of the contract. You get the money, you spend the money. You can't then say, "HEY...I don't think I should have to repay this money!!!"
Grow up and start honoring the contracts you make.
No one is welching on their Medicare contract. The deal was made, people pay into it all their lives. When they're of age to start using it, PER THE TERMS OF THE CONTRACT, they start using it. No one is trying to get out of paying for the medical care of those receiving medicare.
If you want to lobby to prevent smokers or others with lifestyle choices you don't like or think are expensive, that's fine. But do it BEFORE they enter into the contract, not when the bill comes due!
No, student borrowers are held to a much higher standard than a business borrower, a consumer borrower, or even someone who goes casino gambling with tax money they should have paid the IRS. (Wait more than three years, declare bankruptcy, and tax debt gone.) They are all saying, "HEY...I don't think I should have to repay this money!!!"
These are the people who aren't "grown up" and not honoring the contracts they make. But you have no problem with those.
I happen to believe that Medicare should be available to ALL. And vices should be properly taxed. But you people seem to have a problem of trying to segment one group of taxpayers and tax money, and saying, sorry, you can't benefit from your money. As someone who hailed from Somerset County, New Jersey, (one of the highest wage AGIs in America) whose family spent decades subsidizing the Somerset County, Pennsylvanias and Somerset County, Kentuckys, I find what you're saying particularly offensive. I should be able to have my tax money go for the things I want it spent on.
There is right and wrong in what you say. Yes, the non student borrowers you mention get to wriggle out of their debts in bankruptcy, while student borrowers don’t. Then again, the non student borrowers and to have their loans under written whereas student borrowers don’t. All they have to Donis sign up for classes to get loans they aren’t otherwise qualified for at heavily subsidized rates which are deferred for 4 years without interest accrual and get further deferred without accrual during a pandemic.
But you are correct about uneven treatment of taxpayers. That’s what happens when you use the tax system for anything other than it was theoretically intended for in the first place - raising money -and not for social policy.
Surtaxes and subsidies for favored or dis favored activities create all of these anomalies you write of and are a product of the central government painting outside of its lines.
The central government has no business being involved in one size fits all, command and control social welfare policies. The states are well equipped to care for their own people, and being closer to them, can tailor policies to fit the needs and attitudes of their citizens.
Just like one state can have capital punishment where another does not, they can have or not have a rich social service framework.
There is a difference between a social contract and a legal contract. Moreover, the student loan agreement is optional, whereas Medicaremis mandatory - you can’t opt out.
Medicare is a deal sorely in need of revising and revising NOW, not just prospectively.
Did you know that the first year that Medicare insurances assessments were made against payroll, the maximum ANNUAL tax was $27.10?
And most people drawing benefits now, paid in only on the social security wage limit for most of their working lives, while people now pay in based upon their entire earned income?
Look at this...a 25 year old professional athlete making $5 million a year - whose union contract already provides for lifetime health insurance - has $150,000 paid in on his behalf? That’s the “premium” on health insurance that he’s not eligible to use for 40 years.
Medicare and Medicaid have broken the healthcare system. I had joint surgery not long ago. I went out of network, so my insurer paid me the Medicare reimbursement rate for the code the work was done. The reimbursement was $1,800 against a surgeon’s bill of $10,000.
The only person willing to do that kind of work for $1,800 works in the meat department of your local supermarket. The guy who pays full list - and the in network insurance companies who pay more then a hidden tax on each procedure to cover the cost shifting.
The Medicare system needs substantial revision. They took the income cap off the paying in side after i entered the system. They can adjust the benefit side too.
I don't engage strawmen. Perhaps your outrage is better saved for when Matt decides to publish an article on Medicare.
Until then, save your oranges, we're discussing apples
You have a bunch of people in low income states (red states) who are paying wayy less into Medicare than they get out of it, and price gouging medical professionals who are charging wayy more than what the same procedures or advice, guidance, prescriptions, cost in other countries. My point is that people seem to get all bent out of shape about student loan tax dollars, and yet there is much more waste and moral hazard, and forced subsidies, in the Medicare system. This isn't whether it's "paid as agreed", it's where the system is set up to provide these overly generous subsidies to places and people who can't afford it, and then we are all supposed to get upset about things involving student loan reform. Don't even get me started about military waste.
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.
I just paid off all my student loans this year, and I’d be fine with paying off others. I paid because I’m lucky enough to have a well-paying job.
But the real answer is just to let people default. The banks got a sweet deal for awhile. Good enough.
It's not luck that you can pay while "Chris" can't. You have to have the right incentives in place. We have s bullshit American dream of college where it's supposedly sensible to go 50k into debt to get a degree in philosophy from "selective private institutions", "the Harvard of your local subregion". Study engineering and you'll have a job, period. Hell, study plumbing at your local vocational and you'll be making WAY more than this Chris dude
Totally. HVAC pays well too.
The trades can really pay if a person is smart, honest and shows up on time and works.
Trade programs in high schools were cut throughout in the late 80s and haven't really recovered. Some areas have pretty awesome tech schools, but mostly, the public high schools really pushed everyone to get a 4yr degree. Those markets are flooded or have been outsourced and there is a huge need for skilled trade work. (That is, so long as the building and home market keeps out of the shitter,)
Have you tried to get into a trade lately? Most all require a two year "certificate" or associate's degree just to get into the apprentice program. And where do you get those? Your local community college. Don't forget to ask for your loan because night classes pretty much don't happen anymore, so you have to quit your day job to attend.
I'm in the trades. 40 years worth. The AD's and apprentice programs are just another form of uselessness. We, and everyone I know, train our labor, pay them well, and we do all right. If you want to get into the trades, choose one, and find someone to hire you. You'll learn soon enough.
I went from apprentice boy to master plumber so I don’t agree that apprenticeships aren’t worthwhile. I never put too much stock in community college trade “degrees” though.
That's not what every high school student is told. Guess you can't get in a trade unless you have the right connections.
We have many members in our group with 6-figure student loan debt due to trade schools.
About 15 years ago, the New York Times had a long expose on worthless culinary schools. I think there were a couple of exposes like this on certain trade schools AHA I found one of them: https://www.nytimes.com/2010/03/14/business/14schools.html
I remember those articles. They were pretty good. Of course there are worthless trade schools, and the point is...(?). A traditional liberal arts education is an incredibly valuable experience, but you certainly don’t need to go to an elite university, or any university, to get it. Similarly, you don’t have to go to a trade school to learn a trade. It’s all out there; all you have to do is pursue it.
