Student loan crisis at its ugliest: I graduated and found out I owe $200,000 – Slate
Every once in a while, when I’m feeling overwhelmed, I watch college commencement ceremonies on YouTube. These rituals remind me how perverse our higher-education system is—and of the empty idealism that colleges and universities sell us: We are here today, donning our ceremonial robes and caps, to recite the traditional vacuous platitudes and wish you well in paying off high-interest student loans for which we are in no way held accountable. Let us now further romanticize our fair institution by singing the alma mater and conveniently forget that tuition has gone up 1,120 percent since 1978. Good luck out there, kids!
I’m a consumer of those vacuous platitudes and a victim of this system. After finishing my master’s degree in 2008, I found out—as in, I didn’t already know—that I had $200,000 in student debt. Some well-paying professions might make this amount manageable, but for a bioethicist like me, it’s been crushing. Many things had to go wrong for this to happen—or right, if you’re a school or a lender. Although the hefty amount I owe is unusual, my experience is not.
From: Student loan crisis at its ugliest: I graduated and found out I owe $200,000. {via Jaybird}
This article confirms many of my priors.Report
Confirms your priors for me too.Report
It confirmed so many priors, I thought it was a Roman Catholic Bishop that had converted all of late great comedian’s family.Report
This person just found out the total they owed? Either they weren’t paying attention when they signed the paperwork or they are an idiot. Either way they choose to take the loan, no one forced it on them.Report
“I was shocked. It turned out that my parents and Conn had had me ink them during my semesterly flurry of document-signing without discussing them with me.”
He just signed. Not an unreasonable position, but frankly, his parents, by his own admission, “But while I was in school, my parents were too stressed and embarrassed to take stock of my loans.”
So he got hosed. No one told him never to sign stuff he didn’t understand either apparently.Report
I don’t see him taking responsibility for educating himself about what he was signing. If he really believes his parents duped him then he should sue them and stop whining or supporting some liberal that tells him that he is a victim and the gov’t should pay for his loans.Report
I stressed that pretty hard to my son, but we also had some unique circumstances that led to him having to fiddle with some legal documentation not long after he turned 18. (He was witness but not party to some shenanigans that ended up in a civil complaint, which meant he got deposed and still might have to testify, and there was stuff to sign).
Since he was 18, we stressed to him not to sign a flipping thing if he didn’t understand it, and that not understanding legalese was called “Not being a lawyer” and to insist upon anything he was confused upon being explained, because he was an adult which meant if he signed stuff — from legal documents to credit application forms to tax documents — he was liable.
OTOH, my wife works with a program designed to streamline prospective first-gen college kids into college, and they cover — in depth — everything from how to budget dorm expenses and meal plans, to how to study, to how to read and understand financial aid, scholarship applications, etc.
It turns out that, students and parents a like, often get confused between loans, grants, tuition reductions and scholarships versus base tuition costs which means there’s a lot of very patient work by counselors who volunteer to walk them through their particular financial liability, and how to see what it will be if something changes (tuition rises, they lose a reduction in tuition, they lose a scholarship, etc).
Universities are pretty flippin’ good at hiding costs these days, and at least a few students have thought they were getting tuition reductions (“We charge 20k a semester, but you’ll get a 10k a semester rate”) where the reduction was a private loan and not a tuition reduction — and it was because a college recruiter was being weaselly about numbers.Report
How is that not fraud?Report
Because it was explained as loan, but in the “blink and you’ll miss it” way. It’s amazing what you can hide in fine print, or when dealing with 18 year old’s and parents whose college experience was 30 years ago — and when it could be paid for with a part-time job.
It’s not hard at all. You talk about tuition reduction, and federal loans, and how there are other loans to make up the shortfall, and conflate the heck out of all three until they sign. You don’t have to say a single thing that’s factually incorrect, yet results in people being confused in a way that benefits you.
Which was the case, IIRC correctly. There was a very modest tuition reduction. There was a private loan. There were federal loans. All talked about in generalities. “We’ll reduce tuition, and there’s federal loans, and if need be there’s always a small loan that can bridge any gaps” and you sign some paperwork walking away thinking your tuition has been cut in half and you might be borrowing a thousand or two over your subsidized loans. When your tuition was cut perhaps 5%, and you’re borrowing an awful lot more.
