Forgive College Debt Now!... man.
A couple weeks ago, I received an email from my younger brother asking me to support Rep. Hansen Clarke's H.R. 4170 - The Student Loan Forgiveness Act of 2012. My brother is not overly political. He's a recent college graduate living in a major Midwestern city, has 2 part time jobs and works hard. I've never received an email from him regarding politics or asking me to support or work against specific bills or even specific candidates. This stands in contrast to my Father who loves to send out anti-Obama blast emails to our family and friends, both Democrat and Republican...
At any rate, this was the first "political" email I have ever received from my brother. The bill, H.R. 4170 - The Student Loan Forgiveness Act of 2012, which you can read about here, supports "forgiveness" of student loan debt if the indebted pay the equivalent of 10% of their income for 10 years on their debt. After the 10% for 10 years, all remaining debt is simply "forgiven." Rep. Clarke claims the bill would make student loan payment both "simple" and "fair"... I agree with the former but not the latter.
I told my brother I could not support the bill. When he inquired as to why I could not support it, I sent the following email to him:
So if I'm a psych major who just graduated and I went to Harvard, I'd have $160,000 grand in debt. I get a job at Starbucks for 30 grand a year because i have no skills. I pay back 10% per year for 10 years, $30,000, and the remaining $130,000 is "forgiven".... so who is going to pay the remaining $130,000?...
Well, all the other taxpayers would have to pay for it... many of whom never went to college or decided not to... so in a sense many people who never went to college have to pay the bill for those who did go to college
Doesn't seem "fair" to me...."
There has been much said about college loan debt over the past month, on CNN, on the WSJ and in popular media at large. Is student loan debt a "bubble," is it toxic, does it hinder economic growth, or is it "no big deal, man?" Graduation is fast approaching in a little over a month and all of those psychology, sociology and anthropology majors out there are realizing that they may have made a "huge mistake" to quote GOB Bluth.
Like many Democrat bills, this particular gem supports the transfer of wealth from those who made wise decisions to those who chose to made poor decisions. The plumber down the street gets to pay for the flip flop wearing psych major's "degree" despite the fact that he chose to make the responsible decision and not go to college, thus not spending $100,000 on a 4 year binge drinking vacation.
The only hard part of this for me is that I sympathize with my brother. He, along with millions of others followed the conventional wisdom of the baby boomer generation: "All college education is valuable and a 'good thing.' The debt you incur is 'no big deal.'" I for one knew absolutely nothing about debt when I went into college and knew only slightly more than nothing when I graduated (remember, no math, I was a psych major). I was lucky in a sense because I went in state to the University of Illinois while my brother went to an expensive Jesuit school. Many college graduates are graduating with tens of thousands of dollars in debt. I would suspect very few of them were truly aware of the huge financial decision they were making before they ever worked a day in their life.
Thomas Sowell once remarked that Progressive arguments are simple and often only one step. "College debt is bad and hinders economic growth, therefore we should forgive it." Or "home ownership is good therefore everyone should own a house." Conservative arguments, on the other hand, require two, or even three steps. "College debt is bad and hinders economic growth. BUT people have to be responsible for the decisions they make. Not only that, but forgiving college debt will, in the long run, cause more problems than it creates and will continue to perpetuate rising college tuition rates."
This bill also strikes me as the typical Democrat strategy of baiting those in trouble with promises to make it all better. Of course, can't just make all those bad life decisions go away and the initial problem will likely persist in that person's life for years, but none-the-less, those who are baited are likely to pull the lever for a Democrat every other November.
Nationally, student loan debt tops one trillion dollars, folks. Get ready to tell the recent college grads in your life why they should have to pay their own loans back without government help...
You should also get ready to tell those high school grads in your life why they should skip the whole mess entirely.
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Aug '11
Re: Forgive College Debt Now!... man.
I just love these conversations regarding forgiving debt regardless if it's about mortgages or student loans. I am very sympathetic to those whose homes have been lost due to loss of employment. I am not sympathetic to those who purchased "too much house" to logically manage payments. The same can be said of student debt. When we had "the talk" with our son regarding college choices, it also included a discussion regarding making responsible choices based upon debt after graduation. Knowing that his chosen profession included further education, he knew that he needed to graduate with no debt in order to manage possible future debt. It's about making smart choices. It's not about waiting for someone to bail you out when those choices come back to bite you later.