I remember that piee well! Nearly all the borrowers interviewed were members of our group, StudentLoanJustice.Org :-)
Well, no one is claiming “trade schools” are a monolithic entity and are uniformly wonderful. Some of the Kaplan “trade” schools are criminally idiotic. I’m aware of others with similarly worthless offerings. The entire idea of a trade school is a little silly, as a trade is something that is learned by doing, and it’s best learned on actual sites. With the current critical labor shortage, you can talk your way into a job. If the employer turns out to be a dick, find another. If you’re working with a plan, you can go out on your own in a few years. Trade work is so completely opaque to most Americans, they don’t even know how to think about it, let alone do it.
It started before that. Industrial Arts programs were getting axed in the 70's. In the 60's, the unions closed their own schools because they wouldn't integrate; the Feds said they had to, they said no, and shut down. It's been a 70 year gutting of trade related education.
Possibly, but it may have more to do with simple arrogance on the part of those (elite university Phd’s) establishing education policy.
I work in the HVAC industry. We can never hire enough technicians. Those guys have the golden ticket.
Driving an earth moving truck pays over $100,000 a year. My plumber retired 4 years before me and we're the same age.
It took me years to make as a lawyer what I made as a Master Plumber. But the trades wreck havoc on your body. I made the choice to go to school and got the benefit of working indoors even when I was earning less cash.
I’ve counseled some kids to go into the trades and some into “professions.” They each have advantages and disadvantages.
I just get a bit annoyed when the middle class wants to force the working class (and many, but not all trades are middle class) to pay off their loans.
My Dad was an aeronautical engineer, masters degree etc. On a business trip he sat next to a plumber on the plane. Got to talking wages. Telling me this story, he laughed to find out the plumber made more than he did, even after a 30 yr career. A career that included being one of the head guys in the development of the cruise missile.
Ever wonder who's driving those monster luxury RV's to NASCAR races? Plumbers
It’s true. I’m telling you, it’s a wide open opportunity out here for anyone that enjoys working with tools. You can’t work remotely on a computer; you have to live in a city where there’s people with money. If you can handle that part, there’s endless work. Endless, at good pay, and control over one’s life. What’s control over your own life worth? I propose it’s worth a lot.
By the way Kurt, I called my soon to be 17 year old boy over to have him read your posts. He's a good kid and listens to me. I'm bringing him up to be one of those young guys who shows up ready to learn. Thanks
Well, they sorta wreak havoc on your body. Air nailers have hugely improved our lives. Safety glasses, knee pads, new engineered tooling...it's a whole different game than it was 40 years ago. If you're paying attention and not being stupid, they don't wreak havoc on your body, but you have to have a brain and use it.
For every electrician I know with a bum shoulder from working over his head all day, I know a lawyer with a bum shoulder from serving tennis balls. Aging sucks. It doesn't suck more or less because the wear and tear happened doing something you got paid for rather than something you liked.
As a general proposition, while working in the trades exposes you to injuries both traumatic and repetitive, working in law exposes you to fewer workplace hazards than the law. The law is usually a high stress environment—hence the unusually high substance abuse problems.
I was in far better shape when I was a plumber than when I was a lawyer.
As for sports, I had time to golf when I worked it the trades, it the law, not so much.
crawl spaces will always be crawl spaces. Stuck fittings will always be stuck.
You’re doing a splendid job of having no vision, and displaying how little you know of the subject I’m addressing. We’re doing a job now retrofitting a crawl space with vapor barriers and foam insulation. When it’s done, it will be a bone dry energy efficient storage space. The client is thrilled; what was once wet and cold is now warm and dry. The work is hard. So what? Stuck fittings will NOT always be stuck. Our job is to unstick/fix/replace them. There’s good money in fixing stuck fittings. Of course, trade work is now (as your comment implies) a cultural and caste issue, and if that bothers you, then I advise you hire us so you won’t have to disfigure your manicure.
F.U. Try breathing asbestos. (It’s still out there and it still caused mesothelioma—that’s not dose-related like asbestosis. And breathe in the solvents. Avoid when your buddy fails to do his job and the forklift runs over you. Or a belt snaps. Or some asshole overrides built-in safeties on the punch press.
Your propane torch malfunctions and burns you. Etc. Etc Etc. All the modern conveniences don’t prevent the mistakes that take a day in and day out toll on the human body. So maybe the contractor you work for is just swell & yes, I left the trades some time back, but then I saw the injuries through the litigator’s lens.
I don't work for a contractor. I am the contractor. We wear respirators, safety glasses, knee pads, fall protection, when we see asbestos pre-proposal we write in and have it abated, we don't have a forklift, never had a belt snap, don't have a punch press, never been burned by our propane torches (we have several), etc., etc., etc. You sound like the guy we don't hire because you can't figure out how to not hurt yourself or people around you. Don't project your inadequacies onto situations you don't understand.
I love this thread. Buddy of mine in his early 40s used to work in finance in NYC. Hated everything about it, especially the assholes he worked with. Finally quit, got a job as a golf caddy, and got his welding certificate. He's never been happier. Looking forward to making $180K after apprenticing and additional certification. Agree with everyone saying the idea we all have to get a 4-yr liberal arts or STEM degree is almost criminal. Another story. I used to work at a shit-hot internet/web agency. One of the summer interns got himself hired as a project manager. Took a leave of absence from school. I was like, dude, save yourself a ton of trouble and do NOT go back to school, you've already made it. I left the company so don't know if he went back. I hope not!
Plumbing isn't really where you want to be; it's a rough gig and it's changed radically, and you're working with some of the most toxic adhesives and materials known to humankind. Service work is in huge demand, i.e., individuals that can walk into a situation and fix it. Simple home repair businesses are kicking ass. I know home repairmen making $125k a year, and they take a couple months off a year.
I worked with lead pots and asbestos oakum through the early 80s. Then the solvents came in. Of course we had jobs in steel mills, paper mills, foam plants, electro-plating plants and some good ol’fashion chemical plants and oil refineries. So even if the shit you were using didn’t give you cancer, where you were working might.
Don’t get me wrong though, it was good pay for an honest day’s work and I was never happier. Law School was fun, but being a lawyer got boring.
Life is full of trade-offs.
If that would end further loans, yes.
But you know it won’t. So suck it up fools and deal with your debt.
Really? Chris should really "suck it up"? How, exactly would you suggest he do that?
Who cares. It's his problem.
If you don't care, than why are you even here speaking?