Imagine the worst of used car sales tactics applied to 18 year olds. Not every college is like that, but it’s starting to get surprisingly common. Some of the newer law schools are apparently getting pretty ugly, for instance, fudging all kinds of numbers — that’s not even getting into the now common push to get students to get credit cards (attached to whatever account the school happily sets up to hold their loans and take their payments out of).Report
Geez, my recruiter was more honest, and paragons of virtue they ain’t.Report
I’m still having trouble with the loans. It’s a loan, the interest rate has to be disclosed and someone has to be told it’s a loan, otherwise it’s fraud. Do people just sign everything put in front of them? I only did that when I bought houses and I knew it was all related to the debt I was incurring. Even then, when my agent got to the IRS release to give my tax documents to the FHA I paused until I was told it wasn’t optional.
And by this time, I’d paid off grad school, which I borrowed via student loads all on my own.Report
@damon
That’s what I remember. Signing financial aid docs involved a disclosure form that spelled out pretty clearly every single penny I was borrowing through the federal program, and every single penny I had to pay back.
Maybe because it’s a private loan from the school, the disclosure rules are more lax?Report
Federal and private loans are, in fact, different. It’s mentioned there’s a private loan, but the disclosure requirements aren’t as stringent.
Just think of all the fun people have with lease-to-own, or financing at sleazy car dealerships. Aimed at 18 year olds.
Not unknown. It’s worse with the for-profits, of course, but a lot of colleges are…hand-waving away…certain aspects.
Like I said, I wasn’t there, but the explanation I got was this first-gen student and her parents were told that between tutition reductions, scholarships available, and federal loans, and “some” private loans that college could be paid for without anything out of pocket. They both walked away thinking “tuition reduction” was the lion’s share of the “not federal loans” part, when it was the other way around.
They weren’t the only ones. How prevalent it is, I couldn’t say — they generally have 50 or 60 kids, minimum, entering their freshman year and I get the impression at least one of them has to be set straight on what the real numbers are. And these are kids that, more often or not, have quite sizable scholarships — plenty have free rides or close to it.
For all I know, it’s only one fairly popular college choice in Texas that’s doing it. Or maybe lots of them are doing it, but most of the students don’t see it because they need little financial aid due to scholarships. I just know it happens.Report
That is pretty shady. UW would do private loans, but they maxed out at $1000 a semester, they were short term (2 years I think), no deferments, and were meant to help cover gaps between what financial aid offered and what you needed. And it was always presented as a loan, not a reduction.
I would be pretty pissed if I found out my Alma Mater was presenting them in such an obtuse way. Enough that I’d make noise about it.Report
It’s…hard to tell, really, whether it’s shady or not. I mean, remember — this is a program for first-gen college students. Which means nobody in their family has been to college.
It’s hard to tell if the confusion is engineered or if, basically, they’re expecting a more experienced audience. For profits? It’s deliberate. They lie about costs, about aid, about graduation rates, about salaries for people who graduate, about job opportunities….
I suspect it’s more the latter for most non-profit colleges. Well, except law schools. I’ve been hearing about some shady stuff in a lot of the newer law schools.
I just know that once or twice a year, it seems someone gets a “Woah, hold up there, this isn’t what you think” moment.Report
So he didn’t find out he’s racked up two hundred grand until after he graduated? That’s some really impressive stupid stuff there, I hope Slate paid him well to write his article.
On the plus side, he does at least level his guns on the Schools as well so there is that. His final closing in which he hopes for a bunch of studen loan forgiveness basically reads as I hope people in my financial position who come after me aren’t able to go to university like I did.Report
“Hi, I want to make life and death decisions on a society-wide basis, but I didn’t read anything very carefully for about 5 years, nor did I care to look a little more thoroughly for missing data that was conspicuous by its absence. Please give me the power of life and death over people, and some more money.”Report
+1Report
I’ll give the author points for at least acknowledging that he should have been paying attention, but honestly he’s passing the buck so hard & often that I’ve lost all sympathy for him.
