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Writer: "Why I Defaulted On My Student Loans"
schwit1 writes: There are some valid points raised in Lee Siegel's 1,100 word rant against college loans (if not so much against college education). There are also some bad ones. But two things are clear: the words "personal" and/or "responsibility" were used precisely zero times. Siegel, who described himself as "the author of five books who is writing a memoir about money," is hardly a glowing advertisement for the return on nearly a decade in university just to achieve a Master of Philosophy degree.
Siegel says, "As difficult as it has been, I’ve never looked back. The millions of young people today, who collectively owe over $1 trillion in loans, may want to consider my example. It struck me as absurd that one could amass crippling debt as a result, not of drug addiction or reckless borrowing and spending, but of going to college. ... The rapacity of American colleges and universities is turning social mobility, the keystone of American freedom, into a commodified farce. If people groaning under the weight of student loans simply said, 'Enough,' then all the pieties about debt that have become absorbed into all the pieties about higher education might be brought into alignment with reality. Instead of guaranteeing loans, the government would have to guarantee a college education."
Siegel says, "As difficult as it has been, I’ve never looked back. The millions of young people today, who collectively owe over $1 trillion in loans, may want to consider my example. It struck me as absurd that one could amass crippling debt as a result, not of drug addiction or reckless borrowing and spending, but of going to college. ... The rapacity of American colleges and universities is turning social mobility, the keystone of American freedom, into a commodified farce. If people groaning under the weight of student loans simply said, 'Enough,' then all the pieties about debt that have become absorbed into all the pieties about higher education might be brought into alignment with reality. Instead of guaranteeing loans, the government would have to guarantee a college education."
Get your general education classes done at a junior college. Much cheaper. Then transfer to a 4 year school if you're career path requires it. Note the emphasis on the word "requires". Don't go to college if your career doesn't need it. There's no point in graduating with what essentially is the size of a home mortgage. You're starting in the hole and you don't need to do that. The sooner that you can get into the workforce with a good paying job, the better off you will be. You can buy a car and home much earlier in life. You can also start saving for retirement earlier which makes a huge impact on when and how you can retire.
"A plan fiendishly clever in its intricacies"- Homer Simpson
...instead of guaranteeing loans, the government would have to guarantee a college education.
that is what we do. Works fine, here in Europe.
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
Guy goes to one of the most expensive schools in the country, in one of the most expensive cities in the world. Gets an advanced degree before starting to earn a living. He doesn't have a full time job till he is 31, http://en.wikipedia.org/wiki/L.... He also manages to get fired from the New Republic for doing things they wouldn't even do http://www.nytimes.com/2006/09....
But somehow Society is to blame for HIS bad decisions.
Also missing from the article but something potentially change your interpretation of it:
1. It's there implicitly but it's worth to make explicit: "when I was 17, I went with my mother to the local bank" means that this delightful anedote happened in 1974, a long time ago both in years and in differences in tuition prices and legislation around student loans.
2. There will be a lot of talk about federally guaranteed students loans but his loans where unsubsidized private loans with a private bank.
The whole article is flamebait because it piggybacks in the current perception that the student loan system in the U.S. is flawed but offers an anecdote from a very different time and background than ours.
Actually if he's transferring his student loan debt to the credit cards the advice is brilliant.
Indeed - you can wipe out credit card debt by declaring bankruptcy. Not possible with government loans.
So, really, "brilliant" only if your plan is to be unable to get any sort of credit for the next 7-10 years.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Obama isn't a socialist or even much of a progressive; from what I recall, he's somewhere between Eisenhower & Nixon on most issues.
Pain is merely failure leaving the body
Sorry but all of the administration staff in ALL colleges are grossly overpaid.
Also the sports coaches are disgustingly overpaid.
Fix those two problems and then come back with your "college cares about the students argument"
Do not look at laser with remaining good eye.
He's within 10 points of Hillary in Wisconsin.