I’ll send you my nephew’s Venmo and you can put your money where your mouth is. Very generous of you. Thanks.
The current level of student debt in the US is slightly more than $1.7 trillion. Our government used your taxes, according to your viewpoint, to pay almost double that amount this year to bail out banks and corporations that were too busy playing the stock-market casino to have enough on hand to cover their short-term loans. So, I say we just tell them to cancel all that student debt and we'll call it even.
Of course, not a dollar of "taxpayer money" went for those bailouts, but that's a discussion for another time, because it's too late in the day to deal with the myth the US government runs on tax revenues.
Think you need to read about the CARES act. The "bailouts" are not what you apparently think they are. https://en.wikipedia.org/wiki/CARES_Act
And you're apparently unaware that the Fed was bailing out the banks and corporate lenders for six months prior to the CARES Act, and also that the bulk of the bailout money in said act wasn't applied as it was supposed to be, or that the small businesses who were supposed to be helped by PPP were shoved aside by subsidiaries of major corporations.
You're paying for small businesses PPP loans. You're also paying for pandemic stimulus of $1.6 Million each for millionaires and billionaires. You should probably stop paying your taxes now if that's how you feel.
Yeah, whatever. I suggest you read about the CARES act.
Exactly my point. Every nickel of stimulus in the CARES Act added to the national debt. ALL federally owned student loans (85% of all student debt) could be cancelled without needing one dime of tax or Treasury appropriation, would add ZERO to the national debt!
Uh, no. The government is running a deficit, and you propose writing off a huge asset and the income stream it represents. This will increase the deficit, and therefore the national debt. Analogous to a business running in the red and writing off accounts receivable, putting it more in the red (in debt).
Nonsense. The national debt is the amount of money that the Treasury owes. The Treasury paid for student loans many years ago, and it paid only a small fraction of the outstanding balance. It owes NOTHING on the portfolio the government owes, and carries zero liability for future defaults. The loans could be cancelled tomorrow with zero spending required, and nothing added to the national debt. The student loan portfolio is air. At this point it would be astonishing to see the government get even $.20 on the dollar for it, and that would be through harrassing, and wrecking 44 million borrowers for the rest of their lives. The lending system is finished, and it needs to be taken to the bath, and drown in the tub. It is vanishing into a mist of illegitimacy as we speak, and won't survive the pandemic. The sooner it is erased, the quicker this nation can get back on its feet.
It sounds like he paid his own student loans, actually.
He borrowed $79K (as a dumb kid—these disastrous choices are often made by teenagers with the encouragement of every “responsible adult” they talk to), and has paid $200K to the crooks and usurers who lent him his textbook money.
If paying for others’ education sickens you, how do you feel about all of the money you’re paying for all of those useless airplanes and nukes? Education is the line you won’t cross?
$79k ($213k in today's dollars) for "textbooks"? Yes, just "milk money" for The Beaver, Ward. Everybody's a victim. The big lie that schools have used for their benefit, in one version or another is "you can't ever get enough education" or "you can't spend too much on education"? The line I won't cross is accountability. I would be very surprised if many adults (responsible or otherwise) without a vested interest (ex. college salespeople) were advising Chris to pursue a philosophy degree, with or without borrowing. Compensation for various majors is, and always has been, widely published. Chris had no evidence that a philosophy degree from Miss State offered a high likelihood of return, other than, at best "A guy I know, knows a guy who has three KFC's and he said...". But Miss State let him in (and schools will pop up like mushrooms for people of any/no ability, ad infinitum, as long as there is money, willing dupes)and it was just easier to not think about all that "payback stuff".
Agreed, and you are right, lol. I went to school w/in couple of years of Chris, and the data was clear even then, that for a law degree to pay for itself, you needed to be in the top of your class at a good school. Simple example, #1 at a low ranked school, top 10% at a better school, or just graduate from Harvard. Any responsible, informed adult with Chris' interest at heart would have shared same (I'm confident Chris was Top 10% of his class, BTW) Ask yourself, would you pay $200k+ (today's dollars) and forgo 8 years of earnings for a law degree from Syracuse? Of course not. Unless maybe you are independently wealthy and don't have to borrow, and are choosing to hide from the reality of serving others (work), then you can create this intellectual superiority fantasy for yourself. The lottery ticket that dropped on the USA post WW2 created a massive tailwind (that obviously, could not last) and with it, created oxygen for some feeble minds to continue to believe the bedtime story "you can't spend too much money on anything that calls itself 'education' ".
* correction - was not in Top 10%
Well, you've got about 365 days left of paying taxes.
Clarify, please.
I'll bet student loan forgiveness in some form or fashion is wrapped up in next years "stimulus plan".
Oh, they'll figure out a way not to screw the banksters with it. Pay off $10k and leave the usery in place, probably.
Agreed. That is almost certainly the plan.
Yeah and it's going to be largely regressive. Like most stimulus plans.
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.
" I'm guessing that many, many liberal arts degrees wouldn't be considered a very good risk."
That just feeds into the rot that has seeped into higher "education." They've become career mills, not intended to feed creative and exceptional minds that salt a culture. Merely to spit out more corporate cogs.
Education should be free and those who have an affinity for the humanities should be allowed to advance as high as their capabilities can take them.
How one answers the question What is education for? reveals a great deal about a person.
Education will be free when people like you start teaching for nothing. Until then, quit calling it free while asking other people to pay for it.
I'm not one to "proof-text" with quotes of the Founders, who were fallible men, but this is true:
>>Two of our greatest Founding Fathers, John Adams and Thomas Jefferson, were fierce political adversaries. But in the first years of our nation, these rivals — with vastly different backgrounds and disparate political views — shared common ground. They both believed in the importance of funding public education.
Rather than squabbling, Adams and Jefferson knew that public education was at the heart of democracy. “The whole people must take upon themselves the education of the whole people and be willing to bear the expenses of it,” wrote Adams. “There should not be a district of one mile square, without a school in it, not founded by a charitable individual, but maintained at the public expense of the people themselves.”
Jefferson, witness to the Revolution, drafter of the Declaration of Independence, and founder of the nation’s first public university, rightfully believed that it was the government and citizenry’s duty to invest tax dollars in public education: “[T]he tax which will be paid for this purpose [education] is not more than the thousandth part of what will be paid to kings, priests and nobles who will rise up among us if we leave the people in ignorance.”>>
https://www.stltoday.com/opinion/columnists/founding-fathers-agreed-funding-public-education-is-not-a-debate/article_f05aa5b0-2fed-5c63-be1a-1b013cf49625.html
Yes, but they were talking about real education where you learn to think critically. The indoctrination camps we have today where kids are conditioned to do as they are told, follow the advice of experts without question, and not think for themselves are not what Adams and Jefferson would have wanted.
