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Damn deadbeats.

So the usual suspects on Facebook are complaining about the Trump budget ending student loan forgiveness.

You know, I genuinely like most of those guys and gals I interact with over there.  We have various interests in common that have nothing to do with politics.

But you know what?  They’re full of shit when it comes to insisting student loans should be forgiven.

I paid back my fucking student loans.  Every damn dime.  In ten years after I took two years deferral after I finally left school for good.

I owed close to $20K between the federal loans and the state loans, for both my undergrad and grad school.  I never consolidated them.  I wanted them over and done with, I didn’t want to be paying on them for 20 years and handing the banks even more in interest.  And I’m here to tell you, that was NOT easy on what I was making in those days.  Even after I got married in 2000, the second income (and the nice raise I got at the same time) didn’t help as much as they could have, because my wife had student loans, too.  Difference between hers and mine were hers had actually gone into default, and she was paying them back under an agreement with the DoE.  And of course we had two cars, and two cats, and trips to visit her folks out of state, blah de blah de blah, so expenses generally increased to meet the available income.  Plus we got hit with the marriage penalty and owed the IRS $2K that first year before we realized we had to have more deductions on our 1040’s and fewer exemptions on our W4’s.

But we both paid back our fucking student loans, in full (and in her case, with the extra interest added while she was in default).  Because we took those loans out in good faith and always intended to pay them back.  Just like we took out auto loans and a mortgage and credit cards and commercial credit to buy our wedding rings (well, mostly her engagement ring; as I recall, our wedding bands were only $100 each) and all that good stuff.  Because, God damn it, when you give your word on something, you keep your fucking word.  My wife wouldn’t have defaulted on her loans if she’d had the money to pay them (and would probably have been able to defer them if she’d known to talk to someone about it at the time).

I cannot imagine someone going to school for four years and borrowing tens of thousands of dollars to do it, and then walking away with a degree and deciding, “fuck that, I’m not paying them back.”  That’s not how that works.  That’s not how any of that works.

Let’s enumerate a few things.

1. Not everyone needs to go to college.  That’s a lie perpetrated on every generation since (and including) mine.  A college degree is not for everyone, and not everyone needs a college degree.  There are lots of jobs out there that don’t require one (but may require different kinds of training) and which will probably pay you better money right off the bat, and in the long run, too.  Not everyone needs an English Lit major, but everyone is going to eventually need a plumber, or an electrician, or an auto repairman.

2. If you choose to go to college, you don’t need to go to fucking Harvard or Yale.  Try your state school system.  Try junior college if you’re not really sure what you want to do.  (Credits transfer, and they’re cheaper that way.)  The fact is that most employers in the real world don’t give a damn where you went to school, they want to know that you went to school at all.  It’s about completing things you start.  It’s about learning how to think logically and how to apply knowledge and skills you already have, while learning how to pick up knowledge and skills you don’t.  (I don’t have a degree in IT, I have a degree in History, but my title is “Senior Product Engineer” at a software engineering firm.)

3. If you choose to go to college but don’t have the money even for junior college — look for grants.  Look for student aid.  Read up on available scholarships.  There may be a scholarship sitting out there for left-handed red-haired stepchildren of mixed-race families.  If that describes you, go for it.  (There are scholarships out there with odder prerequisites — trust me.)  Closer to home, if your father or grandfather is/was a Freemason, reach out to the Grand Lodge in your state to see if they have scholarship money.  Ours does. You have to apply, there is quite a bit of competition, and the awards aren’t huge, but every little bit helps.  The K of C, the Odd Fellows, the Grange, they probably all have some kind of scholarship program.  Oh — and if you have a parent who works at a university, and that university has a tuition waiver program, plan for that university to be your alma mater.  (I worked full-time at my university for two years and got a 50% tuition waiver as an employee.)  And of course, if you’re a veteran, you’ve got the GI Bill and whatever other educational incentives the military throws your way.  I had a cousin who got a Masters in Nuclear Engineering while he was in the Navy (which he joined in 1967).  Of course, they expected him to work for that, and he did — he retired as a lieutenant commander with 20+ years in, and immediately went to work for a shipbuilding company as a senior engineer.

