Since the US senate and Congress have passed laws making bankruptcy and the legal voiding of student debt illegal, we have painted needy students into a corner. Essentially because a small percentage of children, teenagers made errors; all students are now saddled with punitive laws. It is as if all black people were told that because a few too many of them were "irresponsible", that none would ever be allowed to buy guns , liquor, or borrow money for business loans and then
possibly declare bankruptcy. If these same laws were applied to oil and gas, and other business ventures, the USA would go down the economic tubes in a year.
If we don't either give college and graduate education away as a right or cease this absurd pound of flesh collections, we are doomed to have no more students who are not either very wealthy or very poor.
possibly declare bankruptcy. If these same laws were applied to oil and gas, and other business ventures, the USA would go down the economic tubes in a year.
If we don't either give college and graduate education away as a right or cease this absurd pound of flesh collections, we are doomed to have no more students who are not either very wealthy or very poor.
I stiffed all of my student debt and every bank dollar I've ever laid my hands on. And proud of it. I'm 79. The universities are fake "non-profits" ripping off their students. And the banks honor contracts and law only when it suits them and they won't get caught. Why should i have any sense of responsibility to these RICO racketeers? Stiff them! All those warnings from their propagandists that dire things will happen and de bogey man will get you if you do, are crap. I'm rich and living proof. Thanks banks!
1
I know and guys like you made the banks and the congress so mad they decided to punish all students in need. Were your grandkids to try this today they'd end up with three burger flipping jobs a day. I knew several guys like you-mostly it was guys-who didn't merely not pay the loans they made-they borrowed to buy cars, boats and put it into starting a business. The banks never hurt from it, but boy were they angry, and they are taking the flesh back out of every loan they give to anyone for student aid . Now we know who to blame.
Thanks Neill!
Thanks Neill!
1
And along with Neil we can also thank several major league athletes, countless doctors and lawyers, and even a college professor or two. THAT is why nobody can discharge student loans.
I know, because I negotiated that provision of law over a lunch. Buy me a drink some day, and I might tell you the whole story.
I know, because I negotiated that provision of law over a lunch. Buy me a drink some day, and I might tell you the whole story.
If you can't afford the college with reasonable debt re payment after - don't go to that college.
1
I truly dislike the nasty attitude of this article, and its deliberate misrepresentation of Mr. Siegel's point of view. Someone who refuses to repay a student loan on principle is not necessarily someone "not so big on financial obligations", or lying about their "intent to honor marital ones"!
All over the world, countries poorer than ours manage to provide university education to students without sending them into unmanageable debt, and then blaming them for it. All over the world, countries understand that an educated population is an asset in itself. Not in America.
Most people default on student loans not because they are fundamentally irresponsible, but because, led on by their college's manipulated statistics, they believed that the degree would lead to a job in which repaying the loans would be possible. When that didn't pan out, they found themselves in default.
Mr. Siegel suggested non-payment of student loans as a form of civil disobedience, meant to call attention to the absurd financial burden we place on those seeking education. I would think that this article, which seems sympathetic to the dad being shamed and robbed for his son's inability to repay his loan, might agree instead of toeing the line.
All over the world, countries poorer than ours manage to provide university education to students without sending them into unmanageable debt, and then blaming them for it. All over the world, countries understand that an educated population is an asset in itself. Not in America.
Most people default on student loans not because they are fundamentally irresponsible, but because, led on by their college's manipulated statistics, they believed that the degree would lead to a job in which repaying the loans would be possible. When that didn't pan out, they found themselves in default.
Mr. Siegel suggested non-payment of student loans as a form of civil disobedience, meant to call attention to the absurd financial burden we place on those seeking education. I would think that this article, which seems sympathetic to the dad being shamed and robbed for his son's inability to repay his loan, might agree instead of toeing the line.
5
Lee Siegel’s approach to avoid paying student loan debts isn’t right at all and is too risky for anyone to try. Though the problem that Lee Siegel is facing isn’t rare or surprising at all. Most families face this complication when their child needs money to pay for their college fees. Since college fees have escalated to a price where most average income families can’t afford, they are forced to take student loans. The average amount of money per year for college ranges from $9,139-$63,000 depending on the type of college you attend whether if it is an ivy league, 4 year college, 2 year college, culinary, community college, etc. The point is that colleges have made their fees so expensive that people are just aren’t able to repay their loan which is why Lee Siegel refuses to pay back his loan. Though his 3 steps to avoid paying a loan is perilous despite the precautions.
This is a truly obscene affair--schools (some barely worthy of the name) selling themselves to foolish young people by flaunting their needless fancy amenities without hinting at what percentage of the tuition for which loans are incurred was spent on frills.
And then the very oppressive and fairly recent law making student loans one of the very few debts that can not be discharged in bankruptcy.
That law, of course, was bought and paid for by lenders or holders in due course with a plan to squeeze our hapless recent graduates for every cent.
And then the very oppressive and fairly recent law making student loans one of the very few debts that can not be discharged in bankruptcy.
That law, of course, was bought and paid for by lenders or holders in due course with a plan to squeeze our hapless recent graduates for every cent.
3
Considering his age, his indebtedness for college was probably manageable, but he subsequently did Masters programs, which are a tuition cash cow for Universities. He seems to have been naive to taking on the additional debt. Deadbeat.
1
Siegel's essay amounted to "give me free stuff, because I want it". It's simple narcissism, up to and including his belief that someone else is to blame for his debts, or that he, uniquely, deserves a free Ivy-league education.
If everyone did as Siegel has, the system would collapse. "Act that your principle of action might safely be made a law for the whole world."
If everyone did as Siegel has, the system would collapse. "Act that your principle of action might safely be made a law for the whole world."
2
Those wanting to default on student loans must be the same sort of people who want to default on, or greatly reduce pensions that have been earned by, and placed in contracts with, state and municipal government employees. Money that was supposed to be paid to the retirement funds by the government bodies was, or is, used for "more important" purposes. It is now inconvenient to pay so why pay? Perhaps this logic will however, prevail. I can easily imagine social security checks being reduced or eliminated because the Federal government needs the money for something else.
3
American society has grown up with the notion that a college education is a rite of passage and that everyone needs a college degree in order to get a good job. This myth has been promoted by society in general, employers, the universities and colleges. In reality a college education isn't for everyone. Some people are good with their hands and for a lack of a better word their brawn, than their intellectual abilities. We are no longer a nation that produces product but a nation of servers and professionals. Everyone should have a right to education, not as means to future employment but as a means to a betterment of humanity. If the field one chooses leads to becoming a professional, doctor, lawyer, engineer, etc., all the better. A dear friend of mine, who is very wealthy, whose mother insisted on him attaining a degree when he only wanted to be a auto mechanic, those jobs should be available and not looked down upon. He wasn't cut out to be a desk person. Unfortunately manufacturing jobs and other jobs of that ilk do not exist in abundance anymore in the US but overseas which has helped the people over there improved their lots in life.
But there should be something that takes the enormous costs of attaining a degree and that has to be the elimination of student loans. This new group of kids graduating today have been raised with a sense of entitlement. Why not work summers to pay for education, if one didn't have the money for one, then they would find a way.
But there should be something that takes the enormous costs of attaining a degree and that has to be the elimination of student loans. This new group of kids graduating today have been raised with a sense of entitlement. Why not work summers to pay for education, if one didn't have the money for one, then they would find a way.
The root of "credit" is credere ... "I believe." The rational lender must see a sound basis by which the borrower can (and will) repay.
The whole message of this article is that one's life will be hell if you take out student loans and default -- that these loans cannot really be expunged, they will hang around the neck of the reckless or immoral borrower like the albatross in Coleridge's rime.
In the many cases where this borrowing did not aid the student to achieve any improved income then the lender was irrational, and the loan was both a fiasco and moral hazard.
In large measure these loan "programs" have been a cruel hoax -- a pretend way to provide a path for advancement by the poor, at which very few will succeed. This has rationalized enormous reductions in public support for higher education.
We now have the modern equivalent of debtor's prisons. They used to be known as "sponging houses" ... those incarcerated wrote piteous letters to relatives asking for money to get out. The reality of that system of debt is that it cost money to keep someone in debtor prison, so many creditors would eventually toss a debtor out, as no longer worth keeping -- but others died inside.
Our modern form costs the creditor nothing ... seemingly. So no one ever gets out. The creditor here is us though ... and we cannot escape the damage this does to our society, or the fact that these loans never should have been made in the first place.
The whole message of this article is that one's life will be hell if you take out student loans and default -- that these loans cannot really be expunged, they will hang around the neck of the reckless or immoral borrower like the albatross in Coleridge's rime.
In the many cases where this borrowing did not aid the student to achieve any improved income then the lender was irrational, and the loan was both a fiasco and moral hazard.
In large measure these loan "programs" have been a cruel hoax -- a pretend way to provide a path for advancement by the poor, at which very few will succeed. This has rationalized enormous reductions in public support for higher education.
We now have the modern equivalent of debtor's prisons. They used to be known as "sponging houses" ... those incarcerated wrote piteous letters to relatives asking for money to get out. The reality of that system of debt is that it cost money to keep someone in debtor prison, so many creditors would eventually toss a debtor out, as no longer worth keeping -- but others died inside.
Our modern form costs the creditor nothing ... seemingly. So no one ever gets out. The creditor here is us though ... and we cannot escape the damage this does to our society, or the fact that these loans never should have been made in the first place.
3
The cost of education will go down if the profit from student loans were eliminated. The amenities on college campuses are many that universities can do without. On a visit to one dormitory recently here in Chicago, there were fireplaces and Jerusalem limestone, giant salt water aquariums and list goes on. If someone wanted an education, then they should put some skin in the game by working summers and spring break and realize as Milton Friedman said there is no such thing as a free lunch.
1
I was really annoyed by the callousness of Mr. Siegel's opinion piece. I do like Ron Lieber's very astute observation that Mr. Siegel's piece may have the opposite effect that he intended, with legislators likely to continue to make it difficult to discharge student loan debt.
As someone who took way too much student loan debt in a field that could never remunerate me well enough to repay it, I did what 95% of people do: Find a field where I can make enough money. I hold the school responsible, since they are the ones that found me qualified for admittance, but stuck me with loans while they gave foreign students scholarships.
Karma has a way of working that out, as that school only receives silence as a response to their many begs for alumni contributions.
As someone who took way too much student loan debt in a field that could never remunerate me well enough to repay it, I did what 95% of people do: Find a field where I can make enough money. I hold the school responsible, since they are the ones that found me qualified for admittance, but stuck me with loans while they gave foreign students scholarships.
Karma has a way of working that out, as that school only receives silence as a response to their many begs for alumni contributions.
1
I'm 62 and took out $48,000 in Parent Plus loans for my two sons. That is in addition to the loans they took out. I have two thoughts on repayment; the colleges and universities raised tuition at an absurd rate in direct response to the ready availability of loans for students over the last 30 years. That is unconscionable; the schools should be held accountable and be compelled to pay 50% of the outstanding loans from their endowments, as well as refund 50% to people who paid their loans back.
The second thought is the predatory nature of our own government, with the interest that they charge for the loans. The governments of other industrialized countries not only subsidize a college education, many offer it for free. The United States, at the very least, should offer interest-free loans. At minimum. I hope young people organize en mass and refuse to pay their loans until this country lives up to the hubris of its promise and recognizes that things have gone off the rails. "The greatest country on Earth"...not really.
The second thought is the predatory nature of our own government, with the interest that they charge for the loans. The governments of other industrialized countries not only subsidize a college education, many offer it for free. The United States, at the very least, should offer interest-free loans. At minimum. I hope young people organize en mass and refuse to pay their loans until this country lives up to the hubris of its promise and recognizes that things have gone off the rails. "The greatest country on Earth"...not really.
7
The Federal Government at first allowed the banks to screw our young people by allowing these banks to get our young people in huge debt with student loans, and we know how fast these banks would be to forgive even a small part of what's owed to them.
Then the government started making its own loans to students in need at somewhat lower rates, but still...debt is debt. Then came Bush/Cheney, a collapsed economy and no jobs and a decade's worth of students burdened by debt they simply cannot repay.
Wise minds can easily come up with a plan to forgive all or part of the debt in a fair manner so our former students can get on with their lives, contribute to our tax base, buy homes, raise families and live relatively normal (and hopefully) middle class lives. Having these onerous debts does no one any good, not even the banks that are trying to collect.
However, it is those who are owed the money (banks and government) that must act. The debts acquired must stay in effect until relief comes through a Congressional plan which is supported by the banks. The universities should also cooperate by lowering tuition. But of course none of this will ever happen.
Then the government started making its own loans to students in need at somewhat lower rates, but still...debt is debt. Then came Bush/Cheney, a collapsed economy and no jobs and a decade's worth of students burdened by debt they simply cannot repay.
Wise minds can easily come up with a plan to forgive all or part of the debt in a fair manner so our former students can get on with their lives, contribute to our tax base, buy homes, raise families and live relatively normal (and hopefully) middle class lives. Having these onerous debts does no one any good, not even the banks that are trying to collect.
However, it is those who are owed the money (banks and government) that must act. The debts acquired must stay in effect until relief comes through a Congressional plan which is supported by the banks. The universities should also cooperate by lowering tuition. But of course none of this will ever happen.
4
Education is a business, make no mistake about it. Students are the consumers of its services. If the cost value relationship is not in the buyers' best interests, over time the demand for those services should decrease. Student loans alter the ability of individuals to evaluate what they are truly buying and have produced a glut of graduates overwhelming the U.S. economy's ability to provide jobs, especially in a world that has become much more interconnected and competitive.
If a college education were free like a secondary school one, then imagine what the glut will become. Unfortunately for the debt laden graduates and their families, they were sold a service that has a very bad cost value relationship for many. No different than many consumers who bought houses they could not afford or leased cars that were beyond their means. A nation of debt slaves is the way the U.S. is going with the encouragement of The Federal Reserve, the bankers, and members of Congress. They are the ones to blame and not the debtors, who should perhaps have known better, but did not.
If a college education were free like a secondary school one, then imagine what the glut will become. Unfortunately for the debt laden graduates and their families, they were sold a service that has a very bad cost value relationship for many. No different than many consumers who bought houses they could not afford or leased cars that were beyond their means. A nation of debt slaves is the way the U.S. is going with the encouragement of The Federal Reserve, the bankers, and members of Congress. They are the ones to blame and not the debtors, who should perhaps have known better, but did not.
you borrowed the money, you owe it back. plain and simple!
4
I often wonder who these people are whose default position in every argument is the "plain and simple" one, as if others in the conversation haven't considered the plain and simple solution and rejected it, because problems are created by many actors and solutions are often far more complex.
I have come to believe that these people lack insight and introspection, that they believe clever sound bites are actual solutions, and therefore vote Republican even when it is not in their own interest to do so.
Ah well, it has always been so, and unfortunately these people make it more difficult for the country to advance globally when we abandon our youth (and many other groups) so cavalierly.
I have come to believe that these people lack insight and introspection, that they believe clever sound bites are actual solutions, and therefore vote Republican even when it is not in their own interest to do so.
Ah well, it has always been so, and unfortunately these people make it more difficult for the country to advance globally when we abandon our youth (and many other groups) so cavalierly.
To CJ, some of these "dusty old voices" that you assume are sitting on pots of money tisk-tisking at the young are the very parents who took on loans themselves to reduce the burden on their children, and co-signed the loans that will rebound to them when you default. Have you considered - no of course you haven't - that they supported and paid for you, and in many cases are helping their elderly parents with medical and necessary expenses? Have you asked them how prepared they are for THEIR retirement and declining years so YOU don't have to pay for and support them? This is awful. We are not gloating. And we were snookered too, and just as scared for you as you are.
2
I certainly won't defend Mr. Siegel for skipping out on loans, but I think Mr. Lieber is glossing over a key point about being unable to discharge student loans in bankruptcy. Mr. Lieber barely mentions it, but the surge in student loans and the surge in obscene tuition are due in large part to the decision by Congress to carry water for the lenders and guarantee that they lenders will, at some point, get their principal and interest back. With that guarantee, lenders began throwing money at students who may have lacked ability or commitment to succeed in college. And the colleges, seeing unlimited funding available, went after it with a vengeance. I would suggest putting the lenders and the colleges on the hook for those loans if the student doesn't finish with a degree. Maybe a third each, student, college and lender. That would give lenders incentive to be careful with their money, and colleges would have an interest in keeping students until graduation.
2
One aspect of this story struck me. Employers can legally check your credit history before hiring you, because it's an indication of your character. At some point, will they also be able to check your medical history, too? But the real question I want to ask is, if it's OK for prospective employers to know your financial history, why did the judge in the case involving Ellen Pao, the Silicon Valley attorney suing her firm for gender discrimination, not allow any information to be given to the jury about her husband's financial problems? His debts would have gone a long way to giving insight into her behavior and her reasons for suing her law firm.
1
Having to explain why one should repay money willingly borrowed is like having to explain why one shouldn't rob a bank.
2
Whilst I support Mr. Siegel 100% & agree with his civil disobedience, most people who don't pay student loans are not choosing to default -- they are unable to pay because they are not earning enough money. These debts are not repayable. It's not a question of sucking it up for a few years & living frugally like it was for previous generations. Today's student debtors are indentured servants - they have NO hope of ever repaying these days. They are looking at a lifetime of poverty & stress & debt for an education that should have been FREE.
Gee, I thought President Obama was going to forgive all these loans? I guess the last election put a stop to that -- though, of course, there's always the possibility of executive action!
1
The truth is there aren't enough jobs in the country to allow grads to begin to payoff their loans. Mr. Lieber skirts around that issue. By contrast to the $1 trillion Mr. Lieber alludes to in his article, the Iraq war cost $1.7 trillion which could grow to $6 trillion over the next four decades. Any thoughts on how to pay back that cost?
4
My firm does credit checks of job applicants and would not hire Mr. Siegel. His advice is poor except for those moving off the grid completely.
1
The simple fact is that Lee Siegel is a dead beat to which he boastfully admits.When the Gov't backs student loans you and I are the Gov't and yours and my taxes are paying for his debt.When one assumes an obligation it is ethically and morally despicable to default on that debt no matter how long it takes provided one is gainfully employed and indulging in luxuries.Mr.Siegel is a writer having published 5 books so he lies if he claims he is unable to pay.I am a physician and I had patients who could well afford my fee,but rationalized not paying simply because they didn't want to despite like Mr. Siegel they could well afford it.I collected because I knew their circumstances.Those who could not I forgave.As a taxpayer I would urge the Gov't to follow my example.Go after Mr.Siegel!
4
Comments about the outrageous cost of college today are right on the money.
In the mid '60s when I started at a state university in the Big 8 conference, tuition for 12 credits or more was $120 total. Dorm room and board ran about $270 per quarter. My dad paid these expenses; walking around money was my problem. Total out of pocket for my parents was about $1,200. Dad was a mechanical engineer with a salary somewhere close to $12,000 a year. The math is grade school level. An education at an excellent school was about 10% of a middle class family's annual income. I wanted to go to MIT, but Dad said no way was he paying $10,000 a year for me to go to college. Even to my hormone addled mind that made eminent sense.
At that same school today, the annual cost for the above items is in excess of $16,000 per year. To be no more than 10% of a family's income today requires that income to be over $160,000. As of 2014, a little over $76,000 was the high end of middle class income, making the comparable cost of education over twice what it was in 1965.
And private schools are multiples of the cost for state colleges. To go to MIT today sets one back about $60,000, assuming a very modest extracurricular life.
One could, I suppose, argue that considering the cost of an MIT degree has gone up only 6 times in the past half century and public schools have risen 13 times, MIT is a relative bargain.
Tell that to my dad.
In the mid '60s when I started at a state university in the Big 8 conference, tuition for 12 credits or more was $120 total. Dorm room and board ran about $270 per quarter. My dad paid these expenses; walking around money was my problem. Total out of pocket for my parents was about $1,200. Dad was a mechanical engineer with a salary somewhere close to $12,000 a year. The math is grade school level. An education at an excellent school was about 10% of a middle class family's annual income. I wanted to go to MIT, but Dad said no way was he paying $10,000 a year for me to go to college. Even to my hormone addled mind that made eminent sense.
At that same school today, the annual cost for the above items is in excess of $16,000 per year. To be no more than 10% of a family's income today requires that income to be over $160,000. As of 2014, a little over $76,000 was the high end of middle class income, making the comparable cost of education over twice what it was in 1965.
And private schools are multiples of the cost for state colleges. To go to MIT today sets one back about $60,000, assuming a very modest extracurricular life.
One could, I suppose, argue that considering the cost of an MIT degree has gone up only 6 times in the past half century and public schools have risen 13 times, MIT is a relative bargain.
Tell that to my dad.
College tuition at a major private university was $1,250 when I graduated in 1965. It's over $47,300 today, an outrageous 7.6% growth rate compounded for 50 years. If it grows at the same rate for the next 50 years, it will grow to $1,843,000. Per year, folks, just for tuition. In the process of this explosion, tuition has grown from 16.7% of median family income in 1965 to 95% of median family income today, as median family income has actually declined somewhat for several years. If we assume median family income will resume its historic 3% growth rate, then in 50 years it will be $219,200, and college tuition will be only a staggering 840% of median family income. The game is over.