I mean, did NO ONE, at any point, advise him to be aware of what he was signing. Did this guy manage to get all the way to adulthood with no parent or teacher discussing the need to read loan docs carefully? I learned that from my high school, during a required class, and I went to a podunk, rural, farming community high school in WI (where he apparently grew up).
I’m betting he did get that education, but chose to ignore it so he could go to a private school. He chose the idea of prestige over cost. And his claim about Madison is bunk. Even today, full time undergraduate tuition is $5K/semester, whereas Conn College is a lump sum of $62K/yr. Certainly living expenses at Madison for a year are not a pittance, but since those expenses are dealt with separately, they are more easily controlled for.Report
I’d chalk this up to Slate just Slating, but it’s remarkable the number of these first person accounts that choose the worst voices to make their point. If I want to make the point, I’m picking someone that got swept up by some for-profit institution or even went to state school and racked up a lot of debt in service of an at least quasi-vocational degree that didn’t materialize (either the degree or the vocation).
Those stories have to be out there, right? So why do we so regularly end up bending back to people who felt that they were too good for state school? Either because they don’t care about the point being made, it generates more clicks, those are the ones that write well enough to be published, or the editors don’t actually appreciate how people outside their orbit are going to read it. Not sure which.Report
It’s the Big Sort all the way down.Report
What is written well gets published. Even if it’s under the braid* heading “informational journalism”.
I don’t mind the first person accounts. I mind when Public Relations gets something published under someone else’s byline.
*broad, if you’re not catchin’ me drift. as in the “braid road ta hell”Report
Or because it just so happens that the informal network of people who end up writing for Slate and other magazines is heavily weighted toward, or mainly consists of, members of The Club, including those who do not comprehend the very real value of being “in it” rather than “out of it.” This budding bioethicist, on the basis of this personal complaint about his student loans, in favor of the left-liberal platform plank on the same question, is already adding to the resume that will help qualify him for future promotions, honoraria, publications, etc. – skipping down the golden road, whining all the way – or at least that’s the picture he presents.
For our hardworking OG Jaybird, I’m confident it’s something very different: That we may be inclined to dislike or be suspicious of the writer doesn’t mean that what he has to say is wrong and useless.Report
I agree that part of the problem with these narratives about school debt is so many of them are part of “The Club” that goes to private, eastern universities. I truly can’t wrap my mind around the amount of money this kid took as debt, but I went to a rather affordable public school in California.
The fact that you can borrow just about any amount for education still blows my mind. My family was big on pushing me towards college (less my brothers), but we were always very cost conscious and made my education decisions based on that. But what the fuck do I know; I am not part of The Club.Report
Lots of out-of-work lawyers, I hear. 🙂
You want to know annoying? I have a set of federal student loans at 6.6% (my wife’s Master’s degree) that I can’t consolidate for today’s current rate. Sometime after 2003, the rules on consolidating student loans were changed so that you literally could NOT lower your interest rate.
If you had a bunch of loans at 6 to 7%, you could consolidate them into one loan for convenience — but the rate charged would be such that your interest payments remained identical (some number between 6 and 7%) .
Which is BS of the highest order, if you ask me.
I have no idea what Navient is making 6.6% a year on loans that are backstopped by the federal government. They have no risk, and their overhead ain’t 6.6% a year.Report
The dude actually has done well job wise with his degree. Shame he didn’t pay attention to his debt for those years but that is on him. Gosh knows i paid attention to my student load debt in grad school and i can’t think of anyone i knew who wasn’t aware of it.Report
BREAKING: Loans Must Be Repaid, With Interest, Say Scientists
Larger Loans and/or Higher Interest Rates Result In Greater RepaymentsReport
I dunno… I’m gonna need to see a replication. I’m gonna need y’all to take out loans of various sizes, with various interest rates, and then tell me how much you have to pay back. I’ll randomly assign you your size and interest rates.Report
I believe Wimpy, et al performed years of ground breaking research on the efficacy of borrowing money for a hamburger and he will pay you back on Tuesday.Report
It’s worth noting that this is a huge, huge outlier. Last year, for the 70% of students who graduated with any debt, the average was $35,000.