The "indoctrination camp" narrative is completely overblown, except when it comes to the economics departments that only offer neoliberal ideas in their courses. The radical cultural ideas are coming from the students themselves and a very small minority of faculty. I went to an Ivy League (wish I hadn't now, could've gone full ride to a great state school), and the pushes to change curriculum, etc., come from below; many of the humanities profs fear for their jobs due to student complaints and react accordingly, but many have also held their ground. Privately in office hours, they would mention this to me, and I got flamed during a public presentation of my senior project for defending the teaching of Milton. Note: my classmates, not my teacher, were attacking me.
I'm not talking about what's going on at universities. I'm talking what's taught in primary schools.
Many of the Founders were also completely screwed under predatory debt to British banks, merchants, etc. Jefferson nearly went to debtor's prison. Robert Morris (who financed the revolution) DID spend time in debtor's prison. John Adams famously said "There are two ways to conquer and enslave a country. One is by the sword, the other is by DEBT". These men knew about predatory lending, and wanted to avoid it. That is why they called for "uniform bankruptcy laws" ahead of the power to raise an army and declare war. The unique violation of this for student loans proves their wisdom. In Spades.
Fair point and well argued. I could get into semantics about paying for people to act like children into their mid 20's, AKA college, but Ill concede the issue and say well done.
Besides, we were arguing about college, not educating young children, although there doesnt seem to be much difference between young children and college grads these days.
"Until then, quit calling it free while asking other people to pay for it."
We all pay for K-12, for roads, for public health departments and a common defense. The Founders of this country believed that education was a public responsibility and that an educated population is necessary for healthy democracy -- they were right.
Except there’s no learning happening - no proper history certainly not grammar basic civics or the ability to think independently -
It works as well as most public services. There is a saying in my family when we have bad meals but need to eat them: "It'll make a turd." That is pretty much the rationale behind public goods. It fills this void in these people's hearts. They feel as if they are doing good because they support the idea of providing the service, not because the service or good provides value.
Schools is more about cultural and social indoctrination more than anything else. The amount of education dispensed is just enough to fill your post in life and nothing more. The amount of propaganda dispensed is massive.
Maybe they said that, but they didnt issue federal taxes to pay for it, so your point is moot.
My point is not "moot," unless and until you show that they were wrong.
It is though. The state provides "free" education already, its your contention that its just not enough "free" education. So the founders dont have to be wrong for you to also be wrong.
With you "somebody pays for it!" types, do we ever get to use our tax money to support free (without direct charge) public education? Could you tell me when we finally get to use our tax money for the things we want, and not for those that you want?
Sure, its already happening. I mean, the public schools are a joke, but they are "free". This article pertains to college.
With you "service should be free!" types, is there any end to the number of things you dont want to be free? Education, healthcare, food, housing, cell phone service, internet service. Rights acquisition in the new religion.
Are you not spending enough tax payer money on poorly implemented public goods already? Is taking 50% of every last dollar someone earns not enough? Should 1% of the population pay for the subsistence of the remaining 99% because "they can"?
I dunno. The early Republican Party of Lincoln's day believed that college should be "free", and so they passed the Land Grant Act. They did it without the hysterics of going, "and then if we do THIS, then they'll want THAT and THAT and THAT!!!" The Republican Party of Eisenhower had a top marginal tax rate of 90%. Most people in those days could look at $500 billion dollars and wonder how anyone's human effort actually "earned" $500 billion dollars. They knew, from the robber baron days, that these vast sums were extorted out of the general workforce through unfair bargaining positions. Somehow, people have gone astray from the good ol' values, though.
"They knew" Please. Marginal rates are irrelevant if no one pays them. When the income tax was first created in 1913, 1% of the population paid it. No one paid the 90% rate. But your ilk has continued the slow march toward collectivist tyranny. "MORE!" Is your chant. You're the greediest bunch in the union.
You're so typical it hurts.
"advancement as far as their capabilities allow" and someone else will pay for it from the unlimited resources that spring forth from the ground. In that magical world, universities will generate endless number of "levels of advancement" (think Scientology) as long as there is someone to purchase the newly minted merit badges.
I'm quite happy with what my comments say about me, and suggest that your comments also say a lot about you.
You think other people should foot the bill for your education because you "salt the culture"? Ugh, liberal arts types are always so full of themselves.
If you just want a hobby, develop it on your own dime.
Colleges / Universities are bloated with admin and giving them a blank check absolutely guarantees they would always ask and get top dollar because "oh won't someone please think of the children!" fallacy. It's advocating that they would be permanently dependent on the gov't handouts and bailouts and so forth. Which would absolutely blow up open any hope of a balanced budget.
Furthermore, college is a waste of time. Liberal arts should not require a 4 year commitment. What's stopping someone from reading books about history, music, philosophy, arts on their own time without dedicating their time in a classroom setting?
Even business degrees are worthless...why do I need to allocate 4 years, 2 of which are prerequisites on crap I don't care about, why can't I go straight into learning finance and Excel. Spend a couple of years and move on with my life. No, instead I have to spend $3,000 on a literature class and be forced to read "Catcher in the Rye" for the 10,000th time.
College is outdated, takes up too much time, doesn't teach squat (unless it's STEM) and is prohibitively expensive. As an ROI...oh boy...I'm better off blowing all my money on a gold-digger party girl.
You are getting at the real "system", which is federal involvement has allowed colleges to spend with abandon and what they have built is unsustainable. If lenders were at risk, they would lend for degrees that pay, thereby steering students into those degrees. The endowment answer would only work with a very small number of schools, as most have small endowments relative to their operating costs. Is it really any surprise that 18 year olds will pursue philosophy degrees (like Chris) if someone gives them the money to pay for it?
All college could be financed by income share agreements, like all the software academies are doing now. Then they REALLY make sure only the right people get in!
sorry an idea like this seems absurd to you. Makes a lot more sense to me than our current system
Of course you would crash the "higher" education scam in this country.
Brilliant!! Some things are just so simple. You should work in gov't.
The majority of college DO NOT have endowments that could underwrite tuition...guessing you are a IVY League-er that doesn't have a clue. Under your two step solution, nobody goes to college and the feds get to underwrite more food stamps.