Students who refuse to pay their loan debt are unfortunately telling us that they can never hope to pay it back, and we should have known that all along. I don't agree with their not paying a debt. But I think we need to heed the message and act. I think we are fundamentally on the wrong course. We should only permit such loans to go to students who attend colleges that demonstrate a commitment to cost containment as the vehicle for actual tuition reductions, and we should make the colleges co-sign, so that they have a stake in the outcome.
Students who refuse to pay their loan debt are unfortunately telling us that they can never hope to pay it back, and we should have known that all along. I don't agree with their not paying a debt. But I think we need to heed the message and act. I think we are fundamentally on the wrong course. We should only permit such loans to go to students who attend colleges that demonstrate a commitment to cost containment as the vehicle for actual tuition reductions, and we should make the colleges co-sign, so that they have a stake in the outcome.
1
What administrators, senators keep sidestepping is the very basic facts...Basically most people can afford the gaudy tuition bills, basically at least 20% more people would graduate if they were granted the loan credit to do so, basically the people who can afford the guady tuition bills like it the way it is....for a significant portion of us, college was a setup....blame it on transfers, blame it on insufficient capital, blame it on skipping community college because you were smart enough to go straight to the more expensive college...either way the only thing the government has to do better is pay the gaudy college bill so more students get the degree in full....it's no wonder there is a supposed talent shortage, what a waste of money to 2/3 graduate so many students....the government is finding excuses...they can figure out how to finance k-12 and then they play dumb after that
The whole student loan business is a three-way scam among the government (the Department of Education), the finance industry, and the college education industry.
Colleges get a huge supply of financially capable students,which enables them to expand and increase their payroll; banks get to charge interest at 5 or 6 points over Prime and can't lose because the DOE has guaranteed the loans; and the DOE can't lose because student loan debt is not dischargeable in bankruptcy.
Its effect reminds me of old company towns that provided housing, groceries, clothing etc. to employees on credit all of which was paid by deductions from employees' wages. By keeping employees in debt, they kept control of them. Employees became vassals.
Company towns now have been replaced by a Corporatist Nation. College graduates laden with student loan debt are controlled by the corporate world because they must have jobs to pay off these loans or the DOE collection system will strip them bare. How discouraging it must be to graduate college after all that work only to discover that you are a vassal. Bob Dylan said it right many years ago, "Twenty years of schooling and they put you on the day shift."
We need free college tuition, and we need a loan amnesty program that at least lowers interest to the federal funds rate and permits discharge in bankruptcy.
This is just one example of our government's hatred and abuse of people who are merely not wealthy.
Colleges get a huge supply of financially capable students,which enables them to expand and increase their payroll; banks get to charge interest at 5 or 6 points over Prime and can't lose because the DOE has guaranteed the loans; and the DOE can't lose because student loan debt is not dischargeable in bankruptcy.
Its effect reminds me of old company towns that provided housing, groceries, clothing etc. to employees on credit all of which was paid by deductions from employees' wages. By keeping employees in debt, they kept control of them. Employees became vassals.
Company towns now have been replaced by a Corporatist Nation. College graduates laden with student loan debt are controlled by the corporate world because they must have jobs to pay off these loans or the DOE collection system will strip them bare. How discouraging it must be to graduate college after all that work only to discover that you are a vassal. Bob Dylan said it right many years ago, "Twenty years of schooling and they put you on the day shift."
We need free college tuition, and we need a loan amnesty program that at least lowers interest to the federal funds rate and permits discharge in bankruptcy.
This is just one example of our government's hatred and abuse of people who are merely not wealthy.
Since the 1980's, too many people have a sense of entitlement. An entitlement to a college education as long as it is easy to get a loan. These are the same people who lease a Mercedes Benz while rationalizing why they cannot pay their own child support payments after they broke that marriage vow as well. Most people never prepare a budget to live by or projections on future expenses and how much better their actual financial situation would be with a cost analysis of expenses. I have been amazed how many people still apply for loans for law school or medical school and never review the total debt they will incur and if they obtain employment, how long it will take to pay it off. It's perhaps time that 18-year olds stop listening just to music and using social media and watch the news and read about employment trends before they borrow their first $20,000.
1
Those who fail to repay their student or other debt should be publicly shamed. Period.
That's not an Obama period.
That's not an Obama period.
1
Siegel is an national embarrassment and I suspect he knows it. To suggest people willfully defraud their fellow citizens...yes, one way or the other we're picking up the tab for this, is a horrible idea. Thank you for listing the perils of doing so in this update. Sadly, it may cause many people to pay their loans for only a number of self-serving reasons rather than because of the moral obligation to do so.
Like others, I hope the IRS, etc find a way to claw back some money from Siegel, even if we have to wait to take 15% of his Social Security check.
Like others, I hope the IRS, etc find a way to claw back some money from Siegel, even if we have to wait to take 15% of his Social Security check.
1
Two issues here. Reaganism began when as Governor of California he began to dismantle one of the outstanding education systems with the argument that it was the student as consumer that benefited rather than the state with better educated work force. Therefore the student had to pay more of the cost of higher education rather than the state. Second is the rather usurious attitude of lenders in partnership to sell and finance the holy grail of a college degree as the entry to the good life. Buyers must be aware of the pledge taken when borrowing. Once signed part of you belongs to the lender. No wonder the word "mortgage" comes from the term "dead pledge", it's the only way out, now even that may not be the case. When I as at U of Colorado in mid 1960's tuition was under $500 a year.
Here is an article on how "philanthropist" Catherine B. Reynolds made her billions - through private student loans! http://www.truth-out.org/archive/item/71882-student-loan-nonprofit-a-boo...
She was a big winner, and students were the losers.
She was a big winner, and students were the losers.
You borrow the money, you pay it back. Why should the lender eat the problem. If our country keeps bailing people out of their problems, we will be a welfare state with no $!
1
I saved for 18 years for each of my three daughters and those college degrees still cost more than what I saved. I ponied up the difference and today they and I are debt free. For the parents that can, you can save a lot for college but it is a decision a couple has to make and then stick with for at least 18 years. We did and I and my daughters are grateful we did.
However, I do think the tuition is way out of line. In 1973, I was graduated from the University of Pittsburgh for a total cost of four years of college and books for about $6000. I stayed at home because I did not have money for room and board. The middle daughter left Penn State at about $18000 not including room and board. If I did my math correctly, that would amount to 6.6% inflation every year for between 1973 and 2012. Either the students need to start finding work right after high school and start starving the colleges for new admissions until they get their costs under control or the whole system is going to fall apart at the seams.
However, I do think the tuition is way out of line. In 1973, I was graduated from the University of Pittsburgh for a total cost of four years of college and books for about $6000. I stayed at home because I did not have money for room and board. The middle daughter left Penn State at about $18000 not including room and board. If I did my math correctly, that would amount to 6.6% inflation every year for between 1973 and 2012. Either the students need to start finding work right after high school and start starving the colleges for new admissions until they get their costs under control or the whole system is going to fall apart at the seams.
Mr. Siegal is a scammer and a deadbeat. Is that the type of person we need in academia?
1
Bad policy always creates bad outcomes. It's been too easy to borrow outrageous amounts of money because the taxpayer now stands behind it. Sooner or later, the sob stories will mount, as they did with mortgages and health care and the most irresponsible among us, will AGAIN be rewarded.
We should immediately re-privatize student loans.
We should immediately re-privatize student loans.
There is a another solution, emigrate. Young well educated skilled people with good English skills are in demand all over the world. If America wants to alienate its prime human resources, ultimately its most important asset, there are plenty of other countries willing to take advantage of that situation and say thank you.
Migration is a very human condition. Throughout history people have migrated in things were bad at home, and there was always someone to realize that taking these immigrants would be the smartest thing they could do.
All the robust economies, Canada, Australia, New Zealand, Germany, China are happy to offer young educated skilled Americans what America no longer does.
Morally I agree with Siegel 100%. Loyalty and good faith are a two way street. America has stiffed its young generation by rigging the game, arbitrarily taking the American Dream, the foundation of America out of play,limiting it to the 1%-10%. They have every right to stiff America in return
Migration is a very human condition. Throughout history people have migrated in things were bad at home, and there was always someone to realize that taking these immigrants would be the smartest thing they could do.
All the robust economies, Canada, Australia, New Zealand, Germany, China are happy to offer young educated skilled Americans what America no longer does.
Morally I agree with Siegel 100%. Loyalty and good faith are a two way street. America has stiffed its young generation by rigging the game, arbitrarily taking the American Dream, the foundation of America out of play,limiting it to the 1%-10%. They have every right to stiff America in return
This is a finely articulated argument for why Mr. Siegel is adding fuel to a serious national conversation about the high cost of higher education and the student loan bubble. At CGI this week, many private and public organizations gathered with former president Clinton, and lots of innovative solutions are being proffered for making education affordable and more obtainable-- witness Teach For America, Venture for America, and Year Up just to name a few. But it feels flat out wrong simply to default because the stakes have changed. Siegel's strongest argument hinges on the "banks and big corporations took on risky debt and walked away from it" why shouldn't I? Many people who watched their home values plummet below their mortgage balance could make the same argument. Most didn't.
Yes, we need to look at real reforms that bring the cost of education down. As a personal decision goes, many like Mr. Siegel make a series of decisions that later prove untenable. But calling for everyone currently encumbered with debt to forego their obligations hardly makes sense. Bravo Ron for bringing this issue into perspective!
Yes, we need to look at real reforms that bring the cost of education down. As a personal decision goes, many like Mr. Siegel make a series of decisions that later prove untenable. But calling for everyone currently encumbered with debt to forego their obligations hardly makes sense. Bravo Ron for bringing this issue into perspective!
1
The problem here is the same one that plagues our health care system: the costs are patently unreasonable to the point of being completely disconnected from reality. The “solutions” to make both more affordable have been student loans and health insurance, which have only fueled the growth in the absurd costs. The logical solution is to nationalize both college education and health insurance in a similar way to what has been done in Canada and Europe. Unfortunately, this solution will never be adopted as those who profit from the status quo in the United States need only cry “Socialism!” to defeat such proposals, thereby condemning another generation to crippling debt burdens while benefitting a handful of moneyed, politically connected elites who won't rest until the 99% don’t even have 2 nickels to rub together.
Google Mr. Siegel and you will find that he lives in upper middle class Montclair NJ in a home with about $500k. He seems like he must be earning a reasonable amount of money. I guess the Feds are too lazy find him. Hey, he owes the money. Why should the Feds (that is you and me) subsidize his refusal to pay up. Shameful!!
13
A student loan is forever. There's no statute of limitations and discharge in bankruptcy is functionally unavailable. The Government just keeps tacking on the interest and, as has been noted in The Times, waits for a claim for Social Security to grab its pound of flesh. It is reprehensible of American Society to create mountainous debt, beginning with Freshman college so that the student emerges just where he's intended to be his entire life: a slave to interest and in peonage to debt.
3
I have to agree with you. I have never defaulted on a loan; and I live in a very small, very old house, worth nothing like $500k. So, "waaaaagh." I'm assuming Mr. Siegel made it through high school, at least. So did I. It doesn't take a fancy degree to figure out what happens if you co-sign a loan for a youngster who might not be able to pay. I told my own son to work his way through college. I'm glad I did, as they're garnisheeing his wages now. Better his than mine.
What the Siegel piece and this follow-up article underscore is the ridiculous and unaffordable college tuition system we have in this country. Unsurprisingly, it's just another lousy racket. It's hobbled an entire generation, stunted careers and undermined our economy.
12
The new reality in the United States is that, unless parents are rich, they should forget about expensive colleges. No more "Oh, MY kids went to NYU!" when New Paltz State would do perfectly well, and perhaps better in some ways.
10
We should have some dramatic displays of the nature of money, such as by shredding a 5 dollar bill and asking the students where did the money go? Of course I'd be individually 5 dollar poor, but if it was money I was entitled to buy something that something still exists, whether or not I have disposed my promissory note. I doubt with the proliferation of credit card many even have a good sense as to what money owed means. In fact I use my credit card by loading it with balance -- a few hundred so that if I ever forget payment on time, I'm not lumped with a 20 dollar fee. Not sure if anyone else discovered this use?
2
The sense of entitlement, the silly (stupid) parents who co-sign these loans, "wannabes" who must go to a certain school instead of a community college that they could afford, the government who should never have gotten into the student loan business, the colleges for allowing costs to skyrocket where many courses could be online to lessen the cost, robbing the public for the ridiculous cost of college administrators , etc. no financial commitment on the part of the student, etc. No sympathy!
11
Janis, my parents were born and raised in Ridgewood, I came into the world at the old Valley Hospital and grew up in Wyckoff. That is pretty much the bullseye of parents wanted their children to go to the "best" colleges and universities. Exactly who are the "wannabes" you are referring to?
I remember my parents telling me they would not co-sign for my student loans (nor any loans) when I was in my late teens. I was really bitter at the time, but now I understand and appreciate that decision they made.
Maybe college wouldn't be so expensive if they didn't pay Hillary Clinton $250,000 for 1 speech, or if they didn't pay Elizabeth Warren $400,000 to teach 2 classes
16
or if they had to pay Pat Buchanan for similar speeches either.
And the relevance of your comments is? The importance of education in logic??
So many dusty old voices talking down at us while sitting comfortably on their eras of immense economic surplus. What a hard life to live during a time when outsourcing meant jobs moved to another state. We grew up with our parents and grandparents telling us "Get a college degree so you don't flip burgers for a living" and now they're upset at us that the only entry level jobs we can take are flipping burgers for a living.
Entry level jobs don't exist at the levels needed to accommodate grads. Outsourcing has whittled away the footholds of an entire generation. The starter jobs that do exist require, surprise-surprise, a college education. Not just any college education either, it must be a *good* college. Not a good college education, just college. The gain from the education is largely marginal, but the gain from the NAME of the institute is invaluable. My state school education was far more rigorous, but that doesn't mean people respect it.
We, the graduates, did not build this system. We were simply fed in to it at the behest of our seniors. The same seniors that drive the securitized student loan market as they search for a higher yield in a stagnant environment... But no, we're the brats.
Entry level jobs don't exist at the levels needed to accommodate grads. Outsourcing has whittled away the footholds of an entire generation. The starter jobs that do exist require, surprise-surprise, a college education. Not just any college education either, it must be a *good* college. Not a good college education, just college. The gain from the education is largely marginal, but the gain from the NAME of the institute is invaluable. My state school education was far more rigorous, but that doesn't mean people respect it.
We, the graduates, did not build this system. We were simply fed in to it at the behest of our seniors. The same seniors that drive the securitized student loan market as they search for a higher yield in a stagnant environment... But no, we're the brats.
18
Too much self pity
1
If you borrow money, you should pay it back. Had you done your homework, you'd know that, in most cases, going to the local "U" and commuting from home was the most cost-effective option. Or, you could do a two-year local school and transfer for the final two years.
The endless four-year party you call "college" needs to end. I don't want to pay for anyone else's party. I paid for my five kids and I paid for my own college AND law school.
No one told anyone they had to go to a private four year school.
The endless four-year party you call "college" needs to end. I don't want to pay for anyone else's party. I paid for my five kids and I paid for my own college AND law school.
No one told anyone they had to go to a private four year school.
1
Now that Mr. Seigel have made himself famous by "teaching" others how to avoid paying back their student loans, I would not be surprised, that the IRS will garnish the royalty checks for his books, or any payment he might receive for his TV appearances
14
An expensive college education - live at home with parents, go first two years at community college, last two years at public college. Work summers and over Christmas to pay for incidentals. Apply to all possible scholarships. Finish in four years (the normal time period of previous generations). Then college loan won't be a big issue.
12
no, it would still be an issue. The minimum wage jobs you mention do not even pay for books. Transfering community college credits can be, many times, problematic. The world is not the panacea taht it was when you were a student (when tuition was practically free).
Student loans, as currently established in the US, are entitlements for our fellow citizens. Instead of the government underwriting people and colleges to make sure the government will get the money back, the government simply relies on colleges to do this.
Southern New Hampshire accepts the kid with 800 on his SAT and the government allows said kid to attend SNH by letting the kid borrow $40,000. Southern New Hampshire, with its 45 percent graduation rate, is going to hurt this kid. But it will get the cash from the government. It's just nuts. In ten years the kid will owe 40,000 at six percent and he will not have a degree.
Southern New Hampshire accepts the kid with 800 on his SAT and the government allows said kid to attend SNH by letting the kid borrow $40,000. Southern New Hampshire, with its 45 percent graduation rate, is going to hurt this kid. But it will get the cash from the government. It's just nuts. In ten years the kid will owe 40,000 at six percent and he will not have a degree.
5
Just take it to the next stip: no, its not nuts. Just follow the money. Who is coining it in this digusting system? Wow, what a revelation!
Make the best business decision for yourself. That is what the "too big to fail banks successfully did" and continue to do pursuing mortgage holders when the banks no longer can figure out who the actual loan holder is.
6
I am seriously sorry to say this, but I am with this writer in his opinion.
1
C'mon, Lieber, at least try to be a tiny bit objective. No argument here that default is a very risky proposition, but you've gone out of your way here to be snide and condescending. Your words would carry more weight if you at least tried to hide your bias.
2
We keep reading over and over how terrible the student loan problem has become and how much worse it is for young people now. What kind of statistics do we have on it though? I write this as a fifty-something who is still making payments, so I have first-hand experience with the difficulties of paying off an astronomical debt. But I'm also enrolled in the federal income-contingent plan, which means that my payments are a reasonable percentage of my income and will not continue indefinitely. At one point, earning little money and raising two children by myself, I had a monthly payment of zero. Terms in general are becoming even more reasonable for those younger than I. Under the regular program, I have to make 25 years of payments. People who signed up more recently will only make 20. Those working for non-profits only have to pay for ten years, but this program started in 2007, so the 15 years I spent working for a nonprofit before that don't count. So the question I have is this: are things really that much worse for millenials, or do they, encouraged by the media, just complain more? And if you're going to bring up the changing cost of tuition, please use constant dollars. Sure, tuition was low in 1975, but my waitressing job paid $1.25 an hour. I really wish I'd been able to start paying my loans under the terms available now.
6
Student loans became a bonanza enabling colleges to raise their tuitions way beyond the cost-or-living increases and a similar bonanza for banks with high interest rates in a low interest era plus an almost guaranteed repayment enabled by Congressional default penalties.
The only cow not served was the student.
The only cow not served was the student.
9
The penultimate narcissist: go to college/grad school for a long time on someone else's money -- then refuse to pay them back. No matter if this makes it much more difficult & expensive for every other college student trying to get a loan. Then advises to "marry well." My dear girl, good luck -- because you'll need it with this person.
23
Now, now. As Siegel often reminded us in his article, he is "special", so he would actually be a chump if he followed the rules. Rules, as dear Leona H. famously noted, are for the little people.
Maybe the next excuse we will hear is that NOT paying off a debt is a deeply and sincere religious belief. After all, I can now refuse service to others in some states because of the caveat, surely it can be extended logically to bill paying. Yes?
7
Siegel went to Columbia at a cost of what? $50,000 a year. He could have traveled one mile further uptown and gone to City College, which costs $6000 a year ($12,000 for non-New York residents). He decided to have his cake and eat it--and make taxpayers eat his student loan. He's a thief and the fact that the banking industry has its own share of thieves does not absolve him of low, or more to the point non-existent moral character.
29
Mr. Siegel is a crook and I hate the fact that I and my fellow citizens have to pay for people like him.
19
How Siegel is not in jail or has not had every material
possession and every last penny of every savings account confiscated is an immoral outrage
possession and every last penny of every savings account confiscated is an immoral outrage
The "business class" preaches the working class types who enter into loans should make their loan payments regardless of circumstances but the business class types readily default on contracts for the slightest economic downturn and lays off significant portions of the working class.
8
I know some people who believed that they were above needing to repay debt and have gotten themselves into serious financial problems. During their working years, they managed but now as they approach retirement, they are in a world of hurt. It's one thing to still have a mortgage at retirement if your retirement income includes more than social security. It's another to have used your house as a credit card and to have to repay a home equity loan where you have only paid interest as well a regular mtg. payment and credit card debt. These people sounded a lot like Mr. Siegel--all bravado---until they see their working income disappearing while their debts are staring them in their face.
4
The same people who are in over their heads with student loans are the same ones who complained during their math classes (and so didn't learn anything in them): "What good is it going to do me to learn this stuff?"
7
maybe but good engineering schools (i.e. MIT, Carnegie Mellon) are pretty expensive, especially relative to the community colleges that the people you mention will probably be attending.
"Parents stand idly by and often co-sign for the debt."
Is it really? Blaming it all on teenage naivete might explain only part of the story. There are so many more stories about professional degrees, MBA's and med school grads carrying tens to hundreds of thousands of dollars of student loans. And then there are those adults who are stupid enough to borrow as much on for-profit, a good-for-nothing piece of paper thinking that "online degree" would mean something, all while ignoring cheaper options like community college or state schools, because they could be tougher and take longer. Those are not teenage ignorance, those are willful decision based on unsound judgement for people hoping to take shortcuts. And when things don't turn out, it MUST be someone else's fault for "duping them in." I'm sorry, but I just don't buy it.