Also, bioethicists are a scourge upon mankind.Report
For what it’s worth, I see a *TON* of stuff that went wrong in here.
The guy himself spent a few years lying to himself. One of my favorite sentences in the story is this one:
That said, getting past the whole “I made bad decisions that I am paying for now and that isn’t fair” thing, he *WAS* the victim of a swindle. (Now, I’m not saying that he was conned. As Greg points out, he’s doing fairly well now and paying back his sharks on a proper payment plan.) He *WAS* taken advantage of by a system that enabled his self-harm rather than nudging against it. That system is a sick system.
Moreover, I’m fairly sure that he didn’t need the degrees he got in order to do a good job at the job he’s doing now. That is, he could have done it with a bachelor’s. The weird credentialism that we have going on is creating one hell of a feedback system for people to stay in school longer and get even more debt and then graduate with, effectively, a mortgage payment to make every month.
Sure, he was dumb. He *MIGHT* be representative, though. If he is representative… we’ve got a very, very big problem coming down the pike.Report
Ah, Brandon points out that he’s an outlier.
But things are going to get worse on this before they get better.Report
When i read that quote in the original piece my only thought was, this guy has more problems then just student loan debt. His response was just about the worst possible and not what most people would do. He is an avoident type which affected how he dealt with his loans for years.
I doubt he is all that representative. Most people who took out that much in loans did it for far higher paying jobs like being a doc which while not great is hella better.Report
My wife and I both have Master’s. We also both had them paid for before we started classes (she had a Research Assistant position, I had an Academic Staff posting that covered the bulk of my tuition). And that is the thing. All the way through college, we were constantly aware of what we were taking out in loans, & spending, & how, & why. And we weren’t that much older (I started college at 22, my wife at 21).
The guy got conned, not because the school was trying to con him, but because he willingly chose to not do his due diligence.Report
I graduated from a little dinky state school (one of the “commuter” ones). My debt when I graduated was somewhere between $600 and $800. I had it paid off before the summer ended.
Since then, I’ve had boring jobs that gave me on-the-job-training until I got somewhat interesting jobs that have since started hiring me for my listed experience rather than for my listed credentials.
And I consider myself exceptionally fortunate and I’m wondering why that system stopped because it seemed to work really well for a while there.Report
To your point: the grad school I attended had only five paid appointments, which included a tuition waiver, health insurance, and a stipend, all in the PhD program. But each year we took on prolly 8-10 (actually more!, now that I think about it, prolly cloer to 20!) new MA students and maybe another 5 or so non-funded PhDers. All of those folks were paying outa-pocket, usually at outa-state pricing. And that was perpetually baffling to me since the only reason I went to grad school was because I was paid to do so. I’da never paid outa pocket in that field, at that time (or now!), at that school. But lots and lots of kids were apparently quite happy to do so.Report
Did you keep tabs on any of them enough to know whether they did better than the ones who got paid to go there?Report
No, I didn’t. Prolly 2/3 of the funded PhDers ended up getting appointments and a few (off the top of my head I can only recall this happening for two) of the MA kids leveraged that degree into acceptance to funded PhD programs. I think it’d be really hard to get a position – a GOOD one, if you know what I mean – without funding, since it’s one of those little markers of “talent” that academics are so enamored of. That’s true in the field I was in, anyway.Report
I’m of two minds…
On the one hand how do you get through TWO degrees with no idea what you owe?
On the other, I went through my undergrad with no real idea of the costs I was incurring. Now, part of that is because my undergrad was paid for by money my grandmother left before passing. But, still, I got into school and don’t really remember signing anything. And I was 17 until 3 days before freshman year started who I don’t even know what I could have signed.
By the time I started grad school (at 24) and was on my own to pay, I read everything through a dozen times.Report
Well if you weren’t taking out student loans for your undergrad then you wouldn’t sign a fishing thing. Your parents or whoever was managing the money she left you would have been signing the checks/bank drafts but that’s really it. Without student loans it’s not a particularily complex process.Report
I know we applied for financial aid… I’m pretty sure my step dad did a FAFSA on my account.