Absolutely! Every time I make these two points I make both liberals and conservatives both mad. And you see how, point 1 would anger conservatives who would go onto the moral hazard argument, point 2 would anger liberals because they would argue that college should be free!
Government needs to be out of the system. I can't believe anyone was smart enough to actually have planned this out, but student loans have become the financial driver behind the indoctrination process on campuses. It's funded all of the non academic staffing that create/support the new social norms that the students are taught. The Dems will never allow the feds to sever ties with the process as it's their greatest source of recruitment to progressive policies, identity politics and political correctness. It's where cancel culture and ANTIFA started, and which party promotes and/or benefits from both?
Totally agree. That's what this petition is calling for: Change.Org/CancelStudentLoans
It’s outrageous! Student loans cannot be discharged in bankruptcy! Thank the president elect.
Joe Biden, as senator, represented Delaware, a state that has what would have been called, 100 years ago, a usury industry. What Delaware does for business is criminal in certain countries.
The “Senator from MBNA” as I recall.
Why thank him ? Sleepy Joe has never been smart enough to come up with an idea like that, he just rubber stamped yet another scheme by the rentier capitalist class to keep his job, why blame him exclusively ? How about the rest of the crew ? Funny how capitalists think up scams, lobby(bribe) the government, and always escape blame for their exploitation.
Shouldn't we be thanking the FIRE lobby as well ? The share holders who could care less as long as they get a big fat rent check ?
When you have a shit system that incentivizes exploitation of the masses for the benefit of the few, you get power trippers like sleepy Joe or the current puppet in the oval office who will wheel and deal all day long to secure that immoral and short sighted predatory behavior.
Politicians know better than anyone on earth that whoever pays the piper calls the tune.
Just like foreign policy this section of our economic policy is will not change because there's too much profit in keeping the majority fenced off and to poor to do anything about it.
These so-called legislators just move a bunch of industry written bills into law for pay. "The job practically does itself, Jack."
They get paid to dial for dollars and keep the auction going. They get perks for covering up the crime and perpetuating the facade.
Most of the powerful ones have "handles" the elite can use to keep them in line like a shock collar on a dog.
Dennis Hastert, Slick Willy Clinton, Newt Gingrich, Strom Thurmond, Larry Craig, Trump, Biden, etc, etc..... That's just a tiny sample of sex scandals and we haven't even gotten into fraud or drugs and weapons trafficking yet.
The prison industrial complex we now have merely separates the successful criminals from the unsuccessful ones.
Third paragraph- great summary!
What President- Elect? Did the Electoral College vote early this year?
Selected. Not elected!!!
President-elect Joe Biden. There is no other President-elect.
Maybe take a civics course? They are free on the internet. There are copies of the Constitution on the internet as well. Calling oneself President- Elect and even making up a fake “Office of President-Elect” doesn’t make one President-Elect.
I will do you one better: go back to 1960 newspaper archives and see how many times John F Kennedy was called "President-elect Kennedy" in November 1960. The term has been used to refer to the person who has won the first Tuesday after the first Monday election. Even by people who thought drinking Clorox stops viruses.
Well, JFK stole that one. But he did it fair & square.
No he didn’t. His old man got Mayor Daley to buy it for him.
Proof?
It doesn’t matter what “people” or the media say. The President-Elect isn’t chosen until the Electoral College votes. We obviously have a contested election just like the same “people” you cite told us we would have. Until it is resolved there is no President-Elect no matter how much people wish there was one. This isn’t rocket science. It is clearly spelled out in our Constitution.
“Article II and the Twelfth Amendment seem to focus on the formal counting of votes in the Congress as the magic, formal moment of vesting in which the winning candidate is elected as ‘President,’” Amar argued. “Although the legislative history of the Twentieth Amendment suggests that the electoral college winner is ‘President elect’ the moment the eIectoral college votes are cast, and before they are counted in Congress, the text of the Amendment fails to say this explicitly.” - Yale scholar Akhil Reed Amar
Only in the warped age of Trumpism have we had to question that the guy who won the election on Nov 3 is President-Elect. Wallow in the loss of your Dear Leader all you want, puppy, but it won’t change the facts. I’d hate to see how badly you manage your own life if this is any indication of your mental processes.
Trump is toast and we all agree. But some people spent the last 4 years re-litigating 2016. Fortunately for the President-Elect, it worked.
The past four years has a history whereby the elected president is subjected to delegitimization. This has been going on my whole adult life, and has gotten much worse by the decade.
Bill Clinton was subjected to a constant assault of special investigations and an impeachment over a blow job. The government was shutdown in order to get a result that they couldn’t by the normal processes.
Obama was stonewalled by the Republican Senate and denied a Supreme Court appointment that would have been confirmed under any previous president.
Trump has been subjected to much foot-dragging, but he has also violated a lot of norms while in office. Whether his own demeanor could have been better and achieved a better result is possible, but it may not have mattered. Lots of water under that bridge by the time he arrived.
It will now get worse under Biden.
Gore v Bush. 36 days
Bingo. He is a symptom of what is wrong in the Democratic Party - not delivering about the money. Telling voters, "vote your economic interests!!!!" and then utterly failing to deliver. (Have a MyRA.)
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!!
Helluva scam.
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.
Thanks for this comment.
I paid off my loans in my thirties, but I’m completely sympathetic.
If I’d gone to my glamorous first choice for law school, I might be in a situation worse than yours. My parents pushed pretty hard for me to take out huge private loans—with their house as collateral!— because a top JD was supposedly bulletproof: a guarantee of decades of wealth.
I was like “eh...” and just went to the best school that offered me a scholarship—averting a life-changing catastrophe, in retrospect.
Good choice on law school. My parents paid my undergrad tuition (I waited tables for spending money) and then I was on my own.
I took out loans for law school, but rather than stay in the city I loved and borrow a large fortune, I moved cross country to attend a cheap school, worked multiple jobs during school to minimize my debt, and even with a modest clerkship salary I made double/triple payments to pay it off as quickly as possible. I like to think I did it the "right" way.
I'm also living the flip side. I was engaged to be married by the time I learned my spouse's "some student loans" was a six figure balance on which she pays zero under the income based repayment program. She managed to get two Ivy League degrees in useless disciplines and parlay it into nothing career-wise. It's a nightmare.
This sucks. What would be a reasonable solution? Student loan forgiveness for anyone like you who's paid way more than your principal?
I paid off all of my student loans. I think it's absolutely fair to cancel the remaining debt for those who have already repaid principal+. Where you draw that line is sensitive, but when you end up repaying the principal amount over and then some, with the principal still outstanding, it's clear you've been entrapped by usury.
