Student debt and double standards

So ever since this interview went up on Forbes, I’ve had a couple of people dropping in here to troll – of course.

I’m used to the trolling, but I’d just like to point something out:

Student loans reflect a double standard in our society. You, person who calls me “one of the worst examples of the selfish Me Generation” and you, guy who wrote in to say that I’m a “scumbag, worst of the worst, among the people who wants to take down the United States” – you are aware, right, that everything from gambling debts to child support payments can be discharged under bankruptcy, correct? The only reason why student loans cannot be discharged is due to tireless lobbying efforts – and in my view, lobbying is pretty much a form of legalized corruption.

Do you like Donald Trump? Think he’s a great guy? His companies have filed for bankruptcy four times, yet at no point was Trump cutting corners on health care or scrimping on glue for his toupee. The definition of “selfishness” in the United States is mightily skewed, if college grads with not a single asset to their name (like moi) face serfdom AND condemnation until the end of their days, while guys like Trump are lionized.

If I was irresponsible in borrowing money for my education – what about the people raking up hundreds of thousands of dollars worth of credit card debt? We, as a society, have long ago decided that these people should be allowed a chance to re-build their credit histories and otherwise move on with their lives. Not only is it in their best interests – but it is in the interests of our economy. Student borrowers, on the other hand, have somehow gotten stuck with the label of “lazy, worthless pieces of shit” (quoting another troll here) who are out to “bring down the economy” and must therefore “be made to suffer for the harm they’ve caused.” Investing in one’s degree? You’re worthless! Investing in gaudy designer handbags and other assorted forms of bling? You’re alright. Sure, you may have to do a lot of work to repair the damage – but at least we all understand where you’re coming from. We even have a term for it – shopping addiction. None of us think that said addiction ought to ruin anyone’s life.

Education is severely overpriced in America. But it is also practically the only means to be able to have an actual career. The generation gap has made sure that very few people who hold positions of power in our society – the lawyers, the judges, the senior politicians – are aware of the fact that times have changed. You went to college in the 80′s and found it affordable and managed to pay down your student loans in no time? Good for you! Guess what? It’s 2012 out there today – and your experience no longer applies. The price of education has risen dramatically – even as our opportunities in the workplace have been drastically reduced. Do the math. It’s no wonder why so many student borrowers are in trouble. As for the ones who aren’t – many of them receive help from parents and other relatives. I like what that Esquire piece by Stephen Marche says – we are becoming a patronage society, and that’s a depressing thought.

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15 thoughts on “Student debt and double standards

  1. There’s one major difference between normal debt and student load debt. All debt affects the borrower and the lender but, in the case of student loan debt, the lender is the American taxpayer as opposed to the rather societal unsympathetic credit cards companies and banks.

    It’s logical that people will think worse of you than someone who declares bankruptcy over other forms of debt.

    There may – I only say may – be also be an internalized, subconsciousness awareness that those other people are contributing to society’s economic well-being, whereas ones like you aren’t since, if you were, you’d probably not be in bankruptcy in the first place.

    I will also add “do the math.” Your loans are large and, by your own assertion, your chance of getting employment small. What point is there for society to give you a “second chance?” What are the odds that we’d measurably benefit from doing so?

    It’s not a double standard because the situations aren’t truly equivalent.

  2. No, it’s not as simple as the lender being the American taxpayer. In the case of federal student loans, they have IRB programs available. The private lending industry, however, is a whole other story. I suggest you look into it.

    The student loan scheme prevents young people from being economically active – you see it happening across the board. When millions of them are living with their parents and not contributing in any tangible way to the country’s economy, you’re going to see a lot more problems down the road. The middle class is being eroded in the U.S. – so we’re going to have more Trumps and *way* more poor people. Which is… contributing to society’s economic well-being how exactly? A widening gap between rich and poor does not help us move forward.

    I’m not one of the people who is having issues with “getting employment” at the moment – because I’ve been abroad since 2007. I suspect that a lot of people like me will seek employment abroad if the situation continues to deteriorate. No, it will not help the American economy in the long run either.

    I’m not “in bankruptcy” – I cannot declare bankruptcy, even if I wanted to. Hello?

  3. First, student loans are nondischargeable regardless of whether they are publicly backed. That’s bad policy, and it means that education loans are being peddled by every snake-oil salesman in the US to people desperate for credentials that will allow them to work for more than minimum wage.

    Second, ALL discharged debt rebounds on us somehow. Lenders build bad loans into the cost the rest of us pay for borrowing. And it doesn’t stop with borrowing. The leading cause of bankruptcy in the US remains medical bills, and if you think hospitals and insurance companies don’t pass those debts on to the rest of us, think again.

    Finally, there are plenty of government-backed debts that are dischargeable. The two biggest blocs are mortgages and SBA loans.

    So student loans really are the odd man out.

  4. It’s only relatively recently that we saw student loans introduced in Britain, before which university places were completely financed by the taxpayer. The idea was that by allowing talented people from poor backgrounds to enter higher education you exploit a resource that would otherwise be wasted in unskilled labour or simply unemployment. The most depressing novel in English, Hardy’s ‘Jude the Obscure’, charts an individual case of such waste in unnecessarily brutal detail, among other iniquities of Victorian Britain. Basically it’s long been accepted over here that the country is better run when intelligence and talent are the means of advancement, not how much money your parents have. It’s a big risk to borrow more money than the value of a house to buy something that might turn out to be worthless, and I don’t think I’d take it.

