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The Student Loan Debt Disaster

He and his parents believed the all-American myth about college -- and the debt crushed them all

This is a riveting essay by M.H. Miller, who writes about the crushing effect of student loan debt on his life. Here’s the heart of it:

My debt was the result, in equal measure, of a chain of rotten luck and a system that is an abject failure by design. My parents never lived extravagantly. In the first years of their marriage, my father drove a cab. When they had children and my father started a career in the auto industry, we became firmly middle class, never wanting for anything, even taking vacations once a year to places like Myrtle Beach or Miami. Still, there was usually just enough money to cover the bills—car leases, a mortgage, groceries. My sister and I both attended public school. How much things cost was a constant discussion. Freshman year of high school, when I lost my yearbook, which cost $40, my mother very nearly wept. College, which cost roughly $50,000 a year, was the only time that money did not seem to matter. “We’ll find a way to pay for it,” my parents said repeatedly, and if we couldn’t pay for it immediately, there was always a bank somewhere willing to give us a loan. This was true even after my parents had both lost their jobs amidst a global financial meltdown. Like many well-meaning but misguided baby boomers, neither of my parents received an elite education but they nevertheless believed that an expensive school was not a materialistic waste of money; it was the key to a better life than the one they had. They continued to put faith in this falsehood even after a previously unimaginable financial loss, and so we continued spending money that we didn’t have—money that banks kept giving to us.

I’ve spent a great deal of time in the last decade shifting the blame for my debt. Whose fault was it? My devoted parents, for encouraging me to attend a school they couldn’t afford? The banks, which should have never lent money to people who clearly couldn’t pay it back to begin with, continuously exploiting the hope of families like mine, and quick to exploit us further once that hope disappeared? Or was it my fault for not having the foresight to realize it was a mistake to spend roughly $200,000 on a school where, in order to get my degree, I kept a journal about reading Virginia Woolf? (Sample passage, which assuredly blew my mind at the time: “We are interested in facts because we are interested in myth. We are interested in myth insofar as myth constructs facts.”) The problem, I think, runs deeper than blame. The foundational myth of an entire generation of Americans was the false promise that education was priceless—that its value was above or beyond its cost. College was not a right or a privilege but an inevitability on the way to a meaningful adulthood. What an irony that the decisions I made about college when I was seventeen have derailed such a goal.

I was thinking as a read it, “Well, your problem is you spent $200,000 for literature degrees. Duh!” But then Miller writes about going to a social event organized by a student loan company for debtors (weird, eh?), and meeting others who were struggling as he is:

Despite the name tags, the dinner turned out to resemble something more like an AA meeting, an earnest session of group therapy. Everyone had their story about the problems caused by their student loans and how they were trying, one day at a time, to improve things, and no story was exceptional, including my own. Ian, an employee for Google who had recently successfully paid off his debt from a Columbia MBA program, became something like my sponsor for the evening. He said he had a few “bone dry” years, where he lived on Instant Noodles. I told him I had a long way to go. “At least you’re doing something about it,” he said, sincerely.

We sat down to dinner. Across from me was Mira, a defense attorney from Brooklyn, who attended law school at Stanford. Her payments amount to $2,300 a month, more than double my own. When I asked her why she came to this event, she glanced at me as if the answer should have been obvious: she went to law school at Stanford and her payments are $2,300 a month. The table, myself included, looked on her with an odd reverence. She wore a business suit and had her hair pulled back, but I saw her as something like the sage and weathered biker of the group, holding her twenty-year chip, talking in her wisdom about accepting the things you cannot change.

Two Ivy League graduates with “useful” degrees — business and law — and they’re crushed by debt that they can’t pay back.

Read the whole thing. 

The central point of the essay makes sense to me, because I grew up with it too: college is the magic credential, the gateway to financial security. Truth is, in most cases, if you don’t go to college, your options are limited. The mistake is believing that no sacrifice is too great for a college degree.