4. If you do in fact have to borrow money — borrow the bare minimum each semester that it takes to pay tuition, buy books, and cover other education-related expenses.  Don’t take everything they offer you, and don’t plan to borrow enough to get by without working.  That’s the first mistake a lot of people make.  Plan to work at least part time, even if it’s a work-study position at the university.  My Dad held no fewer than two jobs the whole time he was in school, even though he was on the GI Bill, because in his day, the Bill barely paid for tuition.  Especially when the university raised tuition every time the Bill got an increase.  It was uncanny…

5. Finally  — Plan to pay your loans back.  And make sure to graduate with a degree that is immediately useful so you can do that.  Despite what I said above, if you’re going to an expensive school or taking out a lot in loans, you have to be adult enough to decide to go into a field where you can afford to pay your loans back.  Which means, don’t go to a fancy dancy liberal arts college and graduate with a degree in English Lit, or Women’s Studies, or Political Science, or (even) History and have $50K in loans hanging over your head to pay back when you finish — because you never, ever will.  Not even with consolidation giving you 20 years to pay them back.  The banks will fuck you in every orifice you have if you consolidate.  It’s like taking out a mortgage on your brain, the only difference between that and a home mortgage being that they can’t foreclose on your brain.  But they can certainly fuck you over six ways from Sunday if you go into default.  And if you ever want a mortgage on a house, or hell, a loan to buy a new car, that will still be hanging over your head forever.

If you can’t do these simple things, and aren’t interested in STEM and/or aren’t the latest high school sports phenom that every university in the country is trying to sign, for Christ’s sake, DON’T GO TO COLLEGE.  Go to community college if you truly must have some sort of educational credential — an Associates degree takes only two years and can generally be obtained inexpensively, and if you apply yourself, you’ll be smarter (and better able to get smarter on your own) than you were when you started.  Or try trade school.  They’re cheaper, they’ll take it out of your pay at the job you’ll like as not get when you’re done (because a lot of the trade unions run their own schools), you’ll be making the big money right out of school while your friends with their basket-weaving degrees are still asking if you want fries with that, and you’ll be doing something worthwhile instead of pouring coffee at the local Starbucks.

At least have the decency to understand that by defaulting on or getting forgiveness for your student loans, you’re forcing me, my wife, and every other American taxpayer to underwrite your four years farting around in higher education to no particular benefit to any of us.  And that’s why President Trump’s budget zeros out practically all federal student loan forgiveness, streamlining it down to one program that ensures students will pay off a significant portion of their loans regardless.  You made a promise, now keep it.

And don’t whine about leaving school without a degree and still having to pay those loans back.  I did that myself, when I was 18, and spent two years working mostly to pay back that set of loans.  I didn’t go back to school till I was 24 and got NO financial aid until I worked two “F’s” off my transcript from that first abortive attempt at getting an education.  Between Pell grants and federal and state guaranteed loans, I graduated in 1991 with a BA in History and went directly into the MA program — which would have been impossible had I not been awarded a one-year $10K fellowship and 50% fees to do so.  (See — scholarships DO exist.)  After that I went part-time while I worked for the university, and finally walked away in 1994 when I went to work where I still work today.  I was able to defer repayment on the loans till 1997, when I had to admit I made too much money not to be paying them back, and they were totally paid off in 2006.  In the meantime, I’d financed and bought a condo on my own, then got married a year later.  I can guarantee you that I would not have been able to get the mortgage on the condo had I defaulted on those loans.  As it was, the fact that I never missed a payment helped immensely in establishing credit.

