[quote=walterwhite]Eaves, I’m with you. But why should the debt be nondischargeable. If you go to say a school for cobblers and you sign up for big loans based on the lies of the school, and there aren’t really any cobbling positions, how is it just to say, well, student, you’re dumb, so, pay up forever.
On the other hand, saddling a couple classes with crippling lifetime debt loads will send a strong market signal to future students that education is a scam.
But so will acfew thousand successful lawsuits againts law schools.
The system is rife with lies. It seems reasonable to me that a potential student should be able to rely on a law school brochures employment statistics. And I’m a pretty cynical bastard. But there should be no lying there. People are investingbyears of life and hundreds of thousands in debt. It’s a pretty material misrepresentation as they go.
The correct move is to go down swinging by establishing extraordinary credit prior to school, getting unsecured credit in the hundreds of thousands in credit cards. Then going solo, in massive debt, making payments on the loans but seining for the fences in your own practice.
I am willing to change my mind.
Personal resp. And due diligence… After a lifetime of lies from the educational system?
Not sure…[/quote]
Scaredy, I see what you’re saying, but at this point in time, I can’t endorse a discharge of the obligations unless it is at the costs of the financiers who made the loans. And that will never happen.
Once again, just as with housing, we’re seeing the cost of cheap money. Lending institutions were able to borrow the money at the incredibly low rates generously provided by the Fed, and the only roadblock to the phenomenally lucrative profits that could be generated from the ever decreasing prime rate was finding enough lending opportunities (aka, suckers). This is how school financing went from borrowing just enough to cover tuition, books, room and board to paying for luxury apartments, foreign travel, cars, and clothing. In fact, Octomom denied receiving “public assistance” in order to raise her (then) six children while keeping a local Toys-R-Us in business and paying for weekly acrylic nails, plastic surgery and in-vitro fertilization treatments; she, instead, stated that her expenses were covered by educational loans.
This was my first clue that, apparently, there was no oversight on the use of “school loans”, and pretty much no restrictions on the amounts. In fact, just as they were with housing and with equity loans, lending institutions were encouraging students to take ever-increasing amounts of funds for education. I was always under the impression that school loans were like grants: you had to show proof of expenditures/projected costs, and the checks were made out to the educational institutions themselves. While you could rack up a respectable amount of debt, it did not compare with what students are managing to incur these days. The universities themselves (and I’m talking about reputable brick-and-mortar institutions) are actively involved in programs that encourage greater student spending discretion, resulting in lucrative payoffs to the schools.
This should not be surprising. The baby-boomers were the first generation to send a significant number of its members to college, to be able to attend immediately after high school, to be able to attend four consecutive years of college, and to be able to send a large number of females to college. All of these factors resulted in tremendous growth of existing colleges/ universities, and the formation of others, in order to meet the high demand. However, since the 1980s, colleges have been struggling to attract adequate amounts of students to replace the boomers.
Many schools that should have been closed down or consolidated long ago have, instead, remained open, and now are being forced to compete with the for-profit schools. Most are having to make all kinds of claims and promises regarding the quality of their educational facilities and staffs, and about the potential for post-graduation employment, and most are not beyond outright lying in their claims, or at least creative manipulation and presentation of statistics. In addition, they are having to spend money on very expensive nonacademic facilities (student health clubs, shopping malls, gourmet food courts) with which parents can bribe their kids to go to college.
There needs to be fundamental changes in the way that Americans look at a college education:
(1) It IS an education. You are going there to learn. The primary purpose is not to meet your soul mate(s), to party, to have fun, to shop, to play sports, to have an opportunity to go on Spring Break, or to get chosen for an MTV reality show.
(2) It’s not a place to avoid adulthood for another 4 years. If that’s your goal, tell your parents to find a Montessori preschool for you, instead.
(3) It’s not a place to stash your kid because (a) you can’t deal with him anymore, or (b) you want to brag to your friends about your kid being in college. EVERYONE can get into college these days. He/she isn’t special.
(4) There is NOT the guarantee of a job when you graduate. This bears repeating: There is NOT the guarantee of a job when you graduate. Most of you will not be worth any more to an employer when you get out than you are now (and perhaps even less owing to brain cells lost from excessive drinking and stupid fraternity pranks). Even for the few of you that truly work hard and excel in your Ivy League institution, while your chances of getting a job are better, there’s no guarantee. Get used to it, and then go out and see some employers to find out what they look for in prospective employees, and take what they tell you seriously.