As I’ve said here before, I was very lucky in that my father, a Depression baby, was adamant that he was not going to let me take out loans to pay for an undergraduate education. I had a full scholarship to LSU. Yes, my high school friends were going to the Ivies or other prestigious schools. Good for them, said my dad: you’re going to LSU.

I thought he was History’s Greatest Monster — a reputation he renewed when he wisely told me that he wasn’t going to let me go to Belgium for a junior year abroad, because he knew I’d spend it in the pub, and lose my scholarship; he was right about that too, the SOB. Man, what a gift that old man gave me by being such a hard-ass about no debt. He didn’t care what other people said, he was sticking to his guns. This took a basic orneriness that most of us don’t have. I can remember a lot of us in my generation thought that if we got into a great college, then whatever we have to pay to get a degree from it is worthwhile. We never questioned why. We believed the myth.

This can’t go on. What an expensive education, in every sense of the word!

UPDATE: Reader Joseph C.:

Sorry for how long this is. The TL:DR – Professional, employed Christian millennial man and his wife are struggling with student loan debt, leaving them less options than their parents had and postponing many life moments like having kids.

My wife and I went to a Christian liberal arts college for undergrad and we both have our masters degrees in what one could call “useful” jobs: Graphic Design (me, for a Christian company) and Education (my wife, for a charter school).

I was a part of the generation in the late 90s who were told to not worry about college debt and just take out the loans. Luckily, later on when I worked for a military research consulting firm, we were able to pay for half of my wife’s graduate school tuition out of pocket (she worked for a private school at the time who only reimbursed 300 dollars a semester for continuing education); however, once the Freedom Caucus took over in 2010, many of our research grants dried up and I was downsized, leading to us needing to take out loans.

Currently our monthly student loan payments are the second highest bill we pay after our mortgage. Food is our fourth largest bill. Our third is our medical bills (but we can HSA for that). We haven’t defaulted in the last 13 years and have tried many ways to reduce the debt, but it is still crushing. And my wife can’t find full time teaching work at a good school. We live in the midwest and all she can get is an hourly part-time job at a charter school, which she still makes more money at than some of our friends who are full time at Christian elementary schools.

We have very little credit card debt (only one in our household) and do our best to live within our means (the credit card is there to help with unexpected car bills, etc).

I have taught as an adjunct professor at my alma mater to make some ends meet, but I see how much MY students have to pay now over what I did. These kids are getting out of school with debt almost as much as owning a home. It is no surprise to me why they move back in with their parents while they have the weight of a college mortgage on their backs. Also no surprise why they will wait longer to get married and even longer to have kids (we weren’t financially stable enough to start having kids until our early 30s despite being married for 8 years).

The economy may be good for some Boomers, they may even remember a time when in-state college tuition was manageable, but for the vast majority of younger Americans with college degrees, it isn’t. My wife would love to be a stay at home mom, but the weight of our debt makes it a necessity for her to work.

We have a plan to pay down the debt aggressively, but it means me getting a second job for the next 10 years. If you want to be a middle-class, college-taught, 30 something homeowner and parent, this is the reality. Working harder and longer than our parents to just break even (and if you had to take out some private Navient [used to be Sallie Mae] loans, good luck paying those down at all since they can neatly adjust the interest rates to keep you on forever and making overpayments very difficult to go toward principle).

My wife and I have a plan in place for our son if he wants to attend college: He can move back in as soon as he graduates on the condition that he spends what would be rent money on aggressively paying down his inevitable loans. Because right now we can’t save for HIS college while we are still trying to pay off OUR college.

Thank you for bringing this up. I hope more people in the Gen-X and Boomer generations can appreciate that the stereotype of the lazy, entitled millennial is more fiction than fact. Most of my friends who have kids have some sort of side income, they need to and are very hardworking.

Also, one of the small concessions to us who struggled with student loan debt was the ability to write off the interest we paid on our taxes. Thanks to the new tax law, that goes away.