Is it really? Blaming it all on teenage naivete might explain only part of the story. There are so many more stories about professional degrees, MBA's and med school grads carrying tens to hundreds of thousands of dollars of student loans. And then there are those adults who are stupid enough to borrow as much on for-profit, a good-for-nothing piece of paper thinking that "online degree" would mean something, all while ignoring cheaper options like community college or state schools, because they could be tougher and take longer. Those are not teenage ignorance, those are willful decision based on unsound judgement for people hoping to take shortcuts. And when things don't turn out, it MUST be someone else's fault for "duping them in." I'm sorry, but I just don't buy it.
5
As one half of a couple that have a combined student loan burden of over $200k, I’m flabbergasted by the moralizing on both sides of the issue.
Paying down $100k at current student loan interest rates in 10 years would cost us $3,000 a month. Given that the median income for college graduates is about $45k/annum, that would leave us with about 20% of our predicted income for all of our expenses. So we went on an income-based repayment plan for 300 months that sets our payments at about $320 per month in total (given our actual situation). The only reason people have problems is because private lenders don’t offer similar terms. It’s not the government loans that are the problem, just talk to your loan servicer and be honest about your financial situation, there are plans with $0 per month payments so long as you don’t have the income to cover it.
Don’t take out private loans, just don’t.
But for all the folks who want to cast stones at people who took out private loans at immoral rates when they were 18, take a good long look at what the national economy is really like for the millions who are unemployed or underemployed. Many people with bad credit are not bad people, and there are few of us who are not one illness or accident away from bad credit. Default on any debt is an option and I don’t see why student debt ought to impose a greater obligation than say corporate debt.
Paying down $100k at current student loan interest rates in 10 years would cost us $3,000 a month. Given that the median income for college graduates is about $45k/annum, that would leave us with about 20% of our predicted income for all of our expenses. So we went on an income-based repayment plan for 300 months that sets our payments at about $320 per month in total (given our actual situation). The only reason people have problems is because private lenders don’t offer similar terms. It’s not the government loans that are the problem, just talk to your loan servicer and be honest about your financial situation, there are plans with $0 per month payments so long as you don’t have the income to cover it.
Don’t take out private loans, just don’t.
But for all the folks who want to cast stones at people who took out private loans at immoral rates when they were 18, take a good long look at what the national economy is really like for the millions who are unemployed or underemployed. Many people with bad credit are not bad people, and there are few of us who are not one illness or accident away from bad credit. Default on any debt is an option and I don’t see why student debt ought to impose a greater obligation than say corporate debt.
6
That is exactly the problem. And the private debt still unpaid increases many fold, what with high interest and all sorts of additional fees. And those banks and people involved with student loans have made billions, while the students are looking at debt they simply cannot repay given the salaries they are making. The ability to declare bankruptcy and start over is allowed everyone else except those who have student loans. This is bad both for the former students and the economy in general.
"...people who took out private loans at immoral rates when they were 18...look at what the national economy is really like for the millions who are unemployed or underemployed." Hmm, how many of you student loan folks voted for Obama, and continue to think that having to pay your debt is just downright unfair???
At 74 I find this story interesting. My mother was a immigrant from Sweden and left 4 siblings behind. All my life i have heard how we live in the "best country in the world" And all my life i have known that it is not true. My distant cousins all have had a better life than I had. They have both free education and fear health care while we have an endless succession of wars.
How long will it take for us to wake up to the fact that by destroying individuals we are destroying the country. We are moving toward the status of a third world country.
The problem is not loans or repayment. It is a lack of foresight on the part of government to see beyond the present into the long term future, to take into account the success of the GI Bill.
How long will it take for us to wake up to the fact that by destroying individuals we are destroying the country. We are moving toward the status of a third world country.
The problem is not loans or repayment. It is a lack of foresight on the part of government to see beyond the present into the long term future, to take into account the success of the GI Bill.
7
Why is it that the programs that brought the baby boomers into financial freedom and the middle class are the same programs that the boomers now cry that we can't afford. They recieved an affordable education, generous terms for their home loans, social security (something my generation will never see), and plenty of safety nets that helped them along with any slip ups. So what? You got yours and now to heck with the rest of us? An affordable education is the heart of what made generations before mine great. Why take that away? Why do the boomers consitently through the legislation they support and the political party they come out in droves to vote for send the message that they have completely forgotten the advantages they recieved and at the same time want to tell us, "hey, personal responsibility man."
3
Not all boomers are into regressive thinking. I am just as mystified as you are as to why some do, and I am a boomer. Greed and envy, I think.
I have been a great, involved parent. I have a 21 year old with the emotional sensibilities of a 10 year old - which is not my fault. Since she was a child, every announcement she made that started with "I don't like this" was enough to trigger massive efforts on my part to read the literature, find multiple palatable solutions she liked. Didn't like math, science, home work, getting up early, working after school . . . The announcement of "I want . . . " produced a similar flurry.
I encouraged her to pursue her passion in College (for sitting in classrooms that were fun). Where hands were held, feelings were discussed. It is not my fault that every math and science teacher just plain ignored what she had to say (why couldn't she use 4 for the pi-constant? What about how she feels about the mitochondria?).
Are you now telling me she cannot become what she wants? A ballerina, a runway model, a TV personality by age 30? As a good parent, I fought on her behalf with teachers, and now with professors ("do you know how much money I am sending your college every semester?").
What on earth are you crying about now? Parenting is hard. You have no idea. When she defaults on her loans, and then on her life - don't blame me. If you can bail out big banks, . . .
And look at you, you would rather bomb a country, than take care of my child. Once you become aware of your social responsibility . . . .
I hope that clears it up. Now shut up and pay me. Kalidan
I encouraged her to pursue her passion in College (for sitting in classrooms that were fun). Where hands were held, feelings were discussed. It is not my fault that every math and science teacher just plain ignored what she had to say (why couldn't she use 4 for the pi-constant? What about how she feels about the mitochondria?).
Are you now telling me she cannot become what she wants? A ballerina, a runway model, a TV personality by age 30? As a good parent, I fought on her behalf with teachers, and now with professors ("do you know how much money I am sending your college every semester?").
What on earth are you crying about now? Parenting is hard. You have no idea. When she defaults on her loans, and then on her life - don't blame me. If you can bail out big banks, . . .
And look at you, you would rather bomb a country, than take care of my child. Once you become aware of your social responsibility . . . .
I hope that clears it up. Now shut up and pay me. Kalidan
1
your child does not have to go to college. It sounds like she could make a living in the trades or via military service. You need, as a parent, to make that clear to her. It is not up to other taxpayers (who have our own kids to worry about).
There are two issues in this situation. The first is that Mr Siegal is a deadbeat. If he was in any line of work other than being a writer, there probably would have been some ramifications for not paying his loans. The second issue is that the college/university system has been corrupted with money, just like everything else in this country. So if a kid wants to go to college they have to deal with this monster. The local University has made some interesting comments recently, such as: we are recruiting foreign and out of state students (out of state tuition, you know), we are building up the amenities, again, so the kids can have a nicer work out center and coffee bar, we don't want any kids from Hibbing because they are boring ( by the way Bob Dylan, Vincent Bugliosi and Roger Maris are from Hibbing,) we are looking for elites (presumably because they can pay the freight). By the way, this school has been found to have one of the most top heavy administrations in the country. I don't blame the kids for this kind of thinking. Colleges and universities need to take a hard look at what they are doing, because the student loan program may not survive in its present form if the default level keeps growing.
4
A perfectly valid position, as long as no one is owed that debt.
Unfortunately, a number of people have several dogs in that fight: the taxpayers, other students matriculating in those universities whose tuition will increase, the loan companies whose rates to non defaulting students will rise to cover his default.
In short, a group of innocent bystanders who will be picking up the ticket for his deliberately chosen debt from which he will continue to profit.
What's to be done.
First, revoke his degrees. You can't actually grab the sheepskin without a court order, but the universities involved could simply publish, on line, a list of individuals whose degrees are no longer valid. This, of course is no more than an inconvenience unless someone requires a degree for employment, not always the case. Now what?
The solution is, as almost always the case, a simple one.
The IRS. The only government organization able to strike terror into the most hardened hearts. Simply add the student loan repayments on to this simpleton's tax bill and put it into collection.
Have you ever tried to reason with the IRS? I haven't and I have lived my life with one goal alway before my eyes: don't screw with the IRS.
I know several people who tried and their failure makes the Game of Thrones look like the works of the Brothers Grimm.
So feel free to ignore your responsibilities, but be very carful when you answer the door.
Unfortunately, a number of people have several dogs in that fight: the taxpayers, other students matriculating in those universities whose tuition will increase, the loan companies whose rates to non defaulting students will rise to cover his default.
In short, a group of innocent bystanders who will be picking up the ticket for his deliberately chosen debt from which he will continue to profit.
What's to be done.
First, revoke his degrees. You can't actually grab the sheepskin without a court order, but the universities involved could simply publish, on line, a list of individuals whose degrees are no longer valid. This, of course is no more than an inconvenience unless someone requires a degree for employment, not always the case. Now what?
The solution is, as almost always the case, a simple one.
The IRS. The only government organization able to strike terror into the most hardened hearts. Simply add the student loan repayments on to this simpleton's tax bill and put it into collection.
Have you ever tried to reason with the IRS? I haven't and I have lived my life with one goal alway before my eyes: don't screw with the IRS.
I know several people who tried and their failure makes the Game of Thrones look like the works of the Brothers Grimm.
So feel free to ignore your responsibilities, but be very carful when you answer the door.
Is it possible we could simply cut the order of a few billion dollars of weaponry and simply give our citizens whatever education is available that interests them?
Lets turn them into taxpayers instead of interest payers.
Lets turn them into taxpayers instead of interest payers.
All of this overlooks the real problem. In a competitive market, the transaction is policed by the buyer and the seller, each of whom has full information on what they are giving and getting. With education, LIKE HEALTHCARE, the buyer cannot determine the value of what he or she is getting, the seller's motives are to hide the real value of the product (i.e., a college degree in popular culture or a medical treatment of questionable effectiveness), the buyer is not sufficiently sophisticated to determine the value (a job that government could do, just as the SEC forces disclosure of material information on secutities---then you are on your own), and a payer that is not the buyer, the government. The third party payor benefits because those in control of its resources, Congress and the bureaucracy, cement their own economic positions to continuing to provide it, at least in terms of propaganda (the tab does come much later....the student loan bill or the uncovered medical expenses), keeping them in power.
The same mechanism that keeps our educational system encumbered by mediocrity suffocates our health care system.
And the providers of the services benefit as well. Note the concentration in power of the big hospitals and insurers after the ACA? See any similarities int he endowments of the colleges and universities, higher income of faculty, and trimming cost of providing true learning (i.e., adjuncts).
All from a government looking out for you.
The same mechanism that keeps our educational system encumbered by mediocrity suffocates our health care system.
And the providers of the services benefit as well. Note the concentration in power of the big hospitals and insurers after the ACA? See any similarities int he endowments of the colleges and universities, higher income of faculty, and trimming cost of providing true learning (i.e., adjuncts).
All from a government looking out for you.
The Problem is too many stupid people borrow to much money and will never be able to pay it back
Call it what you want I will lend these fools nothing
Call it what you want I will lend these fools nothing
1
Seems to me that selecting a college is both an educational and financial decision. If the student can't take both into consideration, he or she may be too immature (or selfish) to be a participant in the decision. Taking the financial aspect into consideration in making the decision is a mark of maturity. That's what we want to see in our children.
1
on the contrary, if an enormous number of student loan borrowers organized and pursued these tactics, i can practically guarantee political effectiveness.
if student loans are really a good investment, the private market will fund them.
i predict that the private market would condition loan terms on field of study and GPA.
and by the way, whoever is investing in the job creators may want to move their investments elsewhere.
if student loans are really a good investment, the private market will fund them.
i predict that the private market would condition loan terms on field of study and GPA.
and by the way, whoever is investing in the job creators may want to move their investments elsewhere.
2
"i can practically guarantee political effectiveness."
yes, the whole student loan system will collapse. hence those who major in marketable fields (or the fortunate) will not be able to obtain such loans and, in turn, will not be able to study. Good strategy.
yes, the whole student loan system will collapse. hence those who major in marketable fields (or the fortunate) will not be able to obtain such loans and, in turn, will not be able to study. Good strategy.
Those who take the view that default on debt is theft misunderstand the social utility of this for companies, countries, individuals to be able to make a new start. Walking way from a home mortgage "under water" makes much sense. Repossession of the car can make sense.
Oh, but student debt is something different! You can't walk away, you can't bankrupt! THis is cruel and foolish.
Why is the economy limping along? Because a whole generation is burdened with a weight that prevents mobility, prevents home buying, new household formation, and will blanket the economy for three or four decades.
Along about 2023 the Congress will figure this out and bills will pass to wipe out this foolish foolish indebtedness to free up the economy
Oh, but student debt is something different! You can't walk away, you can't bankrupt! THis is cruel and foolish.
Why is the economy limping along? Because a whole generation is burdened with a weight that prevents mobility, prevents home buying, new household formation, and will blanket the economy for three or four decades.
Along about 2023 the Congress will figure this out and bills will pass to wipe out this foolish foolish indebtedness to free up the economy
6
Research should be done to identify whether default is a general problem or whether it occurs more often in already troubled strata of our society. Modern college costs seem to make it unlikely that most young people could afford college without substantial aid, even for state schools. There is no good reason why the cost of college should condemn young people to a lifetime of peonage. It makes more sense that the society should bear most of the costs of investing in college for those who qualify, since the future of the society depends upon the ability of each generation to thrive and grow.
5
Hmm. I really do not wish to be required to pay for Mr. Siegel's degrees. Ultimately that's what he wants, is a free ride from taxpayers. Philosophy?? I wonder what sort of grades he had in Ethics.
13
To lower college costs we must get the federal government out of education. If we do you'll see the costs go down.
3
what about state and local governments?
Defaulting on student loans, at least federal ones, also means that you will never be employed by the federal government. It's right up there with 'forgetting' to register for the draft. Once done, can't be corrected.
6
I say this not in defense of defaulting on one's loans, which seems a rather foolish thing to do at the very least, but rather, to point out the hypocrisy that exists in our nation. That is, many legitimate and often, well known businesses get into "debt" (various reasons, but it does usually come down to "can't pay" anymore, be it employees, vendors, etc.) and, quite easily, file for bankruptcy. Furthermore, the often rise from the ashes quite quickly and then move on to do the same old thing again.
American business has the luxury of being able to make bad and stupid decisions, yet not pay for it in the sense that a student who makes an attempt to educate him or herself so as to obtain gainful employment and thus, make money, sometimes finds him/herself in too much debt.
Yet for the individual, the answer is: too bad. I say that knowing quite well that the changes to loan repayment are actually, quite good and helpful, so admittedly, I do not have much sympathy for those who do not repay. Nonetheless, my point, again, is that we live in a country that demands the individual be a Responsible Adult, yet corporate America can basically do whatever it wants, and the CEO, for example, will still walk away with a massive paycheck, even for running the company into the ground, into bankruptcy.
What does that say? Perhaps students should form corporations prior to entering college and take out loans as an "entity"? Hmm. Perhaps I could buy my own debt and...
American business has the luxury of being able to make bad and stupid decisions, yet not pay for it in the sense that a student who makes an attempt to educate him or herself so as to obtain gainful employment and thus, make money, sometimes finds him/herself in too much debt.
Yet for the individual, the answer is: too bad. I say that knowing quite well that the changes to loan repayment are actually, quite good and helpful, so admittedly, I do not have much sympathy for those who do not repay. Nonetheless, my point, again, is that we live in a country that demands the individual be a Responsible Adult, yet corporate America can basically do whatever it wants, and the CEO, for example, will still walk away with a massive paycheck, even for running the company into the ground, into bankruptcy.
What does that say? Perhaps students should form corporations prior to entering college and take out loans as an "entity"? Hmm. Perhaps I could buy my own debt and...
8
Well said.
Revolutions always appear reckless at the beginning.
14
History has, unfortunately (and in general), shown that they actually are reckless in the long term too. Look at the number of revolutions in the last century and what percentage has actually led to a significant improvement over and above the pre-revolutionary period. Not many.
Amen.
One of my positions was the displeasure of working as a senior financial analyst for the U.S. Department of Education, Federal Student Aid Financial Partners. While the students were being charged usurious rates of 9% or higher, as set by Congress, the student lending agencies were reaping tens of millions in 'bonuses' over and above the interest collected for having high rates of collection and minimal defaults. Those of us not in senior management just shook our heads in amazement at the huge amounts of taxpayer dollars being given to the student lenders while some students were being financially crucified. There was no doubt in our minds where the government stood vis-a-vis banks and students - with the lenders. It was whispered that John Boehner was in the pocket of the for-profit schools.
The real key to resolving inequality in America is a good education. Once again, our government has delivered misery camouflaged with high rhetoric and greed rather than fulfilling promise and potential.
The real key to resolving inequality in America is a good education. Once again, our government has delivered misery camouflaged with high rhetoric and greed rather than fulfilling promise and potential.
4
In Libya, education was free through and including college. Oh, wait, that was before Hillary had the country bombed back into the stone age.
the free education, as in most states it is provided free for, accept only a very small percentage of applicants. That is why they can make it free. The overwhelming majority do not, as a result, receive an education.
We have a nation of legislators who believe it is a good idea to deprive public education to finance ball parks the demand that only those with higher education degrees be given living wage jobs.
We are a nation that pays more to jail a 'criminal' than it costs to educate a student.
We are a nation that wants to pay ever less for goods of every description to finance a shrinking take home pay because all of the goods are now made in China.
no wonder we can't afford education for our children. No wonder we see a baby boom generation that is dying in debt.
Mr Siegal is right that this is another broken system and that resistance is appropriate. One form of resistance is to avoid buying from any large company that employs third world workers and supports the Ivy league while starving the former middle class.
Resist, buy small and local.
We are a nation that pays more to jail a 'criminal' than it costs to educate a student.
We are a nation that wants to pay ever less for goods of every description to finance a shrinking take home pay because all of the goods are now made in China.
no wonder we can't afford education for our children. No wonder we see a baby boom generation that is dying in debt.
Mr Siegal is right that this is another broken system and that resistance is appropriate. One form of resistance is to avoid buying from any large company that employs third world workers and supports the Ivy league while starving the former middle class.
Resist, buy small and local.
4
This article is timely. Folks considering "walking" this guys recommended walk need to consider what this means. I'll start by leaving aside his thoughts about pulling credit-worthy others into your mess so to hide behind them. That's just a repugnant idea. I'll also leave aside the merit of some aspects of his argument.
We live in a credit derived social/economic Universe. As such about the only thing as "real" as the corporeal "you" is the credit or economic "you." And in terms of living in today's Universe it's probably more so. Should you contemplate bailing on your debt you need to consider what this means in the context of that Universe. It means living a pay as you go lifestyle. Now I'll acknowledge this is a glib statement. You may think this is easy...and 100 years ago it was the way everyone, or most, lived. But in the context to today's world.....well....let's just say it can be hard. Damn near impossible...especially since you will still fall prone to all the usual human aspirations. Aspirations such as a desire for a family, home, etc.. You will discover that you have castrated yourself in that regard.
So think carefully on that which you (may be) considering. The results will ripple out thru the remainder of your life, and you may not like them all that much. Which is kind'a the impression I got from reading the guys write-up.
John~
American Net'Zen
We live in a credit derived social/economic Universe. As such about the only thing as "real" as the corporeal "you" is the credit or economic "you." And in terms of living in today's Universe it's probably more so. Should you contemplate bailing on your debt you need to consider what this means in the context of that Universe. It means living a pay as you go lifestyle. Now I'll acknowledge this is a glib statement. You may think this is easy...and 100 years ago it was the way everyone, or most, lived. But in the context to today's world.....well....let's just say it can be hard. Damn near impossible...especially since you will still fall prone to all the usual human aspirations. Aspirations such as a desire for a family, home, etc.. You will discover that you have castrated yourself in that regard.
So think carefully on that which you (may be) considering. The results will ripple out thru the remainder of your life, and you may not like them all that much. Which is kind'a the impression I got from reading the guys write-up.
John~
American Net'Zen
'Which brings us to Mr. Siegel’s third piece of advice: Marry well, or at least have a creditworthy partner. '
A creditworthy partner who is also gullible. If Bill or Sue is willing to dump an inconvenient student loan, what's to prevent them from leaving their creditworthy partner in the lurch as well?
One NYT article on betrayal in 2013 mentioned a person who ran up a 6-figure credit card debt w/o his/her partner's knowing about it. Even if the partner isn't on the card itself, he/she can still be affected by either having to assume more financial responsibility for the family finances or face possible bankruptcy or other hardship if unable to make up the difference.
Certainly ill health or a similar event could make repaying student debt impossible, but we are not talking about that here. We are talking irresponsibility - refusing to pay a debt.