That leads me to an important question…
Can student loans be taken out on behalf of another person? Like, could my parents have signed me up for loans without my knowledge that I was wholly responsible for? Could I have signed for them at 17?Report
That I don’t know but I presume no, not on your behalf, but if you and your parents together signed them then probably yes.Report
There are little ways to get screwed out of several thousand dollars with these things, but I think I agree with the commenters above mostly. Caveat emptor.
Eventually, someone will decide that private college tuition is overpriced and we’ll start seeing service academies, state schools, and online programs get even more competitive.Report
The comments above have already covered the ridiculousness of this guy’s particular situation, but let’s spend some time thinking about his conclusion. He asks the obvious question of where the money will come from, but there is a better question, however, of just how much grad school an economy needs and what are the opportunity costs of subsidizing more of it. Considering the terrible state of a whole lot of primary and secondary schools in this country, maybe we’d be better off getting on that first.
Also, does more grad school get us more productive workers (or even more fulfilled and/or informed human beings) or is this just an arms race. Shame that garner does not bother to wrestle with any of these questions, of course, I realize that’s not what Slate is about. When you start subsidizing something, one of the perils is that you may end up with a supply of that thing that far outstrips actual demand. As a Danish friend of mine once said in regards to subsidized grad school in her country, “we only need so many cultural anthropologists.”Report
“…does more grad school get us more productive workers…”
This is an excellent question, @j-r , but I think to answer it we really need to look at degrees of areas of concentration independent of one another. “How worth it is grad school?” doesn’t have a single answer.
Speaking from personal experience, I am undoubtedly a much better teacher having attended graduate school. I am a “more productive worker” on account of having gone. I learned things there I did not know and which inform my (much improved) practice. A follow up question would be, “Was grad school the most effective/efficient way to gain that productivity?” That is a harder question to answer because it requires considering counterfactuals. So perhaps we amend that question to, “Was grad school sufficiently effective/efficient?” Now we can haggle over what is “sufficient” but, again, based solely on my personal experience, I can say that grad school was a very effective and efficient approach. I probably could have gained this same knowledge base and skill set through other means, but it would have been much harder and taken much longer.
Now, it is worth noting that I went to a very highly regarded graduate program and that I was highly motivated, finishing in 1.5 years. The degree cost me about $28,000 (back in 2007-2008) after some scholarships and financial aid; I’ve made that money back several times over.
So, I would argue that most graduate education programs do give us more productive workers in a fairly effective and efficient manner.
Compare that to an MBA, which many of my friends who work in that field insist does little more than give you the right credentialing. If that is the case, than it would seem to me that the answer is, “No.” Even if the ROI is positive (because the credentialing allows for higher paying jobs), the question of opportunity costs and productivity remains.
So, yea, let’s ask this question and maybe do what we can to analyze degree by degree or industry by industry which are the ones that are “worth it” to society and which are not.Report
I think I’ve put a finger on something that’s been bugging me. (And this goes all the way back to the guy who got the Master’s Degree in Puppetry.)
The conclusion is never “I should have not had the option of doing what I did.”
The conclusion is always “I should have done what I did but what I did should have been cheaper.”Report
If half the people on Wall Street would’ve got Master’s Degrees in Puppetry instead of MBA’s, we’d be better off as a country.Report
Sure. If only they had become CNAs.
But we’re talking about people (outliers, granted) who got in debt for going to college that was more or less equal to the price of a house when they had the option of going to a much lamer school (compass directional state) for in-state tuition costs and getting a similar (though, perhaps, not identical) degree to the one they got and ended up paying a *LOT* less for it.
And their conclusion is never “I should have gone to compass directional state” but “I should have been able to go to Disney World and stay in the Polynesian Village Resort but it should have cost the same as staying at the Super 8 and going to Boblo Island.”Report
Maybe, but which half?Report
Though they;d have exactly the same amount of respect for their underlings,Report
(And if you want to revisit the heady days of arguing about the guy who got an MFA in the Puppet Arts, you can go here and boggle at how naïve we were way back when.)Report