    If you think that enormous student loans are any better than no finance at all, you haven’t lived in a poorer family. My grandfather had to leave school because his parents had found him a job and the family needed the income. Where student debt can total hundreds of thousands of pounds, people like him simply won’t bother to apply: they’ll either give up on their own or be discouraged by struggling parents. That’s all right, though, because aristocratic government – in which the same group of families runs a society for generations and excludes all others from government or professional positions – worked reasonably well in Europe for a thousand years or more. We even introduced it over in America for a few years, but it proved unpopular.

  5. Its true that the cost of education is shameful in America and that people who critize those with student loan debt simply are not facing the facts: the inflationary cost of an education cannot be compared to the cost of an education 20 years ago. Coupled with the fact that the job market has commoditized an undergraduate degree (where as you cannot get hired for a career without one!) it’s incredibly insensitive to call our generation “selfish, self absorbed etc) However it is true that the cost of the education received should be weighed against potential future earnings. It IS irresponsible of someone looking to get into a field of work with a MAXIMUM pay of $40k (for the entire career) to take our $20+k in student loan debt each year. That is basic economics. With that said I’d like to make one more point. Having graduates in 2007, I too have an exorbitant amount of debt. However I put myself through college on a half scholarship, worked, an took out loans in my name. My parents do not help me pay off the loans nor do I even live in the same state as them. Yet I have never been late on a payment and come Nov I will have paid off $25k in 5 years. I chose business/finance because I knew the economic reality of my education. People need to be smarter and the government needs to cap the inflation on the cost of education

  6. That social structure worked fairly well for a few thousand years? Yeah, back when they sent children to the factories at the age of 6–or to the gallows for being ‘disobedient’. Back when competion for scarce jobs was kept down by 50% of women dying in childbirth and an infant mortality rate of around 40%? Oh right, women were broodmares back then. They didn’t need to be literate. Sure, poor people should just work in sweatshops, prostitute themselves, get tossed in prison for having ugly teeth and scaring the ‘civilized people’ again. Or we could just all live in convents and pray for forgiveness for being born into such a shitty life. PFFTTT!!

    I often wonder what your debt critics do for a living that they can be so critical of you for making every payment on your loan, stating that you’ve paid back most of the principal, and admitting that you still owe the 90% interest they’re charging you, Natalia. Oh, right. Credit companies don’t put it that way. They say you’re only paying the interest and haven’t touched the principal yet. *shame shame*

  7. Typo. I did learn how to spell “competition” before I racked up my own student loan debt. I learned lots of neat things in higher ed. Unfortunately there’s always some cute young white guy with less education than me, that employers would prefer to hire, beating me out of every position I apply for. My fault I don’t have a penis, I guess. I must be *scum* too.

  8. Meghan, you don’t know much about basic economics, I fear. Cause then you would know how precarious your situation really is. My cousin also went into finance, it was the smart thing to do; except one layoff and one bad car accident later, she is in default.

    This shit can happen to anyone and frequently does.

    A lot of people have seen their savings wiped in recent years, including the author of this blog… who is probably one of the best English speaking journalists working in Russia today (that’s my opinion, but I’ve seen it repeated elsewhere). Implying that she didn’t “plan” enough (who plans on astronomical medical expenses and losing their home?) is patronizing. I wish you all the best, Meghan, but please remember that bad karma can come back to bite all of us in the ass (yeah, I have been there too).

  9. Financial ruin is a little bit like sexual assault in the sense that most people are blind-sided by it. Society entertains dangerous myths about how everyone “can see it coming.” Ain’t true.

    Meghan, a few years ago, like you, I thought I had my student loans figured out. Then I got hit so hard that I had to come crawling to my dad for help. My dad, for the sake of reference, is not a nice guy. We are not friends. But if I hadn’t swallowed my pride and if he hadn’t had the means and the inclination to help, I would be in the same place that Nat is at right now.

    “Patronage society” is starting to ring true.

  10. Meghan, I applaud your efforts to pay back your loans and wish you the best of luck. The one major flaw I see in your argument is the idea that only students of means should be able to major in the arts, in journalism, social work, et al. This will lead to more stratification in our already stratified society.

    Personally speaking, I was “of means” when I got into school. And an English major made good business sense, actually – and continues to make good business sense. If it weren’t for external factors, I would still be a good cash cow – this is something I have repeatedly pointed out. You can make the best decision in the world, but if luck is not on your side and you do not have a safety net, you may not win after all.

  11. Excellent point made Natalia. Wish more journalists would write about this crooked system. Imagine that in Europe higher education only costs just over a thousand euro’s a year and in some cases is even free!
    In the US however education is just business and the politicians who have let it come so far should all be hanged IMHO.
    People often don’t realize the debilitating effects debt has and it makes no sense that someone who is willing to invest in his or her future (and thus in the future of the rest of society) has to suffer such consequences.
    When will people wake up and see that these overpriced loans only serve to enrich those who sell them?
    What benefit does any society have when it treats it’s future intellectual resources as mere cash cows?

  12. Has it not occurred to anyone (especially the federal govt) that if a person is educated they have a much higher earning potential which translates into PAYING MORE IN TAXES? It seems to me that it would be in the government’s best interest to make school as affordable (even free) as possible.

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