People are rarely financially irresponsible in just one area. Anyone who marries or partners with a person who simply walks away from financial responsibilities, which is pretty much what Lee Siegel did, is taking one heck of a risk. Yesterday it was a student loan. Next week it could be paying his/her share of the family expenses or paying them late.
If your romantic interest has an inability to feel shame or remorse about irresponsible behavior, you may be dealing with a sociopath. Look it up.
A creditworthy partner who is also gullible. If Bill or Sue is willing to dump an inconvenient student loan, what's to prevent them from leaving their creditworthy partner in the lurch as well?
One NYT article on betrayal in 2013 mentioned a person who ran up a 6-figure credit card debt w/o his/her partner's knowing about it. Even if the partner isn't on the card itself, he/she can still be affected by either having to assume more financial responsibility for the family finances or face possible bankruptcy or other hardship if unable to make up the difference.
Certainly ill health or a similar event could make repaying student debt impossible, but we are not talking about that here. We are talking irresponsibility - refusing to pay a debt.
People are rarely financially irresponsible in just one area. Anyone who marries or partners with a person who simply walks away from financial responsibilities, which is pretty much what Lee Siegel did, is taking one heck of a risk. Yesterday it was a student loan. Next week it could be paying his/her share of the family expenses or paying them late.
If your romantic interest has an inability to feel shame or remorse about irresponsible behavior, you may be dealing with a sociopath. Look it up.
3
remember, he can hide it from the potential spouse until it is too late. Weisels do that you know.
I know I'm old fashioned (and old) but I always thought that when you made promises you were expected to keep them. If you undertook obligations you were supposed to fulfill them.
I fail to understand how one can borrow money for an education, get the education at the borrower 's expense, and then decide to walk away.
How is this not theft?
And then expect anyone else to trust you? To give you a mortgage? To hire you? I wouldn't hire these clowns to mow my lawn. They'd sell the mower and be outraged if I objected.
Sorry Charlie.
I fail to understand how one can borrow money for an education, get the education at the borrower 's expense, and then decide to walk away.
How is this not theft?
And then expect anyone else to trust you? To give you a mortgage? To hire you? I wouldn't hire these clowns to mow my lawn. They'd sell the mower and be outraged if I objected.
Sorry Charlie.
7
I took out some NDSLs in the early 70s and initially didn't consistently make payments due to a mobile lifestyle and varying employment. I received some debt forgiveness from being in the military. After I did secure a good job I contacted the school to see about paying the loans off. My ex said I was crazy as no one paid back their loans. The school didn't have any records so I contacted the Dept. of Education in Washington D.C., and they put me in touch with someone in Chicago who I could arrange to pay the loans back, which I did.
A few years a friend said that a collection agency from the school was contacting people about me regarding the NDSLs. I contacted them, sent them proof of payment, and didn't hear anything else. A couple of years later a friend said that a collection agency was again about my whereabouts regarding the NDSLs. I sent a letter to the school and the collection agency stating that I had paid off the loans on my own initiative, they were no help in the process, and that if anyone I knew was bothered again I would contact the appropriate federal agency and lodge a complaint. I never heard about the problem again.
My son managed to graduate from college with no debt, but he worked very hard to do so and said that he would not do that again. It would be less expensive for him to attend graduate school in Europe, my wife is German and has a green card in the US, than it would be to attend in the US even with a state residency.
A few years a friend said that a collection agency from the school was contacting people about me regarding the NDSLs. I contacted them, sent them proof of payment, and didn't hear anything else. A couple of years later a friend said that a collection agency was again about my whereabouts regarding the NDSLs. I sent a letter to the school and the collection agency stating that I had paid off the loans on my own initiative, they were no help in the process, and that if anyone I knew was bothered again I would contact the appropriate federal agency and lodge a complaint. I never heard about the problem again.
My son managed to graduate from college with no debt, but he worked very hard to do so and said that he would not do that again. It would be less expensive for him to attend graduate school in Europe, my wife is German and has a green card in the US, than it would be to attend in the US even with a state residency.
#1: Our educational system in the US is falling to pieces at every level. Student debt is most certainly a major part of the downfall and the end results of it will have a dire affect our country's future if it and other issues concerning this crisis continue to be ignored and/or blown off by those with the power to change it.
#2: Mr. Siegel is an unprintable and a horrible and ridiculous advocate on anything concerning the crisis or anything else actually. He comes off as arrogant and his attitude and thoughts leave one to wonder why in the world anyone would want to hire such a dunce. His education was a waste of money. His line of thinking and the choices he has made basically wipes out whatever time he spent in school getting three degrees.
#3: I'm actually baffled by the so many comments condemning the NYT for publishing his piece. I definitely want to know this kind of idiocy is out there, if only to make sure that people realize that his kind of thinking is moronic and wrong. That's what the press is there for. To report, remember? Especially about people like Mr. Siegel, right? They weren't advocating his stupidity, they were publishing it. To educate the public about dangerous thinking like his. They gave us this column as a counter-argument and a very good one I might add. I for one appreciate it.
#2: Mr. Siegel is an unprintable and a horrible and ridiculous advocate on anything concerning the crisis or anything else actually. He comes off as arrogant and his attitude and thoughts leave one to wonder why in the world anyone would want to hire such a dunce. His education was a waste of money. His line of thinking and the choices he has made basically wipes out whatever time he spent in school getting three degrees.
#3: I'm actually baffled by the so many comments condemning the NYT for publishing his piece. I definitely want to know this kind of idiocy is out there, if only to make sure that people realize that his kind of thinking is moronic and wrong. That's what the press is there for. To report, remember? Especially about people like Mr. Siegel, right? They weren't advocating his stupidity, they were publishing it. To educate the public about dangerous thinking like his. They gave us this column as a counter-argument and a very good one I might add. I for one appreciate it.
4
When I was ready to look for colleges, my parents said "either find one that will take you for free or join the military." There were two state colleges in Michigan that awarded students free tuition if they met a certain ACT score, so I went to one of them. My friends who were going to Notre Dame, U of M, and Harvard laughed when I told them where I was going, but I graduated debt free. That college also gave me the background to attend a Ph.D. program for six years tuition free. I did not own a car for ten years, and lived with roommates in apartments and duplexes that did not have amenities like hot tubs, to say the least. When I finally graduated with my Ph.D. I had 8K saved in the bank and several job offers. I love what I am doing now--I am a writer, and I teach writing to wonderful students.
We make our choices, and we should have to live with the consequences. If you choose to take debt, pay it off. Anyone good enough to go to an Ivy League school could have easily chosen a state school and received merit aid. Don't send me the bill for your bad decisions.
We make our choices, and we should have to live with the consequences. If you choose to take debt, pay it off. Anyone good enough to go to an Ivy League school could have easily chosen a state school and received merit aid. Don't send me the bill for your bad decisions.
11
Kevin, well said!!!
He can zig and zag this debt his whole life, but hopefully he realizes they way it will end for him: they garnish it out of his social security check. This is the honest truth. Checkmate.
2
How is access to a bankruptcy court a business issue for those who earn their income from student loan payments and an ethical issue for those lawyers, doctors, teachers and other working people who service them? Lenders who originate student and other loans can try to make their case in bankruptcy court if need be, and former students are barred? It's out of balance economically and ethically.
2
higher education is nothing but business in this country like the pharmaceutical industry -- european students don't have this kind of debt
2
But the workers have higher taxes, which Americans hate.
What is wrong with attending a college or university within one's means to minimize debt? Full-time tuition & fees from 2014/2015: University of Oregon $3,306. Oregon State University $3,040. University of Washington $4,131. Washington State University $12,400. University of Vermont $8,400. Full-time includes 10-18 credit hours; working part-time to cover room and board, one could complete a college degree in roughly 5 years and have reasonable debt to pay off.
3
Americans have bought into the "need" loans for nearly everything in their lives--cars, houses, school, and anything that can bought with the borrowed money of a credit card. We foolishly believe that we can afford something if we can afford the payment (or minimum payment). Yes, college tuition is out of control and student loans are at least partly to blame. But we've GOT to stop teaching Americans from the time they are teenagers that borrowing money to get what you want (versus saving it) is a desirable way of life or the path to upward mobility.
Stop worshipping FICO, for heaven's sake, and start living within your means. Ivy Leagues degrees are not a need, and Mr. Siegel is living proof that they are no guarantor of common sense or ethical behavior.
Go where you can afford, even if it takes longer to get there or get out of there with a degree. Parents, you don't need to be able to pay your child's way to teach them how to (and how not to) go into debt. Hard work isn't just two four-letter words.
Stop worshipping FICO, for heaven's sake, and start living within your means. Ivy Leagues degrees are not a need, and Mr. Siegel is living proof that they are no guarantor of common sense or ethical behavior.
Go where you can afford, even if it takes longer to get there or get out of there with a degree. Parents, you don't need to be able to pay your child's way to teach them how to (and how not to) go into debt. Hard work isn't just two four-letter words.
4
I have never not paid a debt but I think it is justified when a debt system in unethical - as is the case with student loan debt. Our whole economy suffers when a generation carries excessive student debt. The truth is the national economy would be better off if this generation walked away from the debt and forced the system to come up with something better (and more fair).
1
America's approach to inequality is to finance higher education and home ownership through credit markets rather than through cash transfers. Part of the story is free market ideological resistance to taxes and redistribution. The mess results in considerable personal distress--of little concern to creditors--and financial crises like that of 2007-08.
1
When I read Mr. Siegel's piece I thought, "Here's a guy I could never be friends with - he's fundamentally untrustworthy." Anybody who unilaterally decides that they got themselves in a jam so they are going to stick it to the other guy, is not someone I want to be around. And to put icing on the cake, he tells others how they can stick it to the other guy, too.
Thanks Mr. Lieber for providing some sanity and responsible discussion to the issue.
Thanks Mr. Lieber for providing some sanity and responsible discussion to the issue.
3
I commented a couple of times about the dubious nature of Mr. Siegel's story. None of tjose comments passed moderation, unreasonably.
Siegel claims his first loan was taken out when he was aged 17, 40 years ago. Conveniently, that makes Siegel the same age as I am, and 39 years ago, the cost of college was not enough to make a taker of student loans have any good reason to default. 40 years ago, the cost of attendance at the *most expensive* school in the country was well under $10,000/year.
Further, back then, student loan rates were subsidized and below market, and interest paid was tax deductible. My wife went to NYU undergrad and Columbia Dental School, and graduated with *total* student loans of $10,000, which we paid off in ten years. She graduated Dental School in 1983.
Siegel's story of crushing student debt accumulated from 40 years ago to 30 years ago simply does not stand close scrutiny from one who was in college at the time.
Remember that Siegel is also supposedly writing a book on the subject. According to the public records, Mr. Lieber, how much DID the house that Mrs. Siegel cost, anyway? Was it enough to tar him with an accusation of hypocrisy? Wouldn't surprise me in the least...
Siegel claims his first loan was taken out when he was aged 17, 40 years ago. Conveniently, that makes Siegel the same age as I am, and 39 years ago, the cost of college was not enough to make a taker of student loans have any good reason to default. 40 years ago, the cost of attendance at the *most expensive* school in the country was well under $10,000/year.
Further, back then, student loan rates were subsidized and below market, and interest paid was tax deductible. My wife went to NYU undergrad and Columbia Dental School, and graduated with *total* student loans of $10,000, which we paid off in ten years. She graduated Dental School in 1983.
Siegel's story of crushing student debt accumulated from 40 years ago to 30 years ago simply does not stand close scrutiny from one who was in college at the time.
Remember that Siegel is also supposedly writing a book on the subject. According to the public records, Mr. Lieber, how much DID the house that Mrs. Siegel cost, anyway? Was it enough to tar him with an accusation of hypocrisy? Wouldn't surprise me in the least...
7
Yeah, I wondered about this too, as well as whether he had any fellowships or TA-ships as a grad student, how much did he borrow, how much was his rent/living expenses, why he got two master's degrees, etc. Back then state tuition was almost free. (UC Berkeley's fees in the mid 70's were $600/year, and still only $1200 or so when I started college in 1986.)
I have a lot of sympathy for kids and parents nowadays, and agree the system is broken, but people like Siegal are just muddying the discussion
I have a lot of sympathy for kids and parents nowadays, and agree the system is broken, but people like Siegal are just muddying the discussion
I read Mr. Siegel's piece last week with great interest, as did many others, apparently. The whole issue is a trap; you need an "education" to be taken seriously in this country, yet when you get one - and perhaps get a decent one - and then try to find a job commensurate with your educational worth, you can't find one that pays well enough to be able to pay anything substantial back. I haven't defaulted and have always been in contact with the Dept of Education according to my circumstances, but to say that if you DON'T default, your credit is better is off is bogus. If you have student loans, you can't get another loan anyway, whether you're a good payer or not. I've tried and I know. I could never buy a house. So whether you default or not, it appears to add up to the same result. The system is being strangled by itself, and so might the US economy be strangled if this higher educational model is allowed to continue. And I suspect we don't want a country of uneducated people because we can't afford that, either.
4
Well said. Thank you.
Community colleges are also "colleges," where you can earn a two-year degree with skills to enter the workforce, or use that degree as the first half of a bachelor's degree by transferring.
I serve on the governing board of a community college that charges $68 per credit hour with a variety of discounts and tuition scholarships. Summer classes are half price. The final 12 credits of a 64-credit degree are tuition free. Juniors and seniors in high school can take 7 credits per semester tuition free. Students who have just graduated from high school get 12 tuition-free credits that summer. If a student in my community makes higher education a priority, they could earn the first half of a bachelor's degree for less than $1,000 in tuition. Our college does not participate in the federal loan program; we are affordable without loans. Tuition alone at one of our three state universities is now over $10,000 for one year. Why take out loans when community colleges are the low-cost option?
If you want or need a bachelor's degree, go for it, but consider doing your first two years where you can save literally tens of thousands of dollars. And remember that approximately 30 percent of college freshmen do not return for their sophomore year (at any college). When choosing to go to college, understand why you want to go and what's the best fit for you, including the financial fit.
I serve on the governing board of a community college that charges $68 per credit hour with a variety of discounts and tuition scholarships. Summer classes are half price. The final 12 credits of a 64-credit degree are tuition free. Juniors and seniors in high school can take 7 credits per semester tuition free. Students who have just graduated from high school get 12 tuition-free credits that summer. If a student in my community makes higher education a priority, they could earn the first half of a bachelor's degree for less than $1,000 in tuition. Our college does not participate in the federal loan program; we are affordable without loans. Tuition alone at one of our three state universities is now over $10,000 for one year. Why take out loans when community colleges are the low-cost option?
If you want or need a bachelor's degree, go for it, but consider doing your first two years where you can save literally tens of thousands of dollars. And remember that approximately 30 percent of college freshmen do not return for their sophomore year (at any college). When choosing to go to college, understand why you want to go and what's the best fit for you, including the financial fit.
3
It will be just like those who defaulted on their mortgages during/after the crash. Socially and eventually financially, no one will hold it against them. Because the whole student loan idea was a ridiculous proposition, set up to take advantage of people and to make Wall Street and bankers rich.
2
and to leave taxpayers with the tab. They should all work harder to finance student loan borrowers who have gone broke.
Corinthian For Profit College - Promoting a degree and refusing to deliver. How about an expose on the legislation and the legislators who created the student debt debacle. I understand the concept of buyer beware. At what age does society expect to hold the buyer responsible? Let's see, driving 16, sex?, rent a car 21?, alcohol 21, gambling in Vegas?, $25,000 to $200,000 in student debt? Heck if I know but it sure feels wrong when the seller is a for profit corporation with shareholders who expect a steady return on the backs of our youth.
Lee Siegel's brazen course of action mainly demonstrates that two wrongs don't make a right. Siegel was clearly wrong, especially since his default was a calculated choice rather than an inability to meet his obligation.
But the ensuing discussion spotlights a larger wrong: In other countries, governments provide higher education at little or no cost to students, in the belief that it's a good investment in the nation's future prosperity. In the United States, despite the dogmatic belief that higher education is a necessary prerequisite to "success," it's a privilege for the wealthy. Those who are not wealthy must effectively enter indentured servitude to lenders.
Although this article points out the many serious consequences of default, there are also serious consequences to remaining in indentured servitude. Someone who has low-income employment, whether by choice or circumstances, will have a lifelong debt burden that can't be relieved by bankruptcy, or sometimes not even by death. That burden may itself impair the ability to get a better-paying job. "Morality" aside, is that really better than the consequences of default?
It's also worth noting the uniform condemnation Siegel received for choosing to default. But executives of corporations that deliberately use bankruptcy as a strategic tool to rid themselves of burdensome union contracts and employees receive plaudits from Wall Street and bonuses for "unlocking shareholder value." Are they leading by example?
But the ensuing discussion spotlights a larger wrong: In other countries, governments provide higher education at little or no cost to students, in the belief that it's a good investment in the nation's future prosperity. In the United States, despite the dogmatic belief that higher education is a necessary prerequisite to "success," it's a privilege for the wealthy. Those who are not wealthy must effectively enter indentured servitude to lenders.
Although this article points out the many serious consequences of default, there are also serious consequences to remaining in indentured servitude. Someone who has low-income employment, whether by choice or circumstances, will have a lifelong debt burden that can't be relieved by bankruptcy, or sometimes not even by death. That burden may itself impair the ability to get a better-paying job. "Morality" aside, is that really better than the consequences of default?
It's also worth noting the uniform condemnation Siegel received for choosing to default. But executives of corporations that deliberately use bankruptcy as a strategic tool to rid themselves of burdensome union contracts and employees receive plaudits from Wall Street and bonuses for "unlocking shareholder value." Are they leading by example?
3
Lee Siegel comes across as spoiled and entitled. I don't like the idea of students following his example. BUT some reforms are essential:
1. States have to go back to supporting their state universities. I'm lucky enough to have benefited from the free-tuition days at CUNY and low tuition for a graduate degree from SUNY. There should be an alternative to borrowing up to one's ears.
2. Student loans should be discharged in bankruptcy.
3. Especially important given the number of people over 40 who have gone back to school in the recent economy: Social Security checks should NOT be garnished for student loans or any other reason.
4. Repayment plans must be tied to income. Young teachers, social workers, etc. should not be expected to pay at the same rate as lawyers and Wall Street types.
1. States have to go back to supporting their state universities. I'm lucky enough to have benefited from the free-tuition days at CUNY and low tuition for a graduate degree from SUNY. There should be an alternative to borrowing up to one's ears.
2. Student loans should be discharged in bankruptcy.
3. Especially important given the number of people over 40 who have gone back to school in the recent economy: Social Security checks should NOT be garnished for student loans or any other reason.
4. Repayment plans must be tied to income. Young teachers, social workers, etc. should not be expected to pay at the same rate as lawyers and Wall Street types.
2
I read both articles and I don't know how I missed the first one, but my summation is that Mr. Siegel is a low-life and his "tips" are entirely absurd. No two situation are the same and being a scam artist is not a trait all are born with. I truly can't believe that in this day and age, I had to read this. Out of all the things the government does wrong, this is one where they are right and never ever, should student loans be forgiven. Just be thankful you all had the opportunity to even attend a college. What you choose to study is a personal choice.
3
I am waiting for Congress to pas a bill allowing colleges and universities repossess degrees of those who let their loan payments default. It would be called an incentive. The flip side might be that colleges that issuue useless degrees cannot use debt collectors or sell the debt znc fraud is a defense against future payments.
Lee Seigel is, in his own words, a deadbeat. Not only that, I believe he he is also amoral and essentially a sociopath.
He took out his first loan in 1975. There was no crisis, no spiraled out of control costs or predatory lending back then. He did not want to pay his loans back, as he felt he should spend his money on himself rather than his debts and obligations. Now he is using the current crisis to justify his actions, which absolutely in no way is connected to what is going on with students recently.
So decide for yourself what kind of person he is....
He took out his first loan in 1975. There was no crisis, no spiraled out of control costs or predatory lending back then. He did not want to pay his loans back, as he felt he should spend his money on himself rather than his debts and obligations. Now he is using the current crisis to justify his actions, which absolutely in no way is connected to what is going on with students recently.
So decide for yourself what kind of person he is....
2
Mr. Siegel isa massive fraud. Maybe achool is way over priced today however, if you read cloaely, he went to school decades ago. I did too. College was far more reasonable then. His loans probably amounted to a fancy car or two. Had he tried he certainky could have paid off thw loans. He never unteneded too. He has no morals and is a leach on society.
Don't confuse his loans with what is goung on today. Different timea, different circumstances.
Don't confuse his loans with what is goung on today. Different timea, different circumstances.
6
well said. today education is many times more expensive than 20-30 years ago. I feel sorry for the young.
This in response to this and last week's opinion article. Ms. Siegel is acting as if she is entitled to her education and to pursuing a career as a writer. She is NOT entitled to either. She must work and earn the RIGHT to both. I too come from modest means on the other side of the tracks. I could not afford the Ivy League school I was accepted into ( half scholarship not withstanding) and opted instead for a state school. With workstudy, pell grants, scholarships and just one loan I graduated with minimal debt. All of which I paid back in short order with a teaching salary of $12,000. Graduate school cost more, but was funded in part by fellowships. I returned to teaching and paid that debt off. Now, I am a professional in a vibrant field in te arts and writing remains a key part of my work. Sadly, sometimes, I did not become a novelist. My advise to Ms. Siegel and others is make a financial decision based on your means and then use your talent and work ethic to take you above the fray. You are entitled to nothing. Work for it.