Further - I would continue to pay the interest IF they would stop accruing at 8.25% (which is 3% lower than before my one time consolidation). I would (begrudgingly) pay the original interest refinanced at the current rate. Mortgage, car loans, credit cards all consumer (and commercial debt) can be refinanced.
Who would continue to pay a loan (even on IBR plan) where the minimum payment is 10-15% of monthly “discretionary income” (basically everything after taxes) and the interest is 8.25%
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?
turning 79k into over 200k is a LOT of ignoring your responsibilities. Can't blame this on Regan raising the rates 2%
Veterinarian? There is a perennial shortage of those. It sounds like you missed out on the $75,000 grants that the federal government provides to help ease the shortage. In fact, without federal support, the entire profession would probably go in the tank.
Similar situation here. Lotta sacrifices made in the prime of my life to get out from under the debt. Peers in my group want my results handed to them.
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.
Bingo. Several generations of kids were told that college was the only gateway to success. Some of those kids got in while college was relatively cheap; some didn't. But most kids who could attend found a way to do it, even if they had to incur massive debt to do it.
And why not? Long-term costs are easily disguised. Most college-age teenagers are easily taken advantage of. And college really was important—still is important—to reaching certain positions in society. Depending on your upbringing, the idea of becoming an electrician might never have a chance of entering your mind.
Why would it, if your teachers all actively despise "the working class" or "blue collar Joes".
It's as much a cultural thing as it is a we'll take the cost of three cheeseburgers next week for the cheeseburger today Wimpy School of Economics method.
When we moved recently, we left a high school district that was too small to offer much, but they did point proudly to the fact they sent 75%+ on to college. That was their only metric for success. The largely liberal douchebags living there (W. Washington state- it's full of them) blindly applauded it, all the while paying enormous sums to the tradesmen.
It's absolutely a cultural and caste mentality.
One of the biggest misleading ads when I was college age was "college graduates make a million more dollars over the course of their career". What they left out was that by taking on debt, you are delaying investment for retirement, which eats through that "earnings advantage".
I got a 4 year degree in finance, but it was largely a waste. I quit finance 2 years in and started at the absolute bottom in a tech company. The knowledge I needed to work at that tech company was probably encompassed within 2 or 3 semesters. Thankfully I did not go into massive debt, but I could still see the waste of paying for 3 years of college that I didn't need, and also forgoing 3 years of earnings very early in my life.
Great point. I'm not saying that on average there is NO financial value in a college education, but that "million dollars more" nonsense is a cheap, cheap correlation. For example, you could take a large sample poll, and I guarantee that you will find that among respondents, those who took sailing lessons, or polo lessons probably earned $3 million more over their lifetimes than those who didn't. Did the one cause the other? Should we all rush to put our kids in sailing school? LOL
Finally, someone acknowledged the elephant in the phone-booth. (For those of you who don’t know what a phone-booth is, demand your money back from the school(s) you attended)
I am a couple of years older than “Chris”. I took out student loans and wasted most of my money partying as opposed to studying. After three years I dropped out and took a pretty low paying warehouse job, then I almost broke my back and paid off my loan, interest free, because it was 2 days before my six month anniversary from dropping out.
Chris fell for the higher ed scam as I did, but in a way, being irresponsible during my school days put me in a position that stopped the bleeding that Chris is still experiencing.
This is the real problem. That said it seems unjust that there's this big industry of making money off mistakes people made as teenagers. Student debt should finance positive roi investments not shackle people to bad decisions. If bankruptcy was allowed maybe lenders would be more selective. I don't know the history of why it's not
In one word: Biden. It got Bidened - but a lot of young people voted for him anyway.
The way things went for me I wish I had learned carpentry and started an all girl construction company. I would have felt better about my work and contributing something to society
I know a couple women running an all woman home repair business. They're kicking serious ass and making good bank. Find a company and work for a while. If you're paying attention and enjoy the work, you'll make it just fine.
I agree with what you're saying aside from one thing - that it's the democrats alone doing this. I grew up in a largely conservative community and ALL of the parents were encouraging college as the next step...it was expected and encouraged. So that push came from all across the ideological spectrum.
I do completely agree that there are other valuable options than just college and they should be explored depending on life goals, career goals, common sense, etc.
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.
I can tell you, in hindsight I see that financial aid offices back in the 80s/early 90s took advantage of students. Back then Mommy and Daddy didn’t usher you around, touring colleges starting in 10th grade. No one was hiring consultants and extorting recommendations from alumnae to get a seat at the table. At the state school I went to it was mostly kids who really wanted to go to school (or went for the “free” grant money). These were not wealthy young people. And at 18 or 19 years old were def not financial geniuses. When you assume financial aid advisors are on your side and they are there to help you make that dream happen - all you have to do is sign. I remember like it was yesterday “You don’t need to think about money now just focus on your education.”
Financial aid advisors are college marketers, now. They are responsible for loaning up the students to keep the money flowing to their bosses. Those kids are not in any condition to be able to make an informed decision about the lifetime financial obligations they are incurring. It’s loan sharking.
" I’m sure much of this was disclosed to him when he signed the paperwork."
This is a huge assumption. My financial aid office assumed I knew it all. There was was no financial aid guidance counselor. There was no party in the process incentivized to explain things and look out in my best interest interest. Every actor had something to gain by having me sign the dotted line.
I'm not looking for sympathy, I've been successful enough to pay off my loans after graduating into a recession and having to work outside my field of interest to pay the bills. That said, it's the first experience many young adults have with debt and financial legalese. It's absurd to allow such predatory practice.
My experiences came in the mid 2000s (bachelor degree) and again in 2011(masters). Thankfully I was more knowledgeable about the this stuff the second time around. Don't think that there is anybody explaining this stuff, or looking out for naive 18 year olds. It's a rotten system, and it's all predicated on the idea that education is a good thing for individuals and society, not just economics.
I agree it’s a rotten system. It follows in the footsteps of all the other financial scams, from indentured servitude and sharecropping to street loan sharking.
I didn’t have to take out loans as a young student in the 1970’s. I went to a decently funded state college and lived at home. The campus was efficiently run and we didn’t complain about the lack of amenities.
My parents also schooled us about the cost of debt. We understood compound interest and how loans can be used to harm people. I signed up to run a paper route, and found out about one-sided contracts, and how hard it is to get out of one and not lose your shirt. Not a lot of friends out there.
