Sunday, September 18, 2016

Student Debt, the New and Shameful Rite of Passage

American rites of passage have been consistent over the last two or three generations. The signs of fully blossomed and confirmed adulthood rest on the achievement of several successive steps. These cultural landmarks include lots of firsts: purchase of a first car, first marriage, first child, and first mortgage. But now, a new, unnecessary, very dangerous mountain to scale is in place. It is the most recent rite of passage and many are stuck in quicksand. Due to the calamity that may soon blow up in our face, it is an issue that must be addressed immediately. Its name is student loans, a perilously irresponsible system that gives thousands of dollars in borrowed money to finance soaring tuition and related expenses.

Last week I received grateful confirmation through the mail that my student debt requirements had been fully met. Though it was welcome news, I felt as though a great crushing weight had been lifted from my shoulders. It was a feeling both weary and grateful, but surely nothing worth celebrating. I suppose one could call it a joy of a sort, but it was mainly a relief, the way you feel when a crushing headache finally fades away. No longer were these financial requirements hanging over my head. I should be happier, but I am not.

I was reminded of the Morrisey song, “The More You Ignore Me, The Closer I Get”.

When you sleep/I will creep into your thoughts/like a bad debt/ that you can’t pay.

It took me approximately twelve years of consistent monthly payments to rid myself of $18,000 in debt. $9,000, half of the original loan, was not interest-bearing. No harm there. But it was the second half of the loan that was the real killer. By the time I’d caught up to the principle, interest had added another $4,000. In totality, I owed $22,000, and I was saddled with a ton of outstanding debt before I ever entered the work force, before I even graduated or interviewed for my first job out of school.

My story is nowhere near the worst example of this kind of predatory practice. I live in Washington, DC, a city full of elite private schools. Georgetown, George Washington, and American University charge yearly tuition at rates three and four times higher than my public college university education. Students without scholarships or benevolent parents have no choice but to borrow money in excess. In addition to being a bad idea just on principle, eighteen or nineteen-year old young adults barely out of high school should never be given extravagant loans in the first place. I don’t mean to sound ageist or condescending, but in my defense, I am not very far removed from those times myself.

I had no clue whatsoever about what it was like to save for a rainy day. In those days, I lived an unstructured existence, swimming with the currents, living for the minute, and expanding my social life. Such is its very nature for many white, middle class kids like me. This is how we have defined what we collectively call “college”.

But nowhere in that narrative is an emphasis on money management. I myself was too enthralled with life on my own out of high school and away from my parents to think about socking money away or being generally parsimonious. If I had it to go over again, I wouldn’t make the same mistakes. But then again, if I could redo college entirely, the first thing I’d do is focus more on academics, and turn a few lazy B’s into A’s.

I was young and made mistakes. Having said that, let’s collectively make a change for the better. Colleges, universities, junior colleges, and community colleges offer advisers to help students figure out how to schedule classes and to intercede when they don’t make the grade. Why can’t the same be done with managing student finances, especially when they take the form of such huge, sprawling loans? Or, to go one better, why don’t high school seniors take preparatory classwork to show them how to manage their money before they even set a single foot on campus?

How did I waste money, you may ask? Lots of ways. Instead of demanding my way and insisting on complete independence, I could have saved money by living in a dorm. Instead I moved in alone to an off-campus apartment where the rent and utilities were twice as much. I partied hard on weekends, spending money on little things that add up, like brunch and restaurant meals, plus more than a few alcoholic beverages that I probably shouldn’t have consumed in rapid succession to each other.

I drove everywhere I went. Along the way, I had a couple fender benders and speeding tickets. Even more expense. This caused my car insurance rates to go through the roof. One auto insurance company even canceled me altogether, forcing me to buy insurance with a second company who charged a much higher rate. These are mistakes of youth, inexperience, and immaturity. My most inexcusable expense was the purchase of an pricey guitar on layaway, an impulse buy that I couldn’t really afford, even on the installment plan. I spent money like water, not understanding the very concept of debt to follow, and was generous to a fault with everyone.

The system of four-year colleges and universities must be radically restructured. Middle management and administration has grown like a cancerous tumor inside higher education. At the same time, they’ve gamed the system in their favor. Colleges and universities are aware that students cannot default on the loans they casually disperse and, as a result, they are unafraid of the consequences or any outside retribution. Even if students who have taken out loans declare bankruptcy, no student’s debts will ever be wiped clean. If they find themselves federally disabled, their loans will be garnished from whatever minuscule monthly payments the government provides.

The only way a person can be entirely rid of student debt for once and forever, aside from paying off all financial obligations, is not publicized much. Too much money is involved to spread the news around freely. This option requires a genuine physical or mental disability, a severe limitation few would wish upon themselves. In that circumstance, a doctor must fill out an applicable form for a patient, stating the nature of total and permanent disability.

If approved, the patient must live at no more than twice the poverty line for three years consecutively. Then and only then will financial obligations be no longer applicable, the loans fully discharged. But who would want to live a pauper’s existence in order to be debt-free? Should a person want to return to school and take on more debt, the fine print states clearly that a full discharge of debt will be a one-time-only affair. For the moment, these qualifications and parameters are the only way to escape the bad choices and unfortunate instances of our past. Who among us would like to hit the restart button on a portion of their life?

This example and others illustrated here demonstrate how much student loans and university systems are out of control. If significant changes are not made and not made quickly, higher ed will effectively kill the goose that laid the golden eggs. Universities and college will have to prune down substantial dead-weight, redundant bureaus, needless departments, and nonsensical complications. But really, we shouldn’t be callous and heartless. Our energies shouldn’t exclusively center on a busted system and the bottom line only. We are preparing our country and the world for future leadership, and if our young adults don’t thrive, we’re the ones who ought to bear the blame.

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