I guess the answer is: Millennials work even harder. Take on as many additional jobs as you can. A college degree doesn’t pay all the bills and a masters degree (as my wife is finding out from losing out on many interviews to fresh-from-undergrad, cheaper teachers) can be a huge liability.

What a bill of goods we were sold, huh? Had I known this was to be my future, I would’ve gone to college part-time, worked full time and paid my tuition in cash. But I was 18. I had no idea, and every adult around me told me not to worry about it.

… and every adult around me told me not to worry about it. I know that’s true. That’s a familiar story.

UPDATE.2: Reader DennisW:

[Having gotten to the end of this below, I apologize for it being quite long. But in some way it felt good to write it, as it did reading Rod’s original post – I know I am not alone anyway, though it feels like it most times – so I’ll leave it as is.]

I understand exactly where he is coming from. Taking on student loan debt for law school was the worst decision of my life – it is, 18 years later, still crushing me, and may very well end up killing me – and has deprived me of any sense of hope for years, as one thing after another fails to pan out job-wise, and interest keeps compounding upon interest (the vast majority of my loan balance now is usurious capitalized interest. In 2012 I had to file a Chapter 13, mainly to stop them harassing my co-signer parents. I was wrongly told by my attorney that the Chapter 13 tolled the interest during the 5 years, and that my balance would be significantly less after. Instead I found out late last year when the Chapter 13 ended that in fact interest continued to accumulate during the time I was on the court payment plan, that that my balance is now $248,000 – some $75,000 more than when the Chapter 13 started despite 5 years of payments), with no reasonably conceivable way of escape or hope of ever paying it off (my current pay-off date is projected to be around 2050 – when I’ll be 76). It was easy at the time to just sign the forms and assume somehow it would all work out and not really think about the burden you were taking on by shackling yourself to a mountain of debt before you really even get started in life. I have a niece who is now a sophomore in high school, and my one bit of advice to her and anyone her age, would be to never take on student loan debt, even if it means going to community college or something instead for a while. No school is worth the potential for decades of crushing debt burden.

Like many in the late 90s, I went to law school with still only a vague idea of what I really wanted to do with my life – mainly interested in wanting to just go back to school to put off the “real world” of work for a while longer. I never really had a great desire to practice law, and having spent time abroad in college, had hoped to get into the foreign service after law school (this was pre-9/11 when working abroad in various embassies struck me as exciting rather than making yourself a sitting duck for the next bomber).

Anyway, I passed the foreign service exam, but ultimately didn’t get hired. Depressed and in a funk, mostly floundering around, I did some temporary doc reviews gigs for a while in DC, tried to make contacts through alumni groups, etc., read every “alternative careers for JDs book I could find – “you can do anything with a law degree”; “the JD is the new MBA” were mantras repeated ad nauseam in those days. Though most of these “alternative careers” were wildly unrealistic without already established means or connections). Despite having gone to good schools (ND & Tulane Law) I got few interviews or interest in my resume (mostly courtesy meetings from alumni of the “good luck, we don’t have anything here, but we’ll keep you in mind…etc.” type).

Ultimately I moved back home took the bar in my home state, yet still (by now a couple years out of school and mostly having done temp doc review work and never having worked at a firm – rather than do the summer clerk thing during school, I spent my summer at study abroad programs in Paris and Prague), had trouble generating interest in my resume or getting may interviews for entry-level associate jobs (having been out of state for most of the past 7 years, and not having gone to law school in my hometown or state, I didn’t have those local school connections to fall back on either, and had no connections at firms through family, etc.). Anyway, ultimately ended up trying to “put up my own shingle” and go solo. Became the contract attorney for a company working with their clients in my state (I don’t want to go into a whole lot of detail). Ultimately, however, I didn’t have the resources to really set up properly, and was dependent on that company and a couple local financial advisors to feed me clients. When that company’s business began to decline significantly around the time of the financial crisis of 2008-2010 or so, it really put me in a bind, since I was so dependent on them for most of my client base (and I had been able to work from home and avoid overhead for office etc. Marketing clearly isn’t my skill, and I had little resources anyway for advertising etc, to try to build a new client base).