Until 1987 or so, the cost of college in Texas was extremely low. I was very frugal and my entire expenditures for tuition, room and board from Sept 1981 to Sept 1982 was $2500. At the time minimum wage was $3.35. A person could work a part time job (15 hours a week) and pay for this. I'll bet that most of the tuition collected by the University of Texas at the time was directly from the students or the student's parents with grants and scholarships coming next and student loans running a distant fourth. As the government made student loans more available in order to make college more available the government accomplished the opposite of the desired effect because the government ignored basic economics. Making more money available affects spending at the universities which affects costs. Universities are money spending machines. The University of Texas now has more than double improved square footage that it had in 1981. The buildings are nicer too. But the size of the student body has not increased proportionately. The university simply spends more on building and maintenance. Far more than it spends actually delivering an education. Under the current system your hard earned tax dollars are going to build monuments rather being effectively used to educate. We had a system that did the opposite quite effectively and we could have that again. Instead of being cheap with your tax dollars you should be angry with how they are being spent now.
The major problem with student loans is that there is no longer any escape from them. Bankruptcy does not discharge them. You're stuck with them for life.
That is a major departure from traditional debt laws, and this is just wrong. People should be able to escape their mistakes after appropriate penalties.
A student, 18 years in age, cannot comprehend the gravity of the loans they are taking out. The whole situation is rotten: you are told that you MUST get a college degree, otherwise you will be a lifelong failure. You are told that IF you get a college degree, your future WILL be rosy and bright. You are told that ONCE you get a college degree, you WILL get a good job and then paying the loan off will be no problem.
That is the extent of your knowledge when you are 18. You have no idea how much your salary will be in four years, in fact, when you are 18, it is very likely you don't even know how much your parents make, or how much anyone makes beyond your knowledge of minimum wage. All you know is that you have to go to college and get that degree so you can get a good job. At least that is what my parents told me, and when I was in college, that is the same set of assumptions that everyone was operating under.
And once you get that degree and you can't get a job in your chosen field of study, or maybe you don't even get that degree (because a lot of people don't make it through college - many college programs, particularly engineering, are actually DESIGNED to weed people out), then you are sitting there with a stack of loans and no way to reasonably pay them off.
Prior to 2001, you could try to pay them for a while, but after finding that you were getting deeper and deeper in debt, you could take a deep breath, assess your situation, and then take your lumps in the form of bankruptcy - knowing that you would have a finite period of time in which you would be penalized by a bad credit rating. But at some point it would be over.
In 2001, congress changed the law to eliminate the discharge of student loans from bankruptcy. Any other financial failure is redeemable, but a decision that you made when you are 18 years old, a failure that is not easily foreseeable (because people don't know their capacity, people don't know their future earning potential, people don't know what the job market is going to do), is not forgivable. Never, until the day you die, and even then, your estate will be on the hook for them.
And the loan companies are given extraordinary power, backed by the government, to collect their debts. Hey, if someone owes me money, I can't attach someone's tax returns - but student loan companies can do this. It is also very hard for me to garnish someone's wages to collect a debt because there is always the threat that the person will file bankruptcy. The lack of that threat here gives student loans extraordinary power.
That is the problem here, and it will take people like Lee Siegel, doing what he did, to bring this to the forefront of discussion. Certainly any abuse of the student loan process should be curbed, but an iron shackle on everyone is not the right response to any potential abuse.
Why is higher education only useful for helping you making money?
It isn't ONLY useful for making money, but money is what you use to pay back your loans, so "making money" is ONE of the things your degree should be useful for, if you are going into debt to get it. Borrowing money to get a degree is philosophy is dumb.
I majored in engineering, at an in-state public university. I worked on weekends, and during the summer. The day I graduated, this was my total debt: $0.
Can't win the lottery, can't close escrow, there's some others but those are the ones that people tend to remember.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
Not only correct, but I myself can't personally fathom how anybody comes out of school with a pile of debt. I spent about 7 years in college (three of those years were wasted on classes that I took for not knowing what I wanted to do, so it isn't as if I'm perfect) and I didn't borrow a cent. My bachelors is in IT management, and I got my degree by first going to community college (dirt cheap) and then doing online classes at the cheapest state university to finish the bachelors.
I'm presently making more money than everybody I know who went to the supposed best university in this state (ASU) and who also did get a lot of student debt, where I have zero. In fact after the grants I received I actually managed to come out of college with surplus cash.
So only kids with trust funds can study philosophy or art and get to be a museum curator or somesuch?
Nope, I said no such thing. What I said was that you should consider that the market for "museum curator"s is incredibly tight at best, so you'd better know the risks before you take on a mountain of debt in an attempt to be one.
Quo usque tandem abutere, Nimbus, patientia nostra?