Jul '11
Re: Forgive College Debt Now!... man.
What did your bro say? So if this passes then I'll regret paying it all back like I promised when I took the loans. Who knew contracts had no honor anymore?
May '10
Re: Forgive College Debt Now!... man.
I may have told this story before... (Which is alright because A. You can't stop me and B. I have always found it easier to get new audiences than new stories.)
My wife met an acquaintance she hadn't seen for a while and the lady was complaining that her daughter had been out of college for over a year and was back living at home with no job prospects. The girl got a degree in Women's Studies.
To go over a hundred thousand into debt for an unmarketable degree is insanity. It's not Wall Street these idiots should be angry at, it's the snake oil professors and administrators in the universities that should be strung up.
Wait until the Obama administration starts touting "free" post secondary education as its next election year promise.
Jun '10
Re: Forgive College Debt Now!... man.
He didn't say too much, just pretty much accepted my comments and moved on... I don't think he's necessarialy thought it all the way through. He just knows he has way too much debt for an average education.
Once the recent college graduate gets that first loan payment form, they may realize what the homeowner who has too much house has realized after their first mortgage payment....
Jun '10
Re: Forgive College Debt Now!... man.
Exactly. Most people are skeptical when they see advertisements for good investments or when they talk to their retirement planner or a car salesman. Yet, the received wisdom from the academy (who are also salesmen) of the last 50 years is just accepted without question - the wisdom that college is good and thus everyone should go to college regardless of cost.
Mar '12
Re: Forgive College Debt Now!... man.
The enormous amount of federal money poured into the higher education system, to ensure every child had a college education, is in large part what drove college costs to far exceed any rational connection to inflation. The beneficiaries of that have been primarily colleges and universities.
I would suggest that the fat-with-endowment colleges consider assuming some or all of the debt incurred for their grossly inflated costs and to help swell their endowments. The list of colleges with endowments exceeding $1 BILLION is very long indeed. Harvard alone is about $20B, Princeton $17B.
It is certainly not appropriate for taxpayers to once again assume lawful, contracted debts for persons with buyer's remorse. I get it! It's a lot of money for someone just starting out. It will be hard! It will be a struggle! But they knew that when they signed up for the loans. Taxpayers assuming legitimate debts (or even illegitimate debts) of selected individuals is unfair and an entirely inappropriate use of public funds.
(By the way, I went to college and law school at night, and did quite well in my career. I'm not sympathetic!)
Mar '12
Re: Forgive College Debt Now!... man.
EJHill: I may have told this story before... (Which is alright because A. You can't stop me and B. I have always found it easier to get new audiences than new stories.)
My wife met an acquaintance she hadn't seen for a while and the lady was complaining that her daughter had been out of college for over a year and was back living at home with no job prospects. The girl got a degree inWomen's Studies.
I am always skeptical of these people who "can't find a job" with a humanities degree. I have a BA in History, class of 2009, and I've never had a problem finding clerical work, and I've been on the job market in two different states since graduation. It's not the most glamorous stuff, but my talents were usually recognized in the workplace and I subsequently got more responsibility. I've never made tons of money, but I could live on my own with roommates (or in my case, with a husband or paying rent to my parents). It's not THAT hard to get an entry level job with a degree, any degree.
May '11
Re: Forgive College Debt Now!... man.
I have said many times before at this site that borrowing money for education is a sucker bet. What I don't understand is why defaulted student loans cannot be currently absolved through bankruptcy. Is that true and what are the ramifications of that as it pertains to this legislation?
Edited on April 2, 2012 at 3:22amDec '10
Re: Forgive College Debt Now!... man.
I went the GI Bill route, no regrets. Sure, my political science degree has no bearing on driving trucks or cranes, but at least I have grand things to think about while doing mundane tasks...
Re: Forgive College Debt Now!... man.
Off topic here...but I just love that, EJ! You sound like George Burns!
Oct '10
Re: Forgive College Debt Now!... man.