Ultimately, staying solo became unsustainable. I had to rely on loan deferments to get by (which led to the repeated cycles capitalized interest every time I got a deferment, which led to ultimately led to the chapter 13). In the end that lead also to losing a house and then an apartment (and health insurance, which I’ve not had for years now – thanks to the ironically-named “Affordable Care Act” my premium was set to go from $70/mo to $270/mo, so I had to drop it).

Having been focused in a very narrow area of law with little exposure to other areas with that company I had been getting most of my business from, I am finding it near impossible to generate any interest from firms (especially at my age now and without bringing a portfolio of business to them), and am mostly looking outside law now, though finding many options there either (unless I want to go work in a warehouse for Amazon or something. I’ve even tried some 1099 sales jobs – they will “hire” anybody – but in the end I’m just not a “salesman” type). Having little in the way of other work experience except my legal work, it’s been hard to figure out what else I can do here or find options, or generate interest from companies that want a specific kind of experience. Just telling them I’m reasonably smart, have read a lot of books, learn quickly, and have good degrees doesn’t do much for me. Also, having the chapter 13 on my credit has kept me form getting more than one job I appeared to have had locked-down before they background check; in my state, unlike some, it is legal for employers to refuse to hire based on a personal bankruptcy on your record, even if the job doesn’t entail access to or responsibility for company money, since they can deem you an “embezzlement risk” or assume bankruptcy filing indicates lack of good character or judgment in general). Soul-crushing drudgery in some meaningless job for little pay in some warehouse or cubicle seems the only option left (yet I’m repeatedly told “the Trump economy’s booming, someone with your education and background should be bale to find something great in no time. Right.)

In sum, things are worse now than ever (I was better off financially before I went to law school), and my financial situation is once again coming to a head – having made a few regular payments on my revived loans after the chapter 13 ended last year – and with nothing working out on the job front (though still licensed as an attorney, my client base has dried up, with that company having effectively folded their operations here). I am now approaching default again, with the only option probably being another chapter 13, and apparently endless cycle I feel stuck in now that will hound and haunt me and crush me to the end of my days (and will in all likelihood shorten them).

Over the years since my law school and college
days also, my interests in life in general focus have changed quite a bit, yet I don’t know where to turn to find something that will be not only spiritually and intellectually fulfilling and life-enhancing but also give me even the slightest ability to really live free from such crushing financial burden (my debt burden being such that even if I found a reasonably well-paying job tomorrow, I’d find it hard to have enough left-over after debt service and back taxes to be able to get even a reasonable apartment, replace a dying 12 year-old car, etc.).

I envy those people Rod writes about in those BenOp communities who seem so grounded, and spiritually and morally fulfilled in a life of meaning, without crushing debt burdens and sense of the utter hopelessness and futility of even trying anything anymore because nothing short of winning the lottery will relieve a soul-and-life-crushing weight on your back. I actually don’t want much anymore, I’ve long sine given-up any real expectations for much out of this life – I don’t need a McMansion or Bentley – I just want to be left alone mostly, to life simply, and escape from the drudgery and ugliness of modern life (over the years I’ve come more and more to find most of modern life and the general culture – political, social, economic, etc – of this country intolerable and nauseating. I find little around me that I want to be a part of at all).
I dream of running off to a hermitage somewhere and just being alone with my favorite books and music and films, cultivating my own little garden, at peace with the world. But gone are the days when, Dostoevsky-like, one could simply take a train across a border and leave creditors and the long arm of the state behind in exile. Nowadays there is no escape, they will hunt you down anywhere (and harass you 10 times a day with phone calls, as if expecting you to have miraculously come into money since the last call an hour ago), and your life will be an utter hopeless misery that will make the peace of the grave seem a blissful alternative to life in this world.

Suicide as preferable to laboring under the crushing burden of debt. The author of the original essay has toyed with the same temptation.



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