2
The interest rates on student loans - 6.8% - mean than over time students pay them down many times over. Interest by definition means extra money due but accusing people of being deadbeats when they have paid, say, twice the value of their loan and then stop paying?
A bit over the top. The loans generate profits for the government, way beyond what is reasonable.
Taxpayers indignant that they are 'on the hook' for truculent students are gleaning profit from the system. Not a fair deal on either end...
A bit over the top. The loans generate profits for the government, way beyond what is reasonable.
Taxpayers indignant that they are 'on the hook' for truculent students are gleaning profit from the system. Not a fair deal on either end...
2
One of the reasons the housing market hasn't recovered to where it was 10 years ago is the overhang of student debt. College graduates should be prime candidates for homes, but instead they are living with relatives or renting. I hope the next president will unleash this pent up demand, although I fear Hillary favors the lenders who paid for her speaking engagements and foundation.
LA Times reports Elon Musk has already received 5.9 billion in government aid and last week Gov. Cuomo announced another billion for Elon Musk. Wish government had the same love for students that it has for billionaires but quoi de neuf.
LA Times reports Elon Musk has already received 5.9 billion in government aid and last week Gov. Cuomo announced another billion for Elon Musk. Wish government had the same love for students that it has for billionaires but quoi de neuf.
3
I agree with the reader who chided The New York Times for publishing Mr. Siegel's flawed "essay." Not only did the piece leave out how much he owed, but it also did not detail exactly how he was affected or how the typical defaulter would be affected by comparable irresponsible and dishonest behavior. Kudos to Ron Lieber for his column. I was waiting for someone to point out Mr. Siegel's omissions.
2
I do wish that Lee Siegel would clarify why he continues to remain in default now that he seems to have ample resources to pay. Yet, despite my fundamental disagreement with the idea of flagrantly blowing off debts, I found myself cheering him on. Personally I lack the guts and stamina to dodge my bills. It's the equivalent of living underground. But ever since the "too big too fail" episode that led to the mass bailouts, I am much more sympathetic to the average person who says "screw it".
Granted, Mr. Siegel is not the best poster child for "average" with his ivy league education and upper crust credentials. He almost seems to be having fun with it all now, flaunting his status and giving tutorials on how ditching your loan is as easy as 1-2-3. This is a painful, serious, and crippling choice for most people.
Granted, Mr. Siegel is not the best poster child for "average" with his ivy league education and upper crust credentials. He almost seems to be having fun with it all now, flaunting his status and giving tutorials on how ditching your loan is as easy as 1-2-3. This is a painful, serious, and crippling choice for most people.
24
Exactly -- you are correct on every count. I am glad to see others take Siegel to task including in this column.
I found myself cheering him on
Cheering him on ............... would you be cheering him on if he were robbing jewelry stores, what is exactly the same thing as not paying back a debt. Stealing is taking something that is not yours. A student loan is not a gift, it is someone else's money that you promise to payback. It seems that to many people the keeping of a promise is an old fashion idea that does not fit into their new lifestyle. The only thing keeping you from taking someones money (student loan) and not repaying it is not a moral belief in doing what is right, no it is that as you say 'Personally I lack the guts and stamina to dodge my bills". Doing the right thing for the wrong reason does not make you a moral person.
It would be nice if someday you loan someone $40,000.00 and then they decide not to pay you back, saying 'you don't deserve your money back, because I don't like the way you earned your money, or 'your interest is too high', or just plain 'screw you'' and then see how you feel about this subject.
Cheering him on ............... would you be cheering him on if he were robbing jewelry stores, what is exactly the same thing as not paying back a debt. Stealing is taking something that is not yours. A student loan is not a gift, it is someone else's money that you promise to payback. It seems that to many people the keeping of a promise is an old fashion idea that does not fit into their new lifestyle. The only thing keeping you from taking someones money (student loan) and not repaying it is not a moral belief in doing what is right, no it is that as you say 'Personally I lack the guts and stamina to dodge my bills". Doing the right thing for the wrong reason does not make you a moral person.
It would be nice if someday you loan someone $40,000.00 and then they decide not to pay you back, saying 'you don't deserve your money back, because I don't like the way you earned your money, or 'your interest is too high', or just plain 'screw you'' and then see how you feel about this subject.
Something else to consider: If you default, you may not be able to obtain a professional license. Here in NJ, one cannot become a registered nurse until you provide evidence of payment arrangements to pay any student loan you have defaulted on. The relevant section of the application states:
"Are you in default in regard to any student loan obligation(s)? Yes No
If “Yes,” you must obtain documentary evidence that you have reached an arrangement with the bank or with the entity that issued your student loan, for the eventual repayment of the loan. You will not be able to obtain a license or certificate unless you provide the required documents concerning the plan for repayment of your student loan." http://www.njconsumeraffairs.gov/nur/Applications/RN-and-LPN-Licensure-b...
And of course, if you can't become an RN, you can't become an Advanced Practice Nurse (i.e., nurse practitioner), either, because one must be an RN in order to be an APN.
It wouldn't surprise me if other professions have the same requirement or even stricter ones. CPAs come to mind. The ramifications of defaulting may not be so obvious at the time, but default can indeed come back to haunt you.
"Are you in default in regard to any student loan obligation(s)? Yes No
If “Yes,” you must obtain documentary evidence that you have reached an arrangement with the bank or with the entity that issued your student loan, for the eventual repayment of the loan. You will not be able to obtain a license or certificate unless you provide the required documents concerning the plan for repayment of your student loan." http://www.njconsumeraffairs.gov/nur/Applications/RN-and-LPN-Licensure-b...
And of course, if you can't become an RN, you can't become an Advanced Practice Nurse (i.e., nurse practitioner), either, because one must be an RN in order to be an APN.
It wouldn't surprise me if other professions have the same requirement or even stricter ones. CPAs come to mind. The ramifications of defaulting may not be so obvious at the time, but default can indeed come back to haunt you.
11
The taxpayers paid for my degrees, it was called the Korean War Veterans GI Bill.
4
Good thing you survived the war then.
Can we just go back to the part where "parents stand idly by?" That's the crux of the entire problem. Those parents have enabled this brat behavior from day one, and have relinquished their parental responsibility for teaching their spawn that you need to manage your money and pay your debts. Period.
11
Wow you sound quite judgmental. 'Brat' and 'spawn'? One could easily think you were speaking of creatures other than humans.
There are more factors at play than parents in the stories of many people who took out student loans.
There are more factors at play than parents in the stories of many people who took out student loans.
1
And yet the NYT published Siegel's preposterous oped which has probably already given some impressionable people the dumb idea that default on student debt is relatively cost free. Quite apart from the individual consequences, if large number of people followed his advice it would raise the cost of credit for everyone, in fact he's already done it in a small way. It later transpired that this jerk has an undergraduate degree and two masters degrees from a very prestigious and expensive ivy league college. Of course all the nihilists loved the anarchic message he was preaching but then their contact with reality is somewhat tenuous.
63
Boffo comment, John from Hartford.
Mr. Siegel's whine was hard to read. What entitlement!
It is interesting to me that the solutions proposed by Democrats for the poor suckers "stuck" with student debt (that is, walking away from a contract), and particularly proposed by those running for President, is to take more tax dollars and forgive these debts. That is what this brand of politicians do - confiscate other people's money, forgive their voters and pat themselves on the back for their largesse.
You will never hear the progressive smarties suggest that universities and colleges lower their tuitions, cut staff, limit the amount the scholarships that they offer that do NOT use the US tax payer to back it up. You know, a little austerity.
As long as the US tax payer is the payer of last resort, Democrats will complain about that fact when it comes to the Wall Street bankers but not the smart schools on the coasts, particularly the East Coast.
Nothing is for free. But if you can sell that, you are a real liberal.
Mr. Siegel's whine was hard to read. What entitlement!
It is interesting to me that the solutions proposed by Democrats for the poor suckers "stuck" with student debt (that is, walking away from a contract), and particularly proposed by those running for President, is to take more tax dollars and forgive these debts. That is what this brand of politicians do - confiscate other people's money, forgive their voters and pat themselves on the back for their largesse.
You will never hear the progressive smarties suggest that universities and colleges lower their tuitions, cut staff, limit the amount the scholarships that they offer that do NOT use the US tax payer to back it up. You know, a little austerity.
As long as the US tax payer is the payer of last resort, Democrats will complain about that fact when it comes to the Wall Street bankers but not the smart schools on the coasts, particularly the East Coast.
Nothing is for free. But if you can sell that, you are a real liberal.
NYT may be thinking that impressionable people have short attention spans anyway, so they'd forget Mr. Siegel's advice. Still, it was an irresponsible decision. Presumably, the NYT thinks the likes of Mr. Siegel needs valuable real estate to preen in self-obsessed narcissistic behavior, while touting their intellectual credentials as a liberated thinker. If I were to borrow money from Mr. Siegel, I doubt he'd give me a break if I refuse to pay. Better yet, let Mr. Siegel ask the NYT op-ed editors who gave him the forum for, say, a $100,000 loan. I'd be curious to know how Christ-like in charity the editors will be when he tells them, "Go, fly a kite. You're not getting it back."
The student loan program became indirect aid to colleges paid for by students. Colleges administered the eligibility standards for the feds and with this bonanza of paying customers coming through the door started increasing tuitions out of all proportion to inflation - indeed most engaged in massive (and usually unnecessary) building programs. As a result the cost of the degrees are not worth the earning potential of the graduates.
The recession not only brought moral hazard when Wall Street gamblers had their losses covered by the taxpayers, but it also destroyed the jobs that the students depended upon to pay the debts back. Now, whatever you think of student debt forgiveness, this debt is a serious drag on the economy and is hurting everyone. Young people just cannot get married and buy a home - one of the traditional engines of the US economy.
Later marriage, fewer babies, few home purchase and all the attendant furnishing purchases will take its toll on everyone. Don't blame irresponsible students without blaming greedy colleges and universities.
The recession not only brought moral hazard when Wall Street gamblers had their losses covered by the taxpayers, but it also destroyed the jobs that the students depended upon to pay the debts back. Now, whatever you think of student debt forgiveness, this debt is a serious drag on the economy and is hurting everyone. Young people just cannot get married and buy a home - one of the traditional engines of the US economy.
Later marriage, fewer babies, few home purchase and all the attendant furnishing purchases will take its toll on everyone. Don't blame irresponsible students without blaming greedy colleges and universities.
54
Or stupid government. The loans need to be liquidated and eliminated. Make some new opportunities for students to earn money for college in majors that are needed and can support the investment. Little to no "liberal arts" degrees after all a college degree includes a dose of such in every degree. What we need is a mandatory dose of Math, Science, and tech in every degree.
The real issue here is that schools way overcharge, way over promise, and way under deliver.
31
The real issue? Then go to another (cheaper) college. Go to a state college in your own state, buy used textbooks, study instead of partying, and stay at your parents house. The costs will drastically decrease.
or that many students expect way too much, are under qualified and major in fields that have limited marketability.
Thank you for writing this column. The relentless celebration by the NY Times of people who refuse to pay their student loans is sad. I guess it's not news went someone actually pays off their loans. Indeed the string of op eds and editorials celebrating refusal to pay or loan forgiveness as good policy make those of us who actually pay our loans (and that's the majority of borrowers) feel like schmucks.
People should schedule their loans on Tuition.io or some other similar website and work every day to become debt-free as soon as possible.
Maybe every time the government forgives a loan it should randomly pick someone who is current on their loans and forgive their loans too.
People should schedule their loans on Tuition.io or some other similar website and work every day to become debt-free as soon as possible.
Maybe every time the government forgives a loan it should randomly pick someone who is current on their loans and forgive their loans too.
27
You are so right! My husband and I worked for many years to pay off our loans, he had tremendous debt from dental school. Then instead of living better after the loans were paid off we started saving for our kids, so they could go to college without having to suffer as we did. State schools, however. Boy, do we feel like chumps now. All that living below our means and paying off our bills and saving!
TYPO in my proposed comment "went" should be "when"
1
We have indeed become a nation of whiners.
People borrow money for things they cannot afford, then insist they were somehow 'victimized' and forced to (pick one) take out a mortgage for houses they knew they could not afford; take out a car loan for a car they knew they could not afford; take out student loans that they knew they could not afford.
In all cases, the borrowers never read the actual contract or, in the case of a mortgage, hired an attorney to do so on their behalf.
What everyone who defaults does do is to point fingers at everyone but themselves and put their hand out to the taxpayers to pay for their ill-advised debts.
Slippery slope indeed.
People borrow money for things they cannot afford, then insist they were somehow 'victimized' and forced to (pick one) take out a mortgage for houses they knew they could not afford; take out a car loan for a car they knew they could not afford; take out student loans that they knew they could not afford.
In all cases, the borrowers never read the actual contract or, in the case of a mortgage, hired an attorney to do so on their behalf.
What everyone who defaults does do is to point fingers at everyone but themselves and put their hand out to the taxpayers to pay for their ill-advised debts.
Slippery slope indeed.
81
What if they should point their finger at someone else? Maybe their college? What if their college misled them about what an education really is? Who is responsible? The eighteen year old who thinks, wow, college isn't as hard as I thought it was? How is he/she supposed to know what an education is? What needs to be learned? The twenty one year old who really believes that he/she needs a masters, when the reality is that they didn't get what they paid for in the first place?
What if you go to a doctor who says, "Don't worry, no chemotherapy, no pain, you're cured." Who is responsible?
What if you go to a doctor who says, "Don't worry, no chemotherapy, no pain, you're cured." Who is responsible?
They point fingers at everyone but themselves, put their hand out, and vote Democrat
In France, education is limited by the ability to qualify for admissions. My daughter-in-law was from Paris. The ONLY college she could apply to was La Sorbonne. Admissions was based on a series of examinations begun before junior high school. Only the top students were allowed to attend academic junior high school and then high school. After passing another series of exams, she was allowed an additional year of high school to study for three exams in three academic areas. She applied to college based on these test scores. A predetermined number of students were admitted to university. That's all. The balance can take the exams again next year. University is three (3) years. There is no finding yourself in France.
La Sorbonne does not have dorms, gyms, sports centers, and all of the other wasted money that American universities provide. They have classrooms, labs , and libraries period. But the cost of a degree is only $200 or so per semester.
My daughter-in-law also took a masters from the London School of Economics. There are no student loans. Her father had to remortgage their house for her to live and pay tuition in London, over $40,000 per year. Do not pay the loan, lose your house, real simple.
La Sorbonne does not have dorms, gyms, sports centers, and all of the other wasted money that American universities provide. They have classrooms, labs , and libraries period. But the cost of a degree is only $200 or so per semester.
My daughter-in-law also took a masters from the London School of Economics. There are no student loans. Her father had to remortgage their house for her to live and pay tuition in London, over $40,000 per year. Do not pay the loan, lose your house, real simple.
49
There are 13 public universities in Paris in addition to several "Grandes Ecoles, the equivalent of our ivy league universities, and several specialized programs for professions. There are also very good universities in other French cities. La Sorbonne, Paris IV, was hardly your DIL's only choice. I find it a bit odd that your DIL's dad mortgaged the house to pay for her MA since the people I know who have a PhD or MA from the UK had a full ride.
1
La Sorbonne has some pretty good cafeterias spread throuout its system. Low-cost meals for hungry students.
Good points, but dorms should pay for themselves and somewhat serve a purpose. Many places some of the athletic facilities are for mandated PE classes. Sports at my school support themselves and contribute to the academic side as well. Here college is a growing up to be an adult activity to a certain extent, or at least it should be.
We should always meet our responsibilities: students with their college loans; home owners with their mortgages; banks with their subprime financial products; Wall Street with.....And if we don't, who should we punish first: Wall Street; the banks....?
27
Or take the consequences. Losing your home, having a bankruptcy on your credit, etc. Now I would support some way to earn your way out of student debt, serving the poor seems like a great opportunity if managed through charity organizations.
If one borrows money for college it must be repaid like any other loan. When the loans are not paid back the taxpayer loses. Forgiving student loans is stealing taxpayers money.
23
Except it isn't treated like any other loan. If you borrow money to start a business and can't repay it, you discharge the loan through bankruptcy. If you buy a house and can't make the payments, you discharge the loan through foreclosure. Student loans don't have a similar mechanism. Many people will die still owing student loans. I had hopes that Obama would understand and provide a mechanism, but he didn't. Hillary seems more interested in helping the big banks that funded her speaking engagements and foundation. So I guess we will have to hope that one of the Republicans understand what the Democrats have failed to act upon.
Forgiven loans count as income to the debt holder, and thus you could owe taxes on money you borrowed and didn't repay. The IRS is not very forgiving.
So what do you call it when students do well in school, take on multiple unpaid internships to gain experience and still cannot find jobs even commensurate with a bachelor's degree? Do you call that fair?
A substantive conversation on this issue would look at the broader dynamics of the economy in this nation as well as ridiculous corporate welfare practices, our corrupt Congress, etc. Why should students who enhanced their educations in a good faith effort to improve their future careers be victimized by a horrible economy featuring minimal opportunity which was made possible in large measure by the corruption and negligence of others...a majority of whom, I might add, were never held accountable?
A substantive conversation on this issue would look at the broader dynamics of the economy in this nation as well as ridiculous corporate welfare practices, our corrupt Congress, etc. Why should students who enhanced their educations in a good faith effort to improve their future careers be victimized by a horrible economy featuring minimal opportunity which was made possible in large measure by the corruption and negligence of others...a majority of whom, I might add, were never held accountable?
Although i didn't read the interview with Mr Siegel in toto, I find it distressing that Mr Siegel not only has no regret for defaulting on his loans but actually encourages similar behaviour in others. Clearly, some have no shame.
25
College is too expensive. Plain and simple. They money is going to administration and fancy buildings instead of to professors and cheaper tuition. Full stop.
44
Thank you for this reminder of the heavy shackles that is student loan debt in America. A student who takes out loans and can't repay them will suffer all these consequences. They will be barely able to function in society where you need good credit to buy a car, buy or rent a house, and even get a job. Students will be shackled to this debt whether default is intentional or not, and with college cost exploding and wages dead in the water, default is inevitable. For as Senator Grassley once said in the context of healthcare debt, you can't squeeze blood from a turnip. Although if it is unintentional default perhaps the student might not suffer the hissing, vituperative condemnation of the NYT readership. (Assuming these are really comments of the NYT readership, who knows?) The comments show that American taxpayers have been well trained to yawn about tax breaks for big business losses, and to scream bloody murder about the investment failures of little people. Same thing in the housing bust when they blamed homebuyers, not banks. Maybe the next article in a series could be about the shackles of healthcare debt and the similar punishment meted out to those who cannot afford to pay their hospital and healthcare execs' mega-million salaries. Maybe a final article could be about how shackling all us little people with college debt and punishing and shaming us if we don't pay is making us better country than every other industrialized nation who does not.
28
Life is full of "bad deals."
If we buy into one, we pay the consequences.
Can't be helped.
If we buy into one, we pay the consequences.
Can't be helped.
Maybe education should be a perk of being a member of the richest industrial country in the history of civilization. Just maybe .....
13
European nations provide free college for some students but the standards are high. You must test high enough to get into college at government expense. If not you will be shuffled into a trade trade program. That isn't bad because trades people make a good living.
Would it work in the US with its sense of egalitarianism and entitlement? No. Parents and students will resent a program that tells them they aren't good enough for college at state expense.
Much of the unpaid debt in the college loan programs is from students who dropped out in the first semester or year after realizing that they don't have the basic skills needed for advanced study. Many do but don't apply themselves because they get caught up in the party hardy atmosphere.
I don't see how application of the European method of educating college students is viable here.
Would it work in the US with its sense of egalitarianism and entitlement? No. Parents and students will resent a program that tells them they aren't good enough for college at state expense.
Much of the unpaid debt in the college loan programs is from students who dropped out in the first semester or year after realizing that they don't have the basic skills needed for advanced study. Many do but don't apply themselves because they get caught up in the party hardy atmosphere.
I don't see how application of the European method of educating college students is viable here.
I agree but that would mean increased taxes on someone.
Lou H the USA by some calculations may be still the wealthiest country, but who owns the wealth and benefits is the question. When one is inundated by outrageous child care, university and health care costs per capita income is certainly lower than many places in which these expenses are covered more equitably. In my current residence in Mexico a University degree, a medical degree even, costs roughly $500 USD a semester for those who qualify (about 20% of those who apply to the national system. This of course translates into economic health care in the private sector or free health care that is universal. Mexico since 2008 about the middle class is booming in most urban centers. Look at the US.
Landlords are in the business of renting apartments, not in punishing student defaulters. If they have an apartment to rent and you can pay the rent, it's likely they will rent to you. No landlord is going to leave his apartment vacant in order to help the Federal government punish student debtors.
Credit card companies love people with shaky credit. What they hate is people who pay off their credit cards in full each month. There's a lot less profit in somebody who never carries a balance. People with student loans are ideal prospects for credit card companies because they need things and a willing to carry a balance.