Government can’t fix all,the predatory lending, but it can at least not actively enable it like it does in the student loan program.
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
The essential and obvious issue here is not that Chris wrecked himself before he checked himself.
It is the fact that politicians only care about the average lenders, and then only so far as to pay them lip service. Then, re-elected, they go right on introducing bills written by the crooked lenders' lawyers that specify application of sand before ramming it in.
Feint left, swing right. Over and over.
This type of product is harmful in so many ways and anyone who isn't directly benefitting from it is being porked.
When should that stop?
Never?
No, “The essential and obvious issue here” is that government should cease backstopping student debt.
Fuck “the average lender” bullshit. All lending has this issue: autos, houses, vacations, etc. shut the funds off. Period. Let these debtors sink. Don’t ask the rest of us to pay off their stupidity.
The rest of who, exactly?
They sure aren't collecting taxes enough to cover the 27.3 trillion dollar national debt... so really, in a monetary system based on imaginary lending/paying does anyone really pay?
Are you afraid of a line item on your tax records that says "Some dumbass's mistake"?
You might consider going to nursing homes and berating people who smoked cigarettes and are costing you all of that money for oxygen and breathing treatments. Or, do you not shill for big tobacco as well?
still waiting for the line item on my taxes where I willingly donate to the Pentagon slush fund. don't seem to have much choice in this matter
There's this thing called "scarcity." And this thing called "tradeoffs." See, we can't afford to give everyone everything they want, because we do not have unlimited resources. So would we rather give poor kids orthodontic treatments, better housing, food, a good education, and so on, or forgive student loans for people who can afford to repay them? Money does not fall from the sky. The national debt is not imaginary; it's a bunch of bonds that people paid money to buy and that need to be repaid, with interest. Taxes are not imaginary; you trade off paying taxes and not going to jail against the new car you could have bought if you didn't pay taxes.
You must be one of those SW Missouri grads. Federal tax dollars backstop this shit. Kinda like Fannie and Freddie fueled the mortgage disaster 15 years ago.
The government will pay their debt ... that's "We the People" who already paid off our own college debt.
What is it about people like you who hate average people in trouble, and want to protect the wealthiest? I went to school in the 60s and 70s and the interest on my loans were much lower because cost was much lower than mentioned in the article and I got a "useless" degree. They were easy to pay off.
Your idea is you should only be permitted to get a degree if it is engineering? Not in any of the humanities?
I'm average people! Humanities? You can get a great job with a humanities degree, Welfare intake, Chicano Studies. Man! That's the future.
If “humanities” degrees offered any value to anyone these graduates would be able to pay off their loans would they not?
Agree on first part, disagree on the cratering part. There’s gotta be a better way than cratering.
Then just crater the colleges scam and the income of leftist profs
OK, fine with me.
They have jobs and do get paid. And not just idiot profs who can’t do real work. There are scores of administrators in diversity, etc programs who Hoover up those tuition dollars. Don’t be a simpleton b
Honey, you don't know who's hurting you!
Just because they aren't getting paid a lot doesn't mean they aren't getting paid too much 😁
This is true; it’s a lousy job, but I get his point. I live in prestige university community (Evanston, IL), and the profs are amazingly dense. I wouldn’t mind cratering them, regardless of their income level.
“ Do you consider business, engineering or law colleges at state universities to be "hard left"?”
Yes, but beside the point. Have you checked out the “diversity” and “anti-racist” agendas at those programs? And tuition funds far more than just your major. The administrative bullshit sucks up funds.
Cut out all govt backed lending. That will solve a lot of problems.
Wait until Mike Lee‘s newest bill passes, then our country will be invaded by more green-card, lower wage accepting workers. Wages continue to sink, and eventually some really bright politicians will demand a $20.00 an hour minimum wage; as they pass another salary increase for themselves and their fawning bureaucrat slaves.
The reason the economy was booming before Covid is $15 minimum wage. Period. Puts money in the pockets of people who will spend it gleefully. For the workers, it's still not a living wage in most cities, but worth getting out of bed for. The reason this obvious truth is totally untouchable is that the political/media class is beholden to / are corporations that would prefer to have workers who are paid nothing at all. See: interns, Bangladeshi 9-year-olds, "illegal immigrants" (ie, migrant workers), etc. Matt is the perfect person to investigate and write about this.
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.
However, there is one good thing that came from this article - I started thinking about the fine line between financial stability and distress, and decided to give my friend a gift vs. a loan and tripled her request. My wife thinks I made the right call, so there is that.
There is such a thing as kindness.
A lot of mill owners way back in the day would forgive debts if they knew the family was bad off. Just as an act of kindness.
They really felt responsible for their communities' well-being. If they did well, they helped others do well. But, that was in the pioneer days.
Too big to fail bank-gangsters were helped -- out of kindness?
And I don’t feel like paying for public schools and state indoctrination mills. I don’t want to pay salaries for politicians who do nothing but fight to hold their seat year after decade. I don’t want to pay for “rich” people’s tax loopholes. Why should I - if you sent ur kids to public school or if they’re getting financial aid or if you got financial aid/grant you I say we call it even
Or 18 years of constant war. Or drone striking US citizens suspected of crimes without due process. I could go on and on.
This Burningman asshat seems like a plant trolling the site.
Agree entirely.
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.
You might also gently remind the students (and, just as crucially, their parents) that there's no compelling reason for an academic education to work like a sluice, with high school graduation at age 17 leading directly into entering college at age 18 or 19, and graduation at age 22. If you decline to immediately march off to college three months later, no truant officer will knock on the door. No college admissions office will inform you that you've blown your shot.
The path of going directly from secondary school to college to grad school, graduating in the early to mid-20s, settling on a white collar career with a middle class salary, benefits, and the prospect of climbing the ladder is linked to the same set of traditional social norms that prescribed marriage by age 25, and children within two or three years after that. That's a valid path, but it's outdated. The reality of modern society and economics is much more flexible, and there can be marked advantages to adding a few extra years of latitude into that model. At minimum.