My opinion is, that if the above sentiments were broadcast in PSAs on a round-the-clock basis, we would have about 1/10 of the number of college freshman entering in September as are now projected. Costs would be a lot lower, taxpayers would save a lot more money as would parents, and employers would be no worse off than they are now.**
However, as this is unlikely to happen, I’m hoping for (as mentioned in my earlier post) serious government overhaul of student financing. This should include mandatory consumer counseling for both students and parents. They should also make students borrow all the money at one time. Let’s face it: most people would hesitate to go on a $20,0000 shopping spree at the mall. But how many people have $20,0000 or more in consumer debt. It’s the sort of thing that just creeps up on you. Students and their parents are much more likely to be conservative when made to come up with one overall number for the cost of an education. There can be stringent guidelines under which the number can be revised at a later date.
There were millions of people in America who, in the late ’90s and early aughts, bought waaaay too much house, incurred far too much consumer debt, took out too many HELOCs, and bought vehicles that were way out of their league. They did this with the full endorsement and assistance of the “smart guys” in the finance industry, because there was seriously big money to be made in “making loans” (collecting on them turned out to be not so lucrative…). This happened to the little guy on the street who was a 9th grade dropout, but it also happened to a shitload of guys and gals with advanced business degrees. The excuse they all cited was, “The bank wouldn’t have loaned me the money if I couldn’t afford it.”
This is the exact same situation as the one facing education loan recipients and their parents. I’m sorry for what they are facing, but nothing takes the place of due diligence. It doesn’t take long to figure out how much you can afford to borrow, especially now with the loan payment calculators available online. As I mentioned in my post the other day, $300K of debt translates into payments of $3,000 to $4,000 per month. Is it that difficult – especially if you are law school-eligible – to figure out that this is going to be an extremely difficult nut to cover? Also, it’s not that hard to look up actual employment figures: everything you need is available from the Department of Labor. It’s quite easy to determine trends in various employment sectors (cobblers, for instance).
Yes, I was born with a healthy amount of hard-wired skepticism (legend has it that I asked the delivering obstetrician if he was board-certified). I don’t take anyone’s word as gospel. However, when a $300,000 (that can easily grow to 2 or 3 times that amount) loan is involved, you bet I do a minimum amount of homework. When you tell me that a student of the law, of all professions, is bellyaching about the school lying to him, about paying too much for law school, about not knowing the particulars of his loan arrangement (including the amount), about the amount owed increasing because he hasn’t made payments or contacted the lender, I’m thinking that maybe the biggest mistake he made was in his choice of a profession. If there is anyone that should know better than to blindly take someone’s word as truth or to trust advertising, it’s a lawyer. And I would hope that, after 3 years in law school, he’s at least somewhat acquainted with contract law.
I do believe that the lenders should be prohibited from their (seemingly) arbitrary assessment of usurious interest, penalties, and late fees on education loans (actually, on all lending, but I won’t go there…). I think that, like all other cases of legal highway robbery, this is designed solely to engender huge profits for the lender and harass the borrower. However, I cannot endorse the abdication of responsibility for debts incurred by an intelligent and mentally competent adult.
For a textbook example of why education should not be considered an automatic right, check out the author’s story on the “Esquire Painting” website: http://esquirepainting.blogspot.com/ This is a guy lamenting his five-figure law-school loan balance from the early ’90s, who, IMHO, never should have gone to law school. He’s either refreshingly honest, or just clueless, but he’s very open about his experience, including his transcripts from Touro Law School, and grades from the Bar Exam he never passed.
**I am NOT against education. As a matter of fact, I firmly believe that we Americans need to acquire a helluva lot more. It’s a disgrace that a nation with so many resources has a population that is as undereducated as we are. And before anyone gets on my case about money and privilege, let me state that I’m including most of the college educated among us in that assessment. We go to school, and incur a lot of debt doing it. Yet we are, for the most part, not educated. Studies of college graduates are consistently showing that many are reading at no more than a fourth grade-level. We not only are far behind other nations in advanced math and science, but many of us can’t perform basic arithmetic functions without a calculator, such as division or percentages. To me, that’s the biggest lie being sold us by the university/college establishment. Instead of demanding that students function at the appropriate level, schools are “dumbing down” on their curricula, and pressuring instructors to grade students unfairly in order to raise their school’s ranking. They are not only sending uneducated and unqualified workers into the labor force, but workers that expect similar preferential treatment on the job.