Mortgage companies make money by issuing mortgages. Again, they could care less about Obama's jihad on student borrowers. If they can get you qualified for a loan, they will. Most mortgage companies have experts on getting people qualified. And, like the credit cards, the best customers are often those with damaged credit because they can be charged higher rates while the person with perfect credit will shop around and grind the mortgage companies against each other to get the lowest rate.
It's funny that major corporations, banks, even cities like Detroit can default on billions but a 17-year-old borrower can't. Detroit paid it's bondholders a penny or so on the dollar on the billions owed and the New York Times called it a renaissance city, but the English major who owed $30,000 is a deadbeat and should live under a shadow for the rest of his life.
Credit card companies love people with shaky credit. What they hate is people who pay off their credit cards in full each month. There's a lot less profit in somebody who never carries a balance. People with student loans are ideal prospects for credit card companies because they need things and a willing to carry a balance.
Mortgage companies make money by issuing mortgages. Again, they could care less about Obama's jihad on student borrowers. If they can get you qualified for a loan, they will. Most mortgage companies have experts on getting people qualified. And, like the credit cards, the best customers are often those with damaged credit because they can be charged higher rates while the person with perfect credit will shop around and grind the mortgage companies against each other to get the lowest rate.
It's funny that major corporations, banks, even cities like Detroit can default on billions but a 17-year-old borrower can't. Detroit paid it's bondholders a penny or so on the dollar on the billions owed and the New York Times called it a renaissance city, but the English major who owed $30,000 is a deadbeat and should live under a shadow for the rest of his life.
30
As a landlord, I will not rent to a prospective tenant who has defaulted on consumer or student debt. The majority of major NYC landlords will not rent to such a prospect. We use an algorithm to score tenant applications and credit default is an automatic disqualified. I may rent if someone has defaulted but repaid the entire debt or is on a payment plan.
11
I'm a landlord, and I assure you that I'm not interested in renting to deadbeats. If you cheat your lender, you're likely to cheat me, too.
2
In markets where apartments are in short supply and a large number of candidates would like to rent an apartment, the competition to be the one selected by the landlord can be fierce. If you own an apartment and are seeking a tenant, where you are faced with multiple candidates including a student-loan defaulter as well as others which are more careful about paying their obligations, which one would you select to become your tenant? Might a history of having defaulted on obligations suggest a greater risk to the landlord that such a prospective tenant could be more likely to fail to live up to the obligations of the lease?
1
Lee Siegel got three Ivy League degrees, a BA. MA and a Masters of Philosophy, all from Columbia University, partially financed with student loans. He lives in Montclair. NJ, a wealthy community and is well to do. It is obvious that Mr. Siegel knows how and can afford to "game the system" and get notoriety about it (and maybe sell more books?) Shame on The New York Times for publishing his opinion piece.
146
This is what's wrong with America. Once upon a time, you had to make a good widget to be successful, now all you have to do is game the system by being a member of the right victim group. It seems the newest victim group is adults who voluntary borrowed money and now are actually expected to lay it back!
I guess his Department is proud of him. Must get a lot of fund-raising letters.
If people continue to default on student loans, eventually we will have the elimination of student loans. Then the rich will get to attend college, any college. The very, very bright will win the few scholarships that are available,(as well they should). Poor and middle class "good " students will have to attend community college while working full time or more during the summer and part time during the academic year. After community college, these same students can work full time for a few years and save their money to attend the last two years of college. Or they can join the military to earn the GI bill plus save their earning for the last two years of college. Until quite recently, this was the normal routes for college. It will not hurt us to return to this model.
My father-in-law attended the Ohio State University for one year. He worked in the Pullman Car company operating a sewing machine for two years. He returned to Ohio State for one semester, until Pearl Harbor. After the war, he completed his degree with the help of the GI bill, part time work during the school year and two jobs during the summer. This taught him the value of an education and the value of hard work. Our society would be better off if we return to the old ways.
My father-in-law attended the Ohio State University for one year. He worked in the Pullman Car company operating a sewing machine for two years. He returned to Ohio State for one semester, until Pearl Harbor. After the war, he completed his degree with the help of the GI bill, part time work during the school year and two jobs during the summer. This taught him the value of an education and the value of hard work. Our society would be better off if we return to the old ways.
27
@Bubba
I agree that defaulting is not ideal. But to think student loans will go away if enough default is probably not realistic. Universities abound, looking for more and more students to fill their coffers. They need the revenue to survive. The end of student loans would be the end of many of these institutions. They won't let it happen.
I agree that defaulting is not ideal. But to think student loans will go away if enough default is probably not realistic. Universities abound, looking for more and more students to fill their coffers. They need the revenue to survive. The end of student loans would be the end of many of these institutions. They won't let it happen.
Great point of view!!
Too bad we no longer have the jobs to support the "old ways" thanks to technology, outsourcing, and off-shoring.
Is no one concerned about the ethics of usurious rates of interest and penalties being added to student loans? That is the biggest problem debtors face even if they intended to repay. I am shocked that a $5000 loan could grow to $30000 or more. There must be a cap on the total amount of deferred interest charges and late/refinancing fees. Those excessive charges do not benefit the educational institutions, taxpayers or society, only the greedy, abusive finance companies (who already take a hefty cut at origination.
74
Is Neubecker a member of one of those firms?
Ok so here's the solution - pay the loan off early there is no prepayment penalty on student loans. Or another solution WORK during college or go to community college. I really don't understand where the sense of entitlement comes from in this country. If you take out a loan you pay it back, if you can't afford something don't do it. I worked and went to community college, went to a great private college for the final 2 years and finished my Master's Degree at a top B school. I took out small students loans along the way, but paid them off early. Did I forgo a new car or a vacation to do so sure but it was more important to me to be debt free than to have "things". OH and don't go to a school you can't afford or get a degree that is going to pay peanuts and then go out and get $30K in student loan debt.
Since caps on interest are such a great idea, you lend me money and cap the interest
I run a business and we routinely check credit as part of a thorough background check before a final hire decision. With consistency we need to revoke an offer on a 20 something who has blown off some consumer debt.
Most recently a candidate a few weeks ago whose had 4 charge-offs of credit cards that had been placed for collection. Total was about $2,000.00. She had an explanation (helping her mother with debts when her mother lost her job), but this was not verifiable and we decided to take a pass on her. What is clear is that this employable young woman was perfectly capable of a second job if necessary to meet her various obligations.
Years ago I accepted the story of a young man who had past due student debt, claiming he was hoodwinked into attending a costly private University rather than the local State U. He proved to be a liar and a drunk. Cause-effect? Maybe. But when we have choices of who to hire, those who fail background checks with respect to credit are not getting the job. I lack the wisdom or capacity to parse out one's particular excuse when we have the ability to find plenty of candidates who have nothing to explain.
My belief is that those who default on debts, which after all is an obligation willingly embarked upon, are more likely to challenge the demands of the workplace and behave less honorably than those who honor their debts. I find it hard to distinguish in my mind, not paying a debt, from theft.
Most recently a candidate a few weeks ago whose had 4 charge-offs of credit cards that had been placed for collection. Total was about $2,000.00. She had an explanation (helping her mother with debts when her mother lost her job), but this was not verifiable and we decided to take a pass on her. What is clear is that this employable young woman was perfectly capable of a second job if necessary to meet her various obligations.
Years ago I accepted the story of a young man who had past due student debt, claiming he was hoodwinked into attending a costly private University rather than the local State U. He proved to be a liar and a drunk. Cause-effect? Maybe. But when we have choices of who to hire, those who fail background checks with respect to credit are not getting the job. I lack the wisdom or capacity to parse out one's particular excuse when we have the ability to find plenty of candidates who have nothing to explain.
My belief is that those who default on debts, which after all is an obligation willingly embarked upon, are more likely to challenge the demands of the workplace and behave less honorably than those who honor their debts. I find it hard to distinguish in my mind, not paying a debt, from theft.
118
I bet you're the type of person who won't hire divorced people because they didn't uphold their marriage vows.
People need to understand that their actions do indeed have consequences. If you are going to borrow money for anything you need to be prepared to pay it back. End of story.
1
No matter if your presumed unproven correlation is real, I think you are scrutinizing people (not job candidates, *people*) in ways that should not be allowed. Henry Ford used to follow employees around to see if they spent time in bars, and whether they went to church. Will you be doing that next?
Mr. Siegel is a crook plain and simple. He is a disgrace to our society and should be in jail. People have gone to prison for far lesser crimes. My parents taught me that when yo do the right thing you have good luck. Life is long and he will pay the price at some point in time. I would not want to be Mr. Siegel.
45
Compared to the Banking and Finance system in the US, Mr. Siegel is not even on the radar.
As Ms. Warren says: it's a fixed system. Mr. Siegel is playing the game and may 'win' or he may 'lose'. Life is not about the money, it is not a game of luck. The problem is exploitation by schools, banks and others.
As Ms. Warren says: it's a fixed system. Mr. Siegel is playing the game and may 'win' or he may 'lose'. Life is not about the money, it is not a game of luck. The problem is exploitation by schools, banks and others.
26
Just because many companies and most of our politicians are corrupt and only care about money does not make it right for this person or anyone else to not take care of their obligations.
1
Life is about honesty an integrity and Mr Siegel doesn't seem to have either.
1
Adios, America with this lack of commitment and apparently no integrity.
8
My wife and I have five children. All five attended public colleges. All five have jobs. All five have paid all of their student loans. That is the way it is supposed to work.
Perhaps we should add an additional document which has to be signed every time financial aid is paid out. It should read: I voluntarily accepted this loan. I must repay the loan. The lender does not care that I could have attended the local community college for two years and the state university for two year at a MUCH lower cost. I chose to attend this third rate private college. I must repay the loan and the interest. This debt may mean that I have to work at jobs I do not like. I may have to work full time and part time to repay the loans. I may have to delay having a child for years and not buy a house until I am older. I chose to attend college and borrow the money to attend college.
BTW-One child attend the University of Virginia. Two attended the University of North Carolina. Do you really think that they received an inferior education? Really! Now we have a musician, an accountant, two lawyers and a self employed glass artist.
Perhaps we should add an additional document which has to be signed every time financial aid is paid out. It should read: I voluntarily accepted this loan. I must repay the loan. The lender does not care that I could have attended the local community college for two years and the state university for two year at a MUCH lower cost. I chose to attend this third rate private college. I must repay the loan and the interest. This debt may mean that I have to work at jobs I do not like. I may have to work full time and part time to repay the loans. I may have to delay having a child for years and not buy a house until I am older. I chose to attend college and borrow the money to attend college.
BTW-One child attend the University of Virginia. Two attended the University of North Carolina. Do you really think that they received an inferior education? Really! Now we have a musician, an accountant, two lawyers and a self employed glass artist.
25
People knock the state colleges. North Carolina State is in the top five of Engineering schools and is an excellent value because the university system is heavily subsidized by taxpayers. The University of North Carolina is the first publicly funded college in the United States and no one looks down on a degree from either state college.
As good as all those colleges are, I have a sense that your children received the better part of their education before they left home. Job well done!!!
I like how you begin, with a discussion of the shiny amenities at the schools and the impressionable teens who are borrowing.
Our system is driven by the demands of those really not in a position to make good choices. We are not serving our youth well when we support the overpurchase of education.
Our system is driven by the demands of those really not in a position to make good choices. We are not serving our youth well when we support the overpurchase of education.
14
Rationing access to quality education based substantially on the ability of the parents to pay is in conflict with the American principle of equal opportunity for all, and leads to the country being run by people of means rather than people of ability. The consequences of this are unfortunate in government, and disastrous in the knowledge economy. The rules governing student debt are a clear indication of how committed people of means are to denying people of talent equal opportunity. In the long run this is bad for business.
13
Please let's not give Mr. Siegel any more publicity for being the thieving cretin that he is. He is simply a criminal who wants to justify his selfish and arrogant behavior. His protests about a badly managed unfair college loan system are not relevant-- this isn't protesting by sitting down at the lunch counter this is theft.
21
When only 50% of Arizona's college students earn their degrees within 6 years, the problem may be greater than student loans. Do student loans play a role in this metric?
When our son went to college, he knew "we would help pay for 8 semesters of college - not his BA/BS degree. Like it or not, students should understand being in college is "their current job."
As to the article: ethics? What ethics?
When our son went to college, he knew "we would help pay for 8 semesters of college - not his BA/BS degree. Like it or not, students should understand being in college is "their current job."
As to the article: ethics? What ethics?
12
Deliberately defaulting on student loans is a radical, and-for most people-ill-advised solution to the problem of student debt. But that doesn’t mean there isn’t a problem. Student debt is causing, and will continue to cause, a drag on the economy, and the problem must be addressed. Interest rates on federal student debt and federally subsidized student debt should be reduced to near zero. Former students would still have to pay off their loans, but without burgeoning interest-on-interest payments. Surely our young citizens, whose energy and education should be used to energize our economy and our culture, are worth at least as much as the big banks that have benefited from near-zero rates (and more) for years now.
17
The interest rate reflects the cost of loaning money out that the person will not start repaying for four to five years for a Bachelors degree. The lender has to pay for that money. It's like buying goods that sit on the shelf and don't sell for five years if at all.
“Fat, drunk, and stupid is no way to go through life, son.” And neither is playing dodge the bill collector for the rest of your life because of defaulted student loans. Education provides opportunities for success, but bad credit makes you persona non grata. Imagine the lost opportunities for those who can’t show their financial face in public.
The federal government offers several very reasonable income based (size of INCOME, not size of debt) repayment programs for many types of student loans, plus a very nice forgiveness program. The feds also make it very easy to get student loans out of default and get credit records back on the right track. Not all student loans qualify for these programs, but that’s a problem that our legislators can remedy (reasonable goal, given the elections that are about 16 months away).
Contact the US Dept. of Education to learn about the defaulted loan rehabilitation and income based repayment programs. Contact your legislators to get those programs extended to all student loans.
The federal government offers several very reasonable income based (size of INCOME, not size of debt) repayment programs for many types of student loans, plus a very nice forgiveness program. The feds also make it very easy to get student loans out of default and get credit records back on the right track. Not all student loans qualify for these programs, but that’s a problem that our legislators can remedy (reasonable goal, given the elections that are about 16 months away).
Contact the US Dept. of Education to learn about the defaulted loan rehabilitation and income based repayment programs. Contact your legislators to get those programs extended to all student loans.
20
I think that Lieber is not seeing the larger picture of what this means.
The cases of Siegel and Wierenga are merely symptoms of the rapidly shrinking middle class and loss of economic opportunity due to out-sourcing, automation and a winner-take-all society that won't settle for less than market domination.
I don't feel that Americans (as represented by the commentazi) realize how fast this transition is taking place. Thus, people are talking past the problem or focusing on slivers.
Some one or some thing has to wake up the US before it's too late.
Though it may be already...
The cases of Siegel and Wierenga are merely symptoms of the rapidly shrinking middle class and loss of economic opportunity due to out-sourcing, automation and a winner-take-all society that won't settle for less than market domination.
I don't feel that Americans (as represented by the commentazi) realize how fast this transition is taking place. Thus, people are talking past the problem or focusing on slivers.
Some one or some thing has to wake up the US before it's too late.
Though it may be already...
12
Very pleased to see Lieber's response to Siegel's self-entitled column justifying default on loans taken to pay for higher education. Lieber's pretty much covers the thoughts I had when I first read Siegel's column. Kudos to Mr. Lieber!
19
Is this the NYT trying to buy some redemption for giving ink to the self serving deadbeat Mr. Siegel ?
22
To their credit, I think that the NYT realized that the earlier: “Why I defaulted on my student loans” article was dangerously misleading and deceptive. This is, I guess their version of a “make-up” call.
16
The NYT got a lock of clicks from that horrible piece and will now get more from yet another article on that issue. I doubt they regret a thing.
In all the discussions of student loan defaults and the surreal rise of college tuition, you never hear about a college going broke because former students haven't paid them. That is because the government pays the colleges upfront and then pursues the money themselves. The idea behind this was to make college more affordable but, in fact, the opposite has happened. Kids used to be able to go to college with a small loan and a part time job, if necessary. The government has destroyed that option. It is not their job to be the banker for the nation's universities. BTW, they have done the same thing with housing and medical care. Nothing in the universe has skyrocketed in cost over the past twenty years more than U.S. College Tuition, U.S Medical Care and U.S. Housing costs. The same demon is behind all three, the U.S. Government.
18
While the US Government may be "behind" the skyrocketing costs in housing, tuition, and medical care, there is another demon. That is about not having ownership of the item being paid for by a loan. Medical bills? Take it up with the insurance company; they aren't my bills. Tuition? Did I go to a school I couldn't afford? Housing-I deserve this house! No-down loans (which is essentially what a tuition loan is) always mean that the item isn't worth the sweat equity that putting some of your own money and risk into entails.
4
The only reason you can get a student loan is that it's a safe loan. If the loan could simply be discharged by bankruptcy or not paying it then who would lend money to an 18 year old that wants to go to college? The answer is NO ONE. The problem we have is that there is a distorted sense of the value of a college degree which for many is worth nothing. If you want an education but can't afford, take your time, go to community college, join the army but don't borrow a lot of money unless you are studying medicine or engineering or technology. Please.
25
The interests rates are too high. And, when I went to college, you could discharge the loans, but costs weren't so high, so you didn't have to.
7
They are below market for many of the students who take them out. Clearly, many of the borrowers are bad credit risks. When we lend money without regard to credit history, what do you think the rates should be?
At the time Siegel took out his loans, they WERE dischargeable in bankruptcy. From his article, they were taken in a period from 40-30 years ago. The change in dischargeability of student loan debt in bankruptcy is less than 20 years old. It is simply another way in which the Times was hoodwinked by failing to closely examine the story as told (sold?).
I worked 30 hours per week while attending college, with an extra job during the summer. No 'summer break' trips, sports events, new clothes, or car. But I was only $450 in debt when I graduated. It was worth it.
47
How many centuries ago?
30 hours a week at today's minimum wage works out to about $15K per year, before taxes. Would that cover current tuition and living expenses at the university you attended? I was in a very similar situation as you when I went to college, but I don't think my job would cover what it costs today.
My wife made beds at the Jersey shore during summers, cleaned lab rat cages and bused table in the school cafeteria for four years. She lived in the dormitory. took the bus and ate on the meal plan. She had about $3K in loans because degrees in the medical field have some high lab fees.
We married two weeks after she graduated and together we paid those loans off on her foreign country wages of $3.00 an hour and my Navy E3 pay. It took us two years, 1972-1974 to pay it off.
We married two weeks after she graduated and together we paid those loans off on her foreign country wages of $3.00 an hour and my Navy E3 pay. It took us two years, 1972-1974 to pay it off.
The ethics of taking a loan and refusing to pay it back is in my books ethically corrupt behavior that ignores the impact on those who provided the loan, and those coming behind you who are as a result less likely to get a needed loan. Stack up debt with the intention of not paying it back and I would define that behavior as fraud.
More importantly, there are way too many diploma mills that cheapen the value of everyone's degrees and obfuscate the intention and value of what I would call an intellectual education. Additionally, we seem to be confusing trade schools with a focus upon training with college educations where the focus is upon depth and breadth of intellectual analysis, writing, and subject matter.
All this talk about "value" and "overpriced" overlooks who funds state systems of higher education and the reduced monetary support that is available to keep costs lower. As a nation we have cut back on research funding,arts in education funding, support of the arts, etc, etc, etc. Sooner or later our short-sighted disrespect for knowledge and our cost-cutting were bound to catch up with us, and I think the moment may be now.
More importantly, there are way too many diploma mills that cheapen the value of everyone's degrees and obfuscate the intention and value of what I would call an intellectual education. Additionally, we seem to be confusing trade schools with a focus upon training with college educations where the focus is upon depth and breadth of intellectual analysis, writing, and subject matter.
All this talk about "value" and "overpriced" overlooks who funds state systems of higher education and the reduced monetary support that is available to keep costs lower. As a nation we have cut back on research funding,arts in education funding, support of the arts, etc, etc, etc. Sooner or later our short-sighted disrespect for knowledge and our cost-cutting were bound to catch up with us, and I think the moment may be now.
22
'...The family believed a series of shiny, happy job placement promises that his son’s college made. His son eventually defaulted on his loans, and now the lender is confiscating his father’s state tax refunds while flinging mud at his dad for good measure...'
Then the family made a stupid mistake, for which they alone should pay.
No one should attend any college or choose their major without performing due diligence and since that can be done in today's world with the click of a mouse, there is no excuse not to have done so.
Then the family made a stupid mistake, for which they alone should pay.
No one should attend any college or choose their major without performing due diligence and since that can be done in today's world with the click of a mouse, there is no excuse not to have done so.
20
This is the worst situation when someone else has to suffer because of the actions of another. Even sadder when it is the person's parent. I'm sure many in this position wonder where they went wrong in their child's upbringing.
These students are 18 and over, and are adults. They asked to borrow the money, received the documentation, signed and agreed, and received the money. They gave their word that they would repay it. They are accountable. No one forced them to borrow the money. If they made bad choices then it's their responsibility to figure out how to deal with their debts honorably.