I do not regret getting a degree that I’ve basically never had any use for (other than to be able to say I’m a college graduate).  But I do know a lot about history and how to study it and write about it, which has made me a reasonable blogger and observer of the human condition (in my opinion).  If I regret anything about those years in the academy, it’s that I didn’t write my master’s thesis and graduate with the MA.  But oh, well — shit happens.

And I don’t regret for one moment being a man and a responsible adult who paid off his student loans honorably, and didn’t shift that responsibility onto the backs of my fellow Americans.

If nothing else, it gives me a bully pulpit to shame those of you who fucked off that responsibility so you could have nice things instead.  Fuck you all, you fucking deadbeats.  (I do NOT include in that group the victims of the Obama economy who spent years in the wilderness unable to find a decent job so they could pay those loans back.)

 


 

Now.  All that vitriol having been spewed, it boggles the mind that anyone can actually run up the kind of student loan balances I keep reading about, particularly when they aren’t enrolled in a STEM program or business school or med school or SOME school that will actually prepare them for a reasonably-paying job where they have half a chance to come up with the scratch to pay them back in 10 to 20 years.  (Although I continue to maintain that loan consolidation is a rip-off.)  What are the reasons for this?

Tuition increases since 1990, among other things.  (I left school in 1994 and was only marginally affected by tuition increases which have amounted, by some measures, to six times the rate of inflation.  However, I think the 6x increases came at the truly expensive schools, e.g., Ivy League, etc.)  This site compares tuition to CPU from 1990 to 2017 and concludes, “According to the U.S. Bureau of Labor Statistics, prices for college tuition and fees were 369.75% higher in 2017 versus 1990.”  If you change the start year to 1994, it concludes, “[P]rices for college tuition and fees were 229.04% higher in 2017 versus 1994.”  Wow.  So depending on where you start (and most of these studies I’ve seen begin in 1990), the average increase in tuition in the US has been between 2.3x and 3.7x since then.  And that’s about right; my wife, who obtained an MS in 2015, paid three times per undergraduate* credit hour what I paid at the same university thirty years ago.  I think the same ratio applied to graduate credit hours, but I don’t remember exactly what I paid.

So let’s apply that to the $20,000 I borrowed during my academic years.  I started borrowing in 1986 when I went full-time, and tuition didn’t change that much while I was an undergraduate.  So if we plug a start date of 1986 into that calculator I linked above, we get:

Between 1986 and 2017: College tuition experienced an average inflation rate of 6.14% per year. This rate of change indicates significant inflation. In other words, college tuition costing $20,000 in the year 1986 would cost $126,807.79 in 2017 for an equivalent purchase. Compared to the overall inflation rate of 2.63% during this same period, inflation for college tuition was similar.

WOW.

I could not have paid that back.  That’s like buying a freaking house — the one I live in, in fact.  My condo cost half that in 1999.  And I don’t know where they get that last sentence, because 2.63% overall rate of inflation is NOT “similar” to 6.14% tuition rate of inflation.

What the hell are universities thinking?  What in God’s name makes a college education three times more valuable today than it was in 1990?

This is mostly the fault of the Clinton Administration and subsequently Bush 43’s and Obama’s, all of whom let the student loan establishment run completely the hell out of control.  Go back to where I wrote about my Dad’s experience back in 1946.  The university raised tuition on vets every time the GI Bill was voted an increase by Congress.  You may think of tuition prices as being governed by a corollary of Parkinson’s Law, viz., “The price of tuition will increase to gobble up all available government tuition assistance.”  It was true of the Bill; it’s true of government student grants-in-aid and government-guaranteed student loans, too.