Madcap
I am always skeptical of these people who "can't find a job" with a humanities degree...
It's not that they can't find a job. They just can't find a job that pays them as well as their parents will pay them to sit around the house doing nothing and waiting for their dream job to fall into their lap.
If your bills are being paid, why take some clerical job that's just beneath the dignity of a person with your ability to intelligently explain the nature of global injustice to friends in coffee shops?
Parents are a big part of the problem here. Parents are supposed to have gleaned some wisdom over the years, and yet they often sit by and allow their children to feel "above" taking any job that isn't precisely what that child has always imagined for themselves.
May '10
Re: Forgive College Debt Now!... man.
Sit down, David. I'll sing you 14 or 15 numbers. Red Rose Rag anyone?
Feb '11
Re: Forgive College Debt Now!... man.
Samwise, don't you know that the real reason you don't want to forgive college debt is because you're mean? All conservatives are mean, therefore the only reason we don't want to help others is because we're mean. Come on, man! Or, as Bill Whittle would say, because we suck.
Edited on April 2, 2012 at 4:20amFeb '11
Re: Forgive College Debt Now!... man.
Not repaying borrowed money is theft. Doing it via legislation doesn't make it any less of an act of theft - it simply means that one is a coward without the decency to hold the gun and perform the robbery oneself.
Blake has it just right. To take a job below what you wanted in order to make ends meet is a basic act of honor; putting your responsibilities above your desires shows an actual transition to adulthood. Likewise, keeping your children in a state of infancy by shielding them from the consequences of their actions is an act of child abuse.
Feb '12
Re: Forgive College Debt Now!... man.
I've always told my sons that a college degree will do two things for you. One, it will get your foot in the door of a prospective employer - a college education shows your industrious. Two it, with industriousness, will allow you to put food on your table. My oldest went to college and found a good job. My middle boy chose not to go to college even though I think he is equally smart. My oldest son got his brother's foot in the door at his employer. Now my middle son has a good job there and just paid cash for a condo. I feel like we got a tu-fer!
Jul '11
Re: Forgive College Debt Now!... man.
Peter Gothgen, Bastiat called it legal plunder. That still seems appropriate.
Jul '11
Re: Forgive College Debt Now!... man.
Of course we should forgive student debt. Since education is so important to the nation and our future, we should also nationalize all colleges. All school personel should become government workers paid on par with their high school counterparts. All citizens should be required to attend college to the Masters or Phd level and parents should be required to house and maintain their children till they graduate or reach age 26. All graduates should be hired by the government until they can find a job elsewhere, if they can't find work then they can stay in the government. Since the government is the number one employer in the country and via the commerce clause is responsible for all commerce in the country both public and private, the government should select what field each student should study. This might be based on aptitude but mainly on what the country needs or will need for the future. Those that fail out of college could be sent to the military for training.
May '10
Re: Forgive College Debt Now!... man.
Samwise Gamgee
Your brother wasn't a psych major from Harvard, by any chance?
Apr '11
Re: Forgive College Debt Now!... man.
I disagree. A loan is an investment the failure for some one to pay you back means you made a bad investment. It is no more stealing to default on your loan than it would be stealing if you sold stock in a company that eventually went bankrupt. It is only stealing if you can prove the debtor never intended to pay back the loan, but I think that is fraud.
The main problem is that students can not default on their loans. They should be allowed to default through the same means as on other loans. This will then send a strong signal to banks and lenders not to be so loose with the money. In this case I guess the lender now is the US government, but I think the principle still stands. The US government made bad investments. It should eat its losses and stop giving out these loans willy nilly.
Apr '12
Re: Forgive College Debt Now!... man.
From my perspective as a high school graduate: 1. the school guidance counselor was worthless 2. high school did not train students to make financial decisions 3. college is a long term bet on the economy and employment market that can change rapidly. In 1972 I was shocked when the 'bright future' educators promised was not there after 5 years earning a Communications/Political Science degree. Thankfully, I had no debt to go with what was a worthless degree from a state university at the time. I have used a little of what California's taxpayers provided, but most of what I use on the job . . . was learned on the job, and from after work reading. The ROI on my college training was very poor.