26
It's a contract. A gamble and a bet by the lender. Everything in your comment is correct UNTIL the last word. There is no honor in the world of banks and financial services. He is still playing within the rules and will (or wont?) suffer a penalty.
9
What if they were misled? What if they were essentially defrauded?
but happens a bad job market shafts their chances at finding employment?
"Of course, you’ll need to talk someone into coupling up with you in the first place, after explaining that you’re not so big on financial obligations but that you really, truly intend to honor marital ones."
The author's strong implication is that to renege on a student loan is comparable to disloyalty in marriage. But it isn't. One can treat financial institutions in a way that is wholly separate from how she treats friends, family, and spouse. And do so with a clear conscience without having a character disorder.
Joseph in Missoula
The author's strong implication is that to renege on a student loan is comparable to disloyalty in marriage. But it isn't. One can treat financial institutions in a way that is wholly separate from how she treats friends, family, and spouse. And do so with a clear conscience without having a character disorder.
Joseph in Missoula
26
I guess I am too old school, but what happened to the idea that one's word was worth something? If I make a commitment, verbal or written, to do something, I should honor that commitment.
Just reverse the situation...what would the reaction be is the lender, having promised to pay the student's tuition, decided that they didn't want to send the school the check because a better use for the money came up. Would Mr. Siegel have seen that as an ethical choice on their part? I doubt it. How, then can his decision to use his money on something other than what he promised to use it on be seen as anything but cheating?
Just reverse the situation...what would the reaction be is the lender, having promised to pay the student's tuition, decided that they didn't want to send the school the check because a better use for the money came up. Would Mr. Siegel have seen that as an ethical choice on their part? I doubt it. How, then can his decision to use his money on something other than what he promised to use it on be seen as anything but cheating?
5
Integrity is a part of ones whole life and in all situations. What you are describing is situational ethics. That means the person is not trust worthy.
Call it what you will but theft is theft.
Sure, the colleges, lenders and others are guilty of leading the gullible and reckless into a morass from which they may never be able to extricate themselves without ( please sit down when you read this next part) having to work and forgo the pleasures that they believe they are entitled to.
Millions of us took out loans and paid them back. I took out the least amount possible and paid it back while living like a pauper so that I could go on with my life. Part of that came from being raised in a family where borrowing money was considered the Mother of All Sins. I went to the University of Chicago, got two grad degrees there, and then medical school. All the money was paid back. When I was in medical school I couldn't qualify for a credit card because I had never bought anything on credit. My father had to co-sign for me to get one and I have never missed a payment in my life.
I set standards early on that I would only borrow money as a last resort and then only the least amount. That would be paid back ASAP and I accepted that while going through school I would work on the side and not ask others for money.
I own one new car. I paid cash. Previously I bought used cars. Cash. I put money aside to finance my own retirement plans. I bought a home and paid it off early on a 15 year mortgage. I live within my means.
There is a lot to be said for establishing personal honesty and ethical behavior early on.
Sure, the colleges, lenders and others are guilty of leading the gullible and reckless into a morass from which they may never be able to extricate themselves without ( please sit down when you read this next part) having to work and forgo the pleasures that they believe they are entitled to.
Millions of us took out loans and paid them back. I took out the least amount possible and paid it back while living like a pauper so that I could go on with my life. Part of that came from being raised in a family where borrowing money was considered the Mother of All Sins. I went to the University of Chicago, got two grad degrees there, and then medical school. All the money was paid back. When I was in medical school I couldn't qualify for a credit card because I had never bought anything on credit. My father had to co-sign for me to get one and I have never missed a payment in my life.
I set standards early on that I would only borrow money as a last resort and then only the least amount. That would be paid back ASAP and I accepted that while going through school I would work on the side and not ask others for money.
I own one new car. I paid cash. Previously I bought used cars. Cash. I put money aside to finance my own retirement plans. I bought a home and paid it off early on a 15 year mortgage. I live within my means.
There is a lot to be said for establishing personal honesty and ethical behavior early on.
104
Well there are worse sins than not paying back a loan to the federal government or a bank. Maybe the sin of pride is one.
3
@Simon Sez: the difference is that if you borrow to buy a home or a car, you actually own something of value. Not so with many educational loans to for-profit "educational" institutions and their dubious offerings.
2
And you're a doctor. In an employment and economic place few of us can even imagine.
When I went back to enroll my oldest in the state university I graduated from, I was shocked. I had a basic dorm room with an air conditioner in the window. Now, enormous monies are spent on lounges, kitchens, private baths, and game rooms. Likewise, student centers and dining halls with gourmet chefs. All of this and all the extra personnel to service it, not to mention the bloated admin. staff has got to be expensive. Somehow, I'd rather just pay for an education.
29
Surely the Washington geniuses who found ways to bailout the banksters can also figure out ways to help people pay down their student debt within certain reasonable limits. Why not take 5% of their pay for ten years after graduation.
What we really need to do, however, is make college education affordable. If Germany and other countries can offer free universities, why can't we? In-state tuition at great American public universities used to be negligible but has become unaffordable for many "middle class" families. We all benefit from a more educated workforce, so let's invest in education.
What we really need to do, however, is make college education affordable. If Germany and other countries can offer free universities, why can't we? In-state tuition at great American public universities used to be negligible but has become unaffordable for many "middle class" families. We all benefit from a more educated workforce, so let's invest in education.
13
Are you willing to see students with marginal grades turned down for college because they are a risk for failure? That's the way it works in Germany and France.
I doubt Americans with their delusions of entitlement would be willing to have a system like theirs. Why, it would be un-American!
I doubt Americans with their delusions of entitlement would be willing to have a system like theirs. Why, it would be un-American!
1
I've taken Lee's approach. After paying off nearly $20,000 in debt in one year in large payments - finding out those were misapplied and within 2 weeks of making those large payments I received a late notice with a late fee- I gave up. I now have a young son and we just put everything in his name. I'm focusing on building his credit. My first home will be in his name - and all my investments and things that can be confiscated are in his name. My tax returns? Yes, they try but I claim exempt so I'll owe money not want it coming back to me.
4
Great analysis and sound advice. I teach kids financial literacy and I tell them that their most important social profle is their credit score...even insurers get in on the act so it is really important they protect theirs!
12
Student loans and child support have one thing in common: no endgame on the debt/arrears.
Both systems are a mess!
To stop overwhelming student debt burdens we need to establish an end game for debt repayment.
If the government and banks cannot collect the debt forever, fewer loans will be issued and tuition prices will come down.
Both systems are a mess!
To stop overwhelming student debt burdens we need to establish an end game for debt repayment.
If the government and banks cannot collect the debt forever, fewer loans will be issued and tuition prices will come down.
4
The obvious answer is to make the education loan market a true lending market. Based on extensive econometric data, a bank would calculate (based on GPA, standardized test scores, class ranking, etc.) the probability that a particular young person will succeed in obtaining his intended degree and calculate the ROI of that degree. For example, exactly what is the expected return on investment of a degree in feminist literature and comparative religions?
Ah, but then a lot of young people would not be able to get college loans. Exactly. These would be just the people we are talking about: the people who are now incurring enormous loans for worthless degrees, loans many of them will never pay back.
In addition to all the other benefits of this approach, it would bring irresistible pressure on the universities to eliminate their worthless offerings, and watch college tuition plummet.
Ah, but then a lot of young people would not be able to get college loans. Exactly. These would be just the people we are talking about: the people who are now incurring enormous loans for worthless degrees, loans many of them will never pay back.
In addition to all the other benefits of this approach, it would bring irresistible pressure on the universities to eliminate their worthless offerings, and watch college tuition plummet.
9
A comparative religion degree would have been pretty handy in deciding whether or not to invade Iraq, or when deciding whether or not to banish all Sunnis from government. If we'd had a lick of comparative religion sense we would have known we were just throwing a tanker of fuel onto a thousand-year-old religious feud between Sunni and Shia.
3
It is a travesty that student loans can't be discharged in bankruptcy proceedings. What is the reason for this? Young people graduate with loans they can't afford to pay. They are, as the article says, impressionable, ignorant and naive. Yet the debt stays with them all their lives, even if they declare bankruptcy.
10
If you read Siegel's self serving article carefully, HIS loans were all taken out at a time when student loans WERE dischargeable in bankruptcy (a period from 40-30 years ago). At that time, the most expensive college in the country cost well under $10K/year, all inclusive. Siegel's story unravels like a poorly crafted piece of fiction.
1
Who would lend large sums of money to an 18-year-old student with no collateral if he could walk away from paying it back? Clearly, absolutely no one.
The government should not dole out any student loans, period. Pell Grants and Fulbrights should also be cancelled. If you want a college education, then deal directly with a bank or university for loans and grants. Without the never-ending spigot of federal loans and grants, colleges will not get serious about reining in their overblown costs on unnecessary administrators and offices, and amenities like climbing walls and library atriums. Where are the Republicans when we need them to do some extreme cost-cutting? They are useless and only advocate cutting government spending when it benefits the wealthy and corporations. Emigrate out of the US is the answer for the new generations of Americans.
5
Siegel's article angered me. When he was young, he didn't want to take a job he didn't want just so he could pay his debts. He wanted to write. Fine. Now he's a writer and earning a living doing it. So why not pay now? He's basically stolen money from every taxpayer in the country. Does he own a home? Let him get a second mortgage to pay off the student loans.
Such a shame. When I read his column, I googled him and he sounds like the kind of writer I would normally be eager to read. But I won't buy his books. I won't give him one dime of my money.
Maybe I could get his books but turn the money over to the Dept of Ed.
Such a shame. When I read his column, I googled him and he sounds like the kind of writer I would normally be eager to read. But I won't buy his books. I won't give him one dime of my money.
Maybe I could get his books but turn the money over to the Dept of Ed.
21
Here's a question for Mr. Siegel, if I download copies of his books and sell them on the open market for less than they sell on Amazon, is that ethical? If not, why not? I am simply attempting to lower the costs to those who cannot afford to buy his books at market costs; the fact that is defrauds him of his earned income is no different than his decision to defraud his lenders of theirs.
7
20 years back a friend in Manhattan started her first job working for a private, for-profit college. She was instructed to pull young people off the streets and offer them a college education with "no money required". Deep in the forms they were signing later that day were the govt. loan forms that I am guessing very few understood. Those for-profit colleges had the highest default rates of any institutions. Essentially their entire business model was to generate tuition payments, via loans, from naive young people who were getting a fifth-rate education that employers would later scoff at. I hate the think of the pain they caused over the ensuing years, though I know congress recently cracked down on the worst offenders.
22
One can only hope that revelations of Mr. Siegal's parasitic self-serving behaviors will have negative consequences on his future professional life and bring financial hardship to him and his family. That would be a story worth reading.
14
All nonsense, irresponsible and immoral. 2 years at a community college and then transfer to a 4 year school you can afford is one option. There are others. People like this feel entitled and want to spend other people's money all day long.
14
Where to begin?
My observation would be that there is a fundamental disagreement, here, between those who think individual borrowers are "irresponsible," and are morally suspect, and those who think we are looking at a serious systemic problem that has created a social catastrophe.
Full disclosure: I am a physician who paid off his (rather large) student debts in full several years ago.
That said, I would be delighted if holders of student debt formed a mass movement to refuse repayment of these debts produced by an incredibly corrupt and unjust educational system. Why?
Because I believe that it is inherently wrong, in a society that allows business entities and most consumers to get a "fresh start" by declaring bankruptcy, to refuse this option to student loan recipients.
Because I believe preying on teenagers whose understanding of debt and compounding interest is limited is wrong.
Because I don't accept that defaulting on student debt, in this situation, is necessarily a sign of irresponsibility or poor character.
Because it's clear that, when push comes to shove (as in the case of Corinthian Colleges--really just an extreme form of what EVERY private and most public universities are already doing to many of their students), this debt will be forgiven if enough people refuse to pay.
Why is it Germany can afford to educate its university students without tuition, where Americans charge tens of thousands a year in tuition?
Maybe that's the right question?
My observation would be that there is a fundamental disagreement, here, between those who think individual borrowers are "irresponsible," and are morally suspect, and those who think we are looking at a serious systemic problem that has created a social catastrophe.
Full disclosure: I am a physician who paid off his (rather large) student debts in full several years ago.
That said, I would be delighted if holders of student debt formed a mass movement to refuse repayment of these debts produced by an incredibly corrupt and unjust educational system. Why?
Because I believe that it is inherently wrong, in a society that allows business entities and most consumers to get a "fresh start" by declaring bankruptcy, to refuse this option to student loan recipients.
Because I believe preying on teenagers whose understanding of debt and compounding interest is limited is wrong.
Because I don't accept that defaulting on student debt, in this situation, is necessarily a sign of irresponsibility or poor character.
Because it's clear that, when push comes to shove (as in the case of Corinthian Colleges--really just an extreme form of what EVERY private and most public universities are already doing to many of their students), this debt will be forgiven if enough people refuse to pay.
Why is it Germany can afford to educate its university students without tuition, where Americans charge tens of thousands a year in tuition?
Maybe that's the right question?
128
Good points. The only thing I would say is that if the taxpayers pay the full cost of education, fewer people will be able to go to college. But maybe that's okay. Maybe we shouldn't be sending so many to college. Not everyone is cut out for it.
1
I think they should make it possible to discharge loans in bankruptcy right now it is possible but extremely difficult. The reason it is difficult is because the government is worried many people would immediately default on loans after expensive degrees and file bankruptcy before starting their careers.
1
Doctor, how long are you out of Med School? My wife graduated Dental School (Columbia) 32 years ago. She got out with a total of $10K in student loans. Payable in 10 years at $235/month, with interest a tax deductible expense.
She now hires newly minted dentists with $250K in student loans, the interest on which is NO LONGER deductible.
Yes, the system is rigged, but it wasn't when Siegel incurred his debt, which is what makes his tale and advice so totally unacceptable. I think the Times was sold a bill of goods that they failed to examine before printing Siegel's op-ed.
She now hires newly minted dentists with $250K in student loans, the interest on which is NO LONGER deductible.
Yes, the system is rigged, but it wasn't when Siegel incurred his debt, which is what makes his tale and advice so totally unacceptable. I think the Times was sold a bill of goods that they failed to examine before printing Siegel's op-ed.
1
While I'm all in favor of encouraging people to pay their college loans, one of the drivers of this issue is the huge cost of a college education. Especially the private ones. If you compare the rise in the cost of a four year education with the inflation rate over the last 30 years, it's not even close. With the highly competitive environment for admittance at a lot of these places, tuition pricing isn't based so much on concepts of marginal cost but on what the upper middle class parents can pay.
Also. Look at the salaries of college presidents, other senior administrators and high ranking professors. Astronomical. Our major corporations don't have a monopoly on greed.
Throw into the mix all the silly stuff colleges need to provide the students to make their schools attractive. Coffee bars, state of the art gyms, climbing walls. There are more. Then, the student fees to support organizations many students don't care about.
All this has created a perfect storm of out of control tuition and fees. Somewhere along the line our society got the idea that learning can only happen at an upscale mall-like environment.
Also. Look at the salaries of college presidents, other senior administrators and high ranking professors. Astronomical. Our major corporations don't have a monopoly on greed.
Throw into the mix all the silly stuff colleges need to provide the students to make their schools attractive. Coffee bars, state of the art gyms, climbing walls. There are more. Then, the student fees to support organizations many students don't care about.
All this has created a perfect storm of out of control tuition and fees. Somewhere along the line our society got the idea that learning can only happen at an upscale mall-like environment.
32
Robert, what you say is true, but doesn't apply in Siegel's case. According to Siegel's own words, the debt was accumulated in a ten year period stretching from 40-30 years ago, before college became so ruinously expensive. The Times was hornswaggled by failing to read and vet the piece before printing it. I was in college 39 years ago, when the most expensive school in the country had a cost of attendance of something like $7-8K/year. I worked as a furniture mover summers and at minimum wage+ tips, I was able to easily save $2-3 K in a summer. That he accumulated enough debt that he couldn't pay it off is simply not credible, especially that loan rates were subsidized back then (not so much now) and interest was tax deductible then (no longer).
One often overlooked problem is that high schools in the United States do not mandate money management classes. Few even have them. A person may graduate knowing the names of the first ten presidents, but they have no idea what compound interest means.
We're a capitalist society, but we don't teach teens about money. Why is that?
We're a capitalist society, but we don't teach teens about money. Why is that?
95
Possibly because we don't want the worker bee's to know how to acquire and manage wealth...if everyone understood money where would the bottom rung be? No longer on the bottom, of course. The pressure from the wealthy to keep money education out of schools is huge - they would rather see youth taught things which won't affect their class.
It is quite possible to learn about money management without a high school class on that subject. It would be great if parents taught that to their children. That didn't happen in my case but children can learn through books, magazines and newspapers from the library or the internet. This article is one great way to learn. I went to a "good" high school 40 years ago but I didn't take consumer math and my economics and accounting courses were worthless. The first time I was "taught" about compound interest was in finance class in college - nobody should wait to be taught such important and practical information.
Over the past few decades, public financing of public universities has decreased dramatically. This is because we taxpayers elect politicians who promise to lower our taxes and this is a selling point. So universities raise tuition to fill the gap. It pains me to see so many comments that fault educational institutions for charging high tuition. The problem is that as a country we have decided to starve education at all levels of public dollars.
"His son eventually defaulted on his loans, and now the lender is confiscating his father’s state tax refunds while flinging mud at his dad for good measure."
If the credit company is posting inaccurate information about the father/codebtor, there is a recourse at law. If they are posting the truth, to call it "mud" is dishonest.
If the credit company is posting inaccurate information about the father/codebtor, there is a recourse at law. If they are posting the truth, to call it "mud" is dishonest.
14
"The ramifications of defaulting and remaining in debt deliberately are usually real and lasting."
The ramifications of paying off a $1500 a month student-loan debt for years and years are also real and lasting.
The ramifications of paying off a $1500 a month student-loan debt for years and years are also real and lasting.
48
Yes, but you can sign up for the Income Contingent Plan. That way your required payment is based on your income, and if your income falls below a certain level, no payment is required.
It is true that your low payments mean you may never touch the principle of the debt, and after 25 years, any unpaid amount becomes taxable income that year. But I believe tax debt is dischargeable in bankruptcy, unlike student loan debt.
It is true that your low payments mean you may never touch the principle of the debt, and after 25 years, any unpaid amount becomes taxable income that year. But I believe tax debt is dischargeable in bankruptcy, unlike student loan debt.
As they should be, Edwin. As they should be. Be careful when you sign on the dotted line.
All this angst- Do as our forefathers did- EMIGRATE-
become a citizen somewhere else.
become a citizen somewhere else.
24
Easier said than done. Unless you go to an underdeveloped or renegade country , your U.S. citizenship and your financial history will follow you. Also, renouncing U.S. citizenship (you don't automatically lose it if you naturalize elsewhere) is difficult and expensive.
Additionally, consider that you might have to be willing to never return to the U.S., even if your family is still here. Can't go to your brother's wedding. Can't go to your mother's funeral...
In some countries, because of the U.S.'s citizenship-based taxation, banks won't give you accounts or loans, merely because of your U.S. status. This is another issue, but a relevant barrier to people doing what you propose.
Unless you are willing to live very rustically, or in a country that is being droned and bombed into dust, think twice about that strategy.
Once you are born in the U.S.A., they have you for life. You are owned, and are a worker bee on the tax plantation. Get used to it.
Additionally, consider that you might have to be willing to never return to the U.S., even if your family is still here. Can't go to your brother's wedding. Can't go to your mother's funeral...
In some countries, because of the U.S.'s citizenship-based taxation, banks won't give you accounts or loans, merely because of your U.S. status. This is another issue, but a relevant barrier to people doing what you propose.
Unless you are willing to live very rustically, or in a country that is being droned and bombed into dust, think twice about that strategy.
Once you are born in the U.S.A., they have you for life. You are owned, and are a worker bee on the tax plantation. Get used to it.
1
Colleges are overpriced, just like our medical industry is. It cost a fortune to receive an education. Then once the student has graduated, it's impossible to find a decent paying job. And why? Because the financial industry lied, cheated and swindled Americans with their creative in-house deals. I love how banks sit in judgement of our youth, when the banks are in fact the culprits and perpetrators of our disastrous economy.
I would much rather tax dollars be paid for the education of our young people, then to have bailed out too, big to fail financial institutions, who are still paying fines for their fraudulent endeavors.
Our college tuition system needs a drastic overhaul, along with the financial institutions and the credit reporting agencies, which are poorly managed at best.
I would much rather tax dollars be paid for the education of our young people, then to have bailed out too, big to fail financial institutions, who are still paying fines for their fraudulent endeavors.
Our college tuition system needs a drastic overhaul, along with the financial institutions and the credit reporting agencies, which are poorly managed at best.
45
State universities are not expensive and if the student lives at home, a four year degree can cost less than a new car.
4
New York state universities are $7000 a year full time and if a student does their first two years at a community college, it is even cheaper.