At the same time universities were sticking it to students, they were also collecting record amounts of research grant money — again, usually, from the government.  They were building grand edifices to education, too.  And hiring far more administrators to fill positions for which the need was, to be blunt, questionable.  In most cases, the new crop of administrators were more along the line of commissars or political officers, who were hired to administer things like diversity, harassment, quashing of conservative student organizations, and other general mopery and dopery.  And they were being paid far more than they were worth — of all that money extracted from students and taxpayers over the years.  (And we couldn’t get a simple parking garage built when I was at school, because the parking garage did not fit into the “academic mission” of the university.  On a commuter campus where 90% of the students drove in every day.  The university blamed this on the state government, of course, while in actuality not giving a damn one way or the other as long as faculty had a place to park.  But by God they built their fancy campus hotel and conference center on a tenuous claim that it furthered the academic mission.  Go figure.)

So now Donald Trump has proposed a budget that, according to CNBC,

would sharply curtail income-based loan repayment plans, scratch the Public Service Loan Forgiveness Program, embolden the government to go after students who don’t pay their loans and cut funding for federal work study in half.

OK, PSLF is just a taxpayer-funded sinkhole that builds on earlier programs that allowed certain teachers and Peace Corps volunteers to “work off” their student loans, so it can go. Frankly, PSLF isn’t needed; they can go into the income-based repayment plan.  It’s questionable to me whether they’d pay more or less that way; PSLF forgives loans after 10 years of on-time payments, but of course you also have to remain in a public service position during that period to continue to qualify.  I suspect the income-based program, even though it’s 5 years longer (see below), would either make this a wash or would swing a little one way or the other, but not enough to make that much of a difference. CNBC’s student loan expert bemoans that this will cause fewer people to go into public service careers.  I call bullshit, because most of the people I know who are in public service careers are in them because they believe in public service, not because they expect to make a ton of money at them.

Federal work-study funding ought to go and be covered by universities directly.  That’s what they have endowments for, and the work supposedly benefits the university by not having to be done by full-time staff who require benefits and all that.  If work-study is that important, and the university pleads poverty, let the state take up the slack.  (FWIW, I think work-study is a perfectly fine program, I just don’t think taxpayers should have to pay for it.)

The other, income-based, repayment plans would be cut from four separate programs to one.  Monthly payments would be capped at 12.5% of income (I can’t determine at the moment if that’s gross or net).  Currently the typical rate is 10%.  At the same time, the number of years needed to fulfill the program would be cut from 20 to 15. As CNBC notes, “[T]hey’d be paying more per month, but less overall.”  Well, duh.  Graduate students are not so lucky — they would have to pay back for 30 years.  Which makes sense, they borrow more money.  I borrowed as much for the 2 years of grad school I had to pay for myself as I did for my entire undergraduate degree.

And people who become delinquent will face stronger enforcement when DOE gets better access to IRS income data.  Well, tough noogies again.  You promised to pay those loans back.  We’ve been over that already.

The budget also eliminates subsidized student loans.  Good!  Subsidized student loans are funded by federal money borrowed from the Chinese.  Not having to service more Chinese loans is one less cost for taxpayers, and less money in the pockets of the Chicoms.

And all the changes to loans would not apply to borrowing that takes place before July 1, 2019.  So it’s not like this is going to happen tomorrow.  Besides that, Congress has to approve the budget, and you know damn well this is just the opening salvo in the budget negotiations. So if Congress has the ultimate say over what’s in the budget, and if Congress approves all of these student loan changes, how is this then Trump’s fault?

But all the MSM news bites are about the Trump budget cutting student loan programs.  Ain’t nothin’ been cut yet, boys and girls.  Cool your jets and have another craft ale.  There’ll be plenty of time for pissing and moaning later.

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* When you take an undergraduate class for graduate credit, which is common, you pay the undergraduate rate.  This is at least partly because you have to sit in class with undergraduates because there aren’t generally sufficient graduate students to create graduate-only sections for 300- and 400-level classes.  I paid graduate tuition for the two 500-level colloquiums I was required to take, as well as the 500-level class in Historiography that was required.  I also paid graduate tuition for the six hours dedicated to my MA thesis, which of course, I never wrote.