For example, consider the relatively conventional alternative of a recent high school graduate remaining as a resident in the parental household while entering into the world of work at entry-level wages (which are now approaching a reasonable level in most parts of the country) for three or four years- perhaps also obtaining a few college credits at the local community college. That has all sorts of inherent benefits. It allows the young person in question with an initiation into the realm of the steady job and the working week, as an employee for an hourly wage job- that's an education in itself. (Personal digression: having done f*d up a bit at both school and work between ages 18 and 21, one of the first decisions I made to correct my course was to set a goal of working for a minimum of one year at the same job without getting fired.) And along with a range of material support advantages for both the young person and the household (including dependent health insurance coverage) continuing to live at home provides them with the ability to stash most of their paycheck. Four or five years of saving most of a weekly paycheck, and all sorts of vistas open up for a 22-year-old. With $50-$80,000 at hand- money that one has earned from their own efforts, at that- the prospect of being able to afford all of the expense of two years of upper level university education without a loan burden is only one of them. $5000-$10000 of that money can buy most anyone a fantastic six months in Asia or Europe. After this covid thing is over, of course.
(Just don't squander it. I advise people to stay away from even one use of hard dope, but then I'm a square, and a semi-hypocrite. If you want money to party on, tack on an extra two years of work savings to this advice, and before you go off on your little spree, lock half of that money in an account that you can't touch without jumping a few onerous/expensive hoops. I realize that most people in their early 20s imagine that by age 30, it will be too late to enjoy the high life. Trust me, it isn't. I know people who set it aside until their kids were grown. And after that, woo-hoo.)
I would have reflexively bridled at this advice at age 17, when one year's time felt endless. (Wrong. One year ain't no time.) But as it happens, I eventually ended up returning home to live with my parents from age 22 to 25. And now we're evidently in a situation where a lot of adult children are graduating from college at age 22 and returning home to live with family until they're, like, 29. Or older. No judgement, but under most circumstances, that cannot be an easy situation for anyone to tolerate. It makes more sense to stay in the nest until age 22, mostly working and keeping a low profile, accumulating the material resources to go to college and the life skills to stick with it. And resident tuition at a good community college is usually the best bargain out there, for the first two years of college. Not only is that not a barrier to admission to a college or university, but it's often an advantage. You're a better bet to graduate than any 18-year-old freshman. As a path toward independent adulthood, that seems to be more like the natural Flow these days, to me.
That's how I'd counsel the kids and their parents, if I were teaching 12th graders. I'd also tell them to use the delay to drop by a local community college admissions department, and research every damn scholarship and free money under the sun. Year in and year out, some of that money goes unclaimed because eligible students don't know enough to apply for it. It pays to learn how to work the college game. Rushing along as if you're in a row of airborne recruits in line to get pushed out the jump door is the wrong way to do it.
Stories like Chris', which have been reported in the media for some decades when loan reform comes up, are truly compelling. And they tend to bring out the same set of screamers and crybabies who protest someone ELSE getting a toy. ("What?? MY TAX MONEY going to pay for x, y, z??") These people have no problem when literal trillions are wasted on baseless wars, and ignore the fact that most all people who pay student loans are also paying taxes. So Chris gets to pay for the military industrial complex for wars that he didn't agree to, but could not use his tax contribution to pay for his education, which is basically how the pre-Reagan era Baby Boom went to college and graduate school. Chris gets to pay interest on the national debt since then, which mostly was racked up on giveaway tax cuts to the extremely wealthy. They got the tax cut, Chris got the bill.
In fact, many of the high balance pre-seniors are also people who've paid a lifetime of income and payroll taxes. It isn't that the student loan borrowers "didn't pay". It's that, for their generation, the tax money wasn't allowed to be used for THEM, like it was for the previous generation.
("Hey, me here in my blue-collar job, I had to pay taxes too!" Well, guess what, you had less competition starting out because the Chrises of the world were sitting at a college desk, not bidding against your price for labor.)
As to a quarter-million student loan balance, though. It wasn't that Congress in the Reagan Administration took rates from 7% to 9%(!) on the way to 10% in the 1980s. It sounds like what made it a big number were automatic penalties imposed in the event of a default. These penalties bore no proportion to the actual cost to resolve the default. Usually, that was a phone call to the appropriate department and the borrower put in a percentage-of-income program, making payments for 12 months to cure the default. It doesn't cost $25,000 in penalties to make that happen.
The Department of Education has offered percentage-of-income repayment since 1994. Loans were to be cancelled starting in 2019 (25 years). I doubt there has even been one cancellation under this "ICR" scheme (income-contingent repayment). Maybe because the percent was too high, but more likely, because no one knew the option was there, because the servicers had NO incentive to let it be known. It was buried in the loan contract.
It's unlikely that President Biden is going to simply cancel all $1.6 trillion in federal student debt. It's also unlikely that this money is ever going to be "repaid" (meaning, it has already been paid in tax money that was diverted to the needless trillions in wars, the borrowing for the wealthy's tax cuts, etc.) DeVos, billionaire grifter like Trump, had Deloitte or one of the biggies do a study which showed that at current rates, $500 billion of the money will be cancelled at death. Per the loan contracts. That number is only going to go up.
The better approach to reform is to revisit Obama's "REPAYE" income-based plan, and put the contribution rate to more like 7% of income above an exemption rate like $30,000, with a full-stop cancellation at 15 or 20 years, and five more for graduate school. Any undergraduate balance from 2001 or before, and any graduate balance from 1996 (25 years ago) gets cancelled. No more goofy forbearance that wracks up the debt, or deferments with so many terms and conditions that they're useless. The hard-stop cancellation after a quarter century also makes it walk-the-walk. The Democrats have a hard time getting voters to believe their song and dance anymore about delivering for them.
Costs can be borne by restoring pre-Reagan tax rates on the very highest earners, including capital gains that they can't weasel out of by fudging basis like they used to (and how college for the richie riches got paid in the 1980s --- sell stock, lie about the gain).
Frederick--"McKinsey" (the sister brother uncle cousin of Wall Street) did the study.
Thanks very much. I am made more accurate. I just knew it's any one of those large ones that loves to take federal contracts to write a report about how we should be shocked (shocked!) that other people get federal money.
If McKinsey makes a mistake, though, they don't have to pay it back.
Better and simpler to just cancel the debt, which would also be a huge, and much-needed, and very populist stimulus to the economy.
You do realize we're staring down another Great Depression, right?
I agree that the less cumbersome solution is just to cancel the debt. And the colleges just lower their prices next year and take it out of those huge endowments. But that won't happen. Student debt is not creating "another Great Depression". But people having to pay any more than, say, 7% of discretionary income is a drag on the economy. (It's like a surtax that is just sucking up demand.) A couple percent of income towards these debts is fair, because tax rates in the 1960s and 1970s were maybe 5 to 7 percent more on the margin than today. So the people who got it free in those days, this is the tax they paid. And we make it equal by matching the overall tax rate (income plus student loan surcharge) to the Treasury.