7
Except according to his own words, Siegel started college FORTY years ago, when college was NOT profligately overpriced. In fact, to someone the same age as Siegel (57), his story reads like poorly plotted fiction. I went to Cornell (land grant college) when it cost well under $5k, tuition, room and board included. The private college there had a tital cost of about $7-8K. Go broke paying that? No way. Siegel went to Columbia, whose costs were comparable to Cornell's private colleges. The Times was naive in allowing Siegel to sell it a bill of goods.
1
If you took out the loan, be an adult and pay your debt if you're able. Take some responsibility for your actions and you may actually get somewhere in life besides dodging bill collectors and dunning notices.
57
It's interesting reading this article from a broader sociological point of view, of changes occurring across the board in American society.
The NYT will not print any reader's comment that suggests breaking the law. However, the paper has gotten to the point of publishing articles like this one, step-by-step-how-to's, perhaps reflecting economic and class strains in the US as a whole.
The Times, they are a-changin'.
The NYT will not print any reader's comment that suggests breaking the law. However, the paper has gotten to the point of publishing articles like this one, step-by-step-how-to's, perhaps reflecting economic and class strains in the US as a whole.
The Times, they are a-changin'.
32
I recently noticed an article describing the procedure for defeating the "lock" mechanism on vending devices for "hard-copies" of the NYT. Public Policy wise, it would seem reasonable for a society that legally requires hospitals to render services with no regard for the ability to pay, to also require colleges to provide training, side-higher-ed
There are programs that the government provides such as income adjusted repayments that might be preferable. Granted you may only be paying interest or face a balloon type payment if your income goes up, but at least you are not in default. Also, suppose you ever want to get a government job, a job with a clearance, etc. etc. I am not sure the clearance would readily come through if you had defaulted. There are also other ways to repay. Working in public service for a long period of time is one which was enacted when the income adjusted repayment was passed.
Yes, you may be resentful and it may be all well and good to highlight the debt that students are taking on and the almost immoral behavior of some college administrators to encourage students to take loans--and these are not all for-profit institutions. And for those who think public universities are good alternatives, take a look at tuition--even in-state tuition--in many locales.
But encouraging default except in the most dire of circumstances is really not responsible.
It may be unfair to some extent, and it may be exploitation to some extent but there is also some extent of responsibility. Look at all of the alternatives before just outright not paying.
And do not think that just because "everyone" or at least "someone' is doing it makes it right. Remember what your mom taught you.
Yes, you may be resentful and it may be all well and good to highlight the debt that students are taking on and the almost immoral behavior of some college administrators to encourage students to take loans--and these are not all for-profit institutions. And for those who think public universities are good alternatives, take a look at tuition--even in-state tuition--in many locales.
But encouraging default except in the most dire of circumstances is really not responsible.
It may be unfair to some extent, and it may be exploitation to some extent but there is also some extent of responsibility. Look at all of the alternatives before just outright not paying.
And do not think that just because "everyone" or at least "someone' is doing it makes it right. Remember what your mom taught you.
15
Sometimes, what one's Mom taught decades ago is no longer applicable. When the rules of the game have been re-written, and you're playing against people who brazenly cheat, Mom's homespun advice may be incredibly misguided.
I understand you are proposing solutions you view as feasible and compassionate, and you are honorably motivated. Thank you for that.
However, when one considers the way this debt is treated as fundamentally "different" from consumer or business debt, and cannot be discharged in bankruptcy, the consequence of what you propose become clear. A lifetime of debt peonage.
Based on the mathematics of compounding interest, and the incomes of many grads, some people will never be able to get ahead of their student loans. Effectively, they are in indenture for life. Unless they're totally destitute, or permanently disabled, or die, they may not be eligible for forgiveness.
If you get in over your head on cars, real estate, or credit card debt, you can get out. But education? Forget it!
Having to work in public service for a set period of time sounds a lot like indenture, when it is forced only on the poor instead of being an obligation of all citizens.
I think we need a new system. The universities, and the government loan programs, are rotten, and have been used to pump public money into universities' pockets far too long...
It's not the individuals who are the problem. It's the system.
I understand you are proposing solutions you view as feasible and compassionate, and you are honorably motivated. Thank you for that.
However, when one considers the way this debt is treated as fundamentally "different" from consumer or business debt, and cannot be discharged in bankruptcy, the consequence of what you propose become clear. A lifetime of debt peonage.
Based on the mathematics of compounding interest, and the incomes of many grads, some people will never be able to get ahead of their student loans. Effectively, they are in indenture for life. Unless they're totally destitute, or permanently disabled, or die, they may not be eligible for forgiveness.
If you get in over your head on cars, real estate, or credit card debt, you can get out. But education? Forget it!
Having to work in public service for a set period of time sounds a lot like indenture, when it is forced only on the poor instead of being an obligation of all citizens.
I think we need a new system. The universities, and the government loan programs, are rotten, and have been used to pump public money into universities' pockets far too long...
It's not the individuals who are the problem. It's the system.
4
Individuals ARE the system. For every loser there was a winner. How are you going to change that except person by person?
Thank you for passing mention to the difficulty in finding employment after a default.
It is rare for anyone to obtain well paid employment with a student loan default on their record.
It is rare for anyone to obtain well paid employment with a student loan default on their record.
19
Mr. Siegel didn't have to sully himself with a "real" job--say, as a cashier or waiter--since he had the brains to write a book. As he missed this most basic consequence of defaulting for the rest of us who can't plan on a lifetime of book royalties, one wonders how useful his next book (which is apparently about money) will happen to be.
3
Student loans are a somewhat different animal, since the folks bearing the loss (taxpayers) are different from the folks making the decision to write off the debt. But in general, the easier you make it to default on a debt, the harder you make it to get a loan in the first place.
But the best solution would be to get rid of student loans entirely. Schools should provide grants to the poor and the rest should pay their own way.
But the best solution would be to get rid of student loans entirely. Schools should provide grants to the poor and the rest should pay their own way.
23
I wish the full force of the Government would go after Mr. Siegel, that's what I wish. To get 3 college degrees in philosophy and then we have to pay for it. Incredible. And then he writes his self serving shtick about class warfare. Guess what, the philosophers are first on the list.
132
Mr. Siegel is a parasite and a conniving, self-deluding and congratulating manipulator who clearly planned his course of action from the start. His argument boils down to I want a pony. Selfish to a fault. He would encourage others to undermine the student loan program driving up costs for those who honor their debts to justify his own degraded actions. He is a poster child for banks looking to justify raising interest rates. I pity anyone who has contact with him.
115
I don't know Mr. Siegel, and can't evaluate his character based on the whole picture of his life as a writer and a human being. Apparently, you know him personally and intimately and are able to do so.
That said, regardless of his character (or lack thereof), one must look at the situation on the ground and his arguments and try to determine if the problem is centered on individual borrowers or the system.
I would say there are valid conservative critiques (the government made things worse by backing almost unlimited student debt, allowing educational institutions to jack up prices), and valid leftist/social justice critiques (it's unjust to single out one group of debtors for ineligibility for bankruptcy, education should be available at a lower price, etc.).
My observation would be that a combination of bad government policy (the student loan system), greed and corruption at universities, and bad bankruptcy law have created a social disaster. Whether you analyze it from a right-wing (too much government meddling in the system) or a left-wing point of view, there are problems, here, at policy/systemic level.
The fact those who disagree tend to heap moralistic scorn on individual defaulters/debtors, and make arguments based on the mechanics of a crooked credit system ("nobody will want to marry you;" "you won't be able to get a mortgage"), makes me think that side of the argument is getting pretty desperate.
That said, regardless of his character (or lack thereof), one must look at the situation on the ground and his arguments and try to determine if the problem is centered on individual borrowers or the system.
I would say there are valid conservative critiques (the government made things worse by backing almost unlimited student debt, allowing educational institutions to jack up prices), and valid leftist/social justice critiques (it's unjust to single out one group of debtors for ineligibility for bankruptcy, education should be available at a lower price, etc.).
My observation would be that a combination of bad government policy (the student loan system), greed and corruption at universities, and bad bankruptcy law have created a social disaster. Whether you analyze it from a right-wing (too much government meddling in the system) or a left-wing point of view, there are problems, here, at policy/systemic level.
The fact those who disagree tend to heap moralistic scorn on individual defaulters/debtors, and make arguments based on the mechanics of a crooked credit system ("nobody will want to marry you;" "you won't be able to get a mortgage"), makes me think that side of the argument is getting pretty desperate.
3
You write that "...the ramifications of defaulting and remaining in debt deliberately are usually real and lasting..." True, but there is something much worse: the ramifications of colleges deliberately defaulting on their side of the bargain - delivering a real education. That too, is "...usually real and lasting..."
The problem is not student financial debt. It's what that money didn't go for, an education.
What has been happening is unbelievable bad. And it's deliberate. Here is David Riesman on what he already saw in 1980.
..."the “wants” of students to which competing institutions, departments, and individual faculty members cater are quite different from the “needs” of students..."
and
"...advantage can..be taken of [students] by unscrupulous instructors and institutions...the student estate often does not grasp its own interests, and those who speak in its name are not always its friends...”
It has gotten much worse since then.
Because I believe that people need to see for themselves how bad it has gotten, I have a blog, inside-higher-ed, I tell how outrageously worse it has gotten since Riesman/s time. Now, we have uneducated graduates, fooled into thinking they can pay off those loans.
(College grads do make more than HS grads, but mainly because colleges that teach teacher don't deliver qualified teachers. Examples that demonstrate how that works are also on my blog.)
The problem is not student financial debt. It's what that money didn't go for, an education.
What has been happening is unbelievable bad. And it's deliberate. Here is David Riesman on what he already saw in 1980.
..."the “wants” of students to which competing institutions, departments, and individual faculty members cater are quite different from the “needs” of students..."
and
"...advantage can..be taken of [students] by unscrupulous instructors and institutions...the student estate often does not grasp its own interests, and those who speak in its name are not always its friends...”
It has gotten much worse since then.
Because I believe that people need to see for themselves how bad it has gotten, I have a blog, inside-higher-ed, I tell how outrageously worse it has gotten since Riesman/s time. Now, we have uneducated graduates, fooled into thinking they can pay off those loans.
(College grads do make more than HS grads, but mainly because colleges that teach teacher don't deliver qualified teachers. Examples that demonstrate how that works are also on my blog.)
12
Supply and demand is a pesky reality. People may think "wouldn't it be great if everyone could get a college degree?" So student loan programs are created, which makes the demand for enrollment go up, which makes tuition go up because the supply of good educational institutions do not increase proportionately. And then everyone has a college degree, so then it takes a graduate degree to differentiate in the workplace, which makes tuition go up again, along with the total debt required to get the education to get a decent job. Good intentions with unintended consequences. Just saying.
37
Steve, I think the data doesn't support your thesis, as college enrollment was extremely high in the 50's, 60's, and 70's, when college tuition wasn't high.
Joseph in Missoula
Joseph in Missoula
2
Here's one source: http://www.statista.com/statistics/185157/number-of-bachelor-degrees-by-...
I'm afraid that students in high school, as they pore over college viewbooks and put their most-wanted schools lists together, have an illusory view of what sorts of "college choice" they really have.
My guidance counselor in HS called my mother in one day and told her that I would be unhappy attending the local university and that I could probably get in to any Ivy League school except Yale or Harvard. But my college plans were already set, because the local university (an expensive private one), where my mother worked, would cover most of my tuition as part of her employee benefits, with scholarships and grants covering the rest of the fees.
I had no practical choice but to go to the local university because my parents were very debt wary and so was I as a result.
I sometimes do feel I missed out on some sort of basic young person experience by not getting to go to a "college of my choice," but in reality, I really did not have much of a financial choice. It was either the local university, or high student debt (which wasn't even as bad as debts students incur today).
I paid off all my student loans (less than $3000 worth) a couple years after I graduated. I'm mostly not sorry about it now, because I was able to start my real life after I graduated. That real life didn't include an Ivy League education. So what.
My guidance counselor in HS called my mother in one day and told her that I would be unhappy attending the local university and that I could probably get in to any Ivy League school except Yale or Harvard. But my college plans were already set, because the local university (an expensive private one), where my mother worked, would cover most of my tuition as part of her employee benefits, with scholarships and grants covering the rest of the fees.
I had no practical choice but to go to the local university because my parents were very debt wary and so was I as a result.
I sometimes do feel I missed out on some sort of basic young person experience by not getting to go to a "college of my choice," but in reality, I really did not have much of a financial choice. It was either the local university, or high student debt (which wasn't even as bad as debts students incur today).
I paid off all my student loans (less than $3000 worth) a couple years after I graduated. I'm mostly not sorry about it now, because I was able to start my real life after I graduated. That real life didn't include an Ivy League education. So what.
97
"That real life didn't include an Ivy League education. So what."
Except you feel compelled to tell us that you coulda gone to an Ivy no fewer than twice.
Except you feel compelled to tell us that you coulda gone to an Ivy no fewer than twice.
2
Why not bring this whole article to its logical conclusion? If you have to take on enormous debt to go to college, maybe you just shouldn't go to college. In fact, it would make more sense if all high school graduates would just boycott college--at least until universities start lowering their tuition rates. That's right. Put some pressure on the demand side of the equation. For $50,000 or $100,000, you could start a business. It might not be a big business, but you could probably start a coffee shop or bodega. Or maybe build your own iPhone app. Forget college. Forget taking out loans that just make bankers richer. Just don't go to college at all!
69
Yeah, the supply of bodegas is way off! Underserved market!
4
The problem is a new high school grad wouldn't be eligible for a loan of $50,000 or $100.000 and most haven't the life experience to be successful business owners. I see your point though. What needs to happen is the system needs to change so people can go to college. If I had it to do over - I would. I owe $200,000 even though I only borrowed $120,000 and I've paid off over $20,000 of that so I no longer care.
2
Yes, let's play the "logical conclusion" game.
In the distorted marketplace of American higher education, if people took your advice, higher education would be preserved for the wealthy. We would be reverting to the system in place before the GI Bill, Pell Grants, etc.
This is already happening in medical education. Medical school tuition has become so stratospherically high, talented middle class kids are simply deciding not to go. This reduces the pool of applicants and means medical schools have to dip lower into the talent pool. Instead of selecting for academic excellence or character, they effectively select for wealth.
This favors less-talented candidates whose parents are rich.
Being rich, they have more options (working part time, not using their medical degrees in clinical or research work), and are more likely to leave Medicine or work part time at an early age.
Is this the kind of system you want choosing who is going to be your doctor? Lawyer? The engineer designing your car? The Architect designing the building you live, work, or worship in?
Think of what the commodification and commercialization of education does, and think of the effects of making education, once again, the preserve of the wealthy.
In the distorted marketplace of American higher education, if people took your advice, higher education would be preserved for the wealthy. We would be reverting to the system in place before the GI Bill, Pell Grants, etc.
This is already happening in medical education. Medical school tuition has become so stratospherically high, talented middle class kids are simply deciding not to go. This reduces the pool of applicants and means medical schools have to dip lower into the talent pool. Instead of selecting for academic excellence or character, they effectively select for wealth.
This favors less-talented candidates whose parents are rich.
Being rich, they have more options (working part time, not using their medical degrees in clinical or research work), and are more likely to leave Medicine or work part time at an early age.
Is this the kind of system you want choosing who is going to be your doctor? Lawyer? The engineer designing your car? The Architect designing the building you live, work, or worship in?
Think of what the commodification and commercialization of education does, and think of the effects of making education, once again, the preserve of the wealthy.
3
I am surprised that anyone with a history of debt default (even if it was "no big deal") thought they could obtain a mortgage. It is no longer 2004 when anyone with a pulse could get a mortgage.
37
We have to meet our responsibilities.
When we sign on to a student loan, we should be prepared to pay for it.
I paid for mine and my daughter is now paying for hers.
It is not easy.
It is enormously frustrating to see articles about how to beat the system.
Are we fools for meeting our obligations?
When we sign on to a student loan, we should be prepared to pay for it.
I paid for mine and my daughter is now paying for hers.
It is not easy.
It is enormously frustrating to see articles about how to beat the system.
Are we fools for meeting our obligations?
57
William, not everyone has the resources that you have. We all live in the same country, yet we come from disparate environments and backgrounds. What you can do is not necessarily what the other one can do.
Joseph in Missoula
Joseph in Missoula
6
Trust me, I came from very a humble background.
I believe the government should provide education and even health care to it's citizens.
I also believe in taking responsibility.
Using borrowed money for education and then not paying for it should not be an option.
I believe the government should provide education and even health care to it's citizens.
I also believe in taking responsibility.
Using borrowed money for education and then not paying for it should not be an option.
2
Thank you for this article. I found the original op-ed piece rather reckless. If students (and their parents) do not understand the implications of the loans they are undertaking, it's hard to imagine they will understand the implications of defaulting. Especially when you consider that loans at least come with somewhat defined terms, whereas the 'go ahead and default' recommendation is based on the experience of one person.
93
"But Richard M. Bettencourt Jr., the secretary of the National Association of Mortgage Brokers and a lender himself with a company called Mortgage Network in Danvers, Mass., said he had never seen people with student loan defaults on their credit records get a mortgage. "
Not even in 2006-07? That has got to be a lie.
Not even in 2006-07? That has got to be a lie.
15
In Medicine, we have a saying:
"Anecdote is the last refuge of scoundrels."
Food for thought.
"Anecdote is the last refuge of scoundrels."
Food for thought.
2
Defaulting on a student loan is a risk, and because there's no collateral for that loan it'll never go away (Corinthian excepted). Sometimes that's what you have to do.
You got your education for free, but that doesn't mean you won't pay a price for it down the road.
You got your education for free, but that doesn't mean you won't pay a price for it down the road.
11
All taxpayers will have to pay as well.
That should not be ignored.
That should not be ignored.
14
Students who do not pay are simply following the lead of our cities, states, and the federal government. Spend beyond ones means and rely on bankruptcy or bailout. Students cannot print money or engage in quantitative easing, so it's tougher for them to emulate the federal government. Still, they have learned the lesson taught by our politicians.
12
Please direct us to any occasion when the federal government of the United States defaulted on its debt.
21
That's right! No default--just a gigantic bailout.
1
While it is easy to paint student loan defaulters as deadbeats and failures who get the bad consequences they deserve, the for-profit college debacle puts a different slant on it. Many of these "colleges" portrayed themselves in heavy marketing materials as high quality higher learning institutions with outstanding job placement records. Now we know many were scams entirely dependent on student loan programs to survive. If the private sector does everything better, why isn't there a single example of a for-profit college that prepares students for jobs even as well as your local public university?
26
Caveat Emptor.
Or better yet, do your homework before signing on the dotted line.
Or better yet, do your homework before signing on the dotted line.
7
Refusing to pay is acceptable if one is unable to pay. And, if after trying restructuring of the debt and other means, one is truly unable to repay, then discharge in bankruptcy should be the ultimate option with the attendant consequences to the borrower. Maybe all involved would think twice before borrowing/lending.
21
Bankruptcy is not an option for those who cannot pay their student loans. That is what is so difficult. Most people would face the consequences of bankruptcy if there was no other choice. The problem is that that choice is not there. The "choice" is wage garnishment. The "choice" is losing 15% (or more) of your social security or disability when that is all you have to live on.
I am astonished of the number of responders who are judgmental and mean-spirited toward people who can't pay their student loans--whose circumstances we don't know. Many commenters believe if "they" did it, everyone should be able to, that we, who prize individuality in this country, should what? all have the same resources? the same good health?
I know a lawyer who works with corporate clients seeking to discharge debt. Lots of debt. And the debt is always discharged. Yet an individual who is trying to survive has no recourse--none.
We need to stop indicting individuals and really study the profits of the banks (who gets paid in full when a debtor defaults), the collection agencies who are sold the defaulted loans and the colleges that offer only loans and no grants for their over-the-top tuition. It's a terrible system.
I am astonished of the number of responders who are judgmental and mean-spirited toward people who can't pay their student loans--whose circumstances we don't know. Many commenters believe if "they" did it, everyone should be able to, that we, who prize individuality in this country, should what? all have the same resources? the same good health?
I know a lawyer who works with corporate clients seeking to discharge debt. Lots of debt. And the debt is always discharged. Yet an individual who is trying to survive has no recourse--none.
We need to stop indicting individuals and really study the profits of the banks (who gets paid in full when a debtor defaults), the collection agencies who are sold the defaulted loans and the colleges that offer only loans and no grants for their over-the-top tuition. It's a terrible system.
6
Everyone wants free stuff, apparently. Bankruptcy and, I assume, then using the newly-free education to earn money for the rest of one's life. How dishonest.
6
A student fresh out of college is generally unable to pay and would be eligible for discharge in bankruptcy under your proposal. In the 70's when I was in college people talked about declaring bankruptcy on their loans as soon as they graduated. That is why student loans started to be protected in bankruptcy in the mid 70's.
6
Thank you for providing some balance to Mr Siegel's essay
44
I'd happily repay my loans, but when the government charges me 8% interest just to educate myself, I don't feel so bad about taking this course of action. Most other countries aren't as sickeningly divided and unwilling to make education reasonably priced. If I ever strike it rich, I will repay in full, but taking a job back home at salaries I can hope to get would mean half of my salary going to debt repayment. That is no way to live a life.