Gasp! Student Loans Must Be Repaid?

by Ron Haynes


USA Today featured a story in the Money section entitled “Student loans are crushing new grads.” Cry me a river.

As someone who has been paying on MY student loans since 1989, I’m just totally sorry. You took the money. Now you gotta pay it back. In the immortal words of Gomer Pyle, “surprise, surprise, surprise!”

I feel like it’s a real shame that people like me are coming out of college, weighed down by all this debt.” — Austin Light, 24

Hey Austin, I “feel” like it’s a real shame that people invested money in your education with your promise that you’d pay it back … and now you don’t want to because it isn’t convenient to you. I “feel” like it’s a real shame that people pour their life’s savings into banks that lent money to students who still haven’t grown up enough to realize that their signature on those papers means they DO have to give the money back.

Apparently there are quite a few people who “feel” that they’re owed everything, free cars, free college, free housing, free medical care. Here’s a news flash:

NOTHING IS “FREE”

Everything is paid for by someone. The problem is all those “someones” have raised a generation that thinks everything is free or should be. Life is like Friends, no one has to work, everyone has plenty of money, life is just one big laugh.

Guess what? It doesn’t work that way. Welcome to the real world. Now get to work.

Oh, and sorry you cant find that $85,000/year job that starts work at 10, ends at 2 with a company paid 2 hour lunch … 4 days a week.

The article states:

Without such an option (you can’t file bankruptcy on student loans), many college grads are saddled with debt and unable to buy a home or obtain other credit. That can leave them in some cases unable to pursue the careers they studied for because they must take low-paying jobs just to keep up.

Holy Cow. Can’t buy a home just out of college??? Can’t work in your preferred field RIGHT out of college??? What’s this world coming to when college graduates can’t graduate on Friday, throw back a few Yeager Bombs on Saturday, sleep it off on Sunday, start their “dream job” on Monday, and buy their McMansion on Tuesday?

Now they want to be able to legally steal all those thousands of dollars by declaring bankruptcy when times get tough? Have we raised a bunch of wimps or a bunch of thieves?

I’ve been in those exact shoes. Try making $13,947 in one year (pre-tax) with a stay at home wife, two children under 14 months of age, with a $440 rent payment (never late), a $140 car payment (never late), and $20,000 in student loan debt (late but never in default). I wasn’t working in my “dream job” either. But it made a man out of me. Hard times will do that if you let them. I had to put my nose to the grindstone and work like a dog to claw my way up out of that pit. No elevator. No ladder. No government bailout. Nothing but sweat and tears in jobs that taught me the value of hard work.

Another group in the story wonders why there were bailouts of banks but not for college student loans. “It’s not fair,” they whine, “The system is against us.” Oh, grow up. Any government bailout is stupid. Why should the taxpayers have another one foisted on us?

Here’s a radical idea:

Pay your bills. You knew what the payback would be when you signed those papers. Now keep your word.

It’s what mature people do.

About the author

Ron Haynes has written 997 articles on The Wisdom Journal.


The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.


If you enjoyed what you just read and would like to get FREE email updates with the freshest articles from The Wisdom Journal delivered right to your inbox, subscribe today! It's ridiculously easy and you can unsubscribe at any time. Since your email address is never sold or abused, you can subscribe with confidence, PLUS you'll get free reports/guides/eBooks, subscriber only benefits, and other perks.


{ 24 comments }

SavingDiva

I agree with you…these students are just whining! I chose to go to a school that I had a full scholarship, so I wouldn’t have to take any loans. I also shopped around for graduate schools. My tuition is covered and I receive a monthly stipend.

Money Beagle

I agree with this that they need to ensure that they pay them back, but there’s a couple of things I think that could be pointed out in fairness. One is the cost of college has risen disproportionally over the years to inflation. This means that the cost for someone graduating today is a lot higher than it was for someone even 15 years or so ago when I graduated. You can’t blame the grads for being a little bit miffed about that, and I don’t have a problem with them venting a little bit when you consider that the job market for them right now sucks.

That’s the other part that people don’t realize, is that when they sign the loans they realize conceptually that they will have to pay these off, but I wonder if they really know what that means. I mean if you get a loan for say, $5,000 a semester, do you get presented something that says ‘For this loan, your estimated payments assuming a certain interest rate and a certain payback period will be $50 per month’ AND ‘Add this to your total balance and you’re looking at $200 per month so far’. I think colleges and lending institutions are happy to give out the loans, but the students don’t really have a true grasp of what it will mean to them later. Do people in college have an idea of what they might make with their major when they finish? Some do but I bet a lot of people don’t. Do college students have an understanding of what costs to expect when entering the real world? I doubt it.

Again, I’m not giving them a justification for their ‘whining’ but I just saw my sister-in-law go through this, and the college was more than happy to give her the loans, raise costs by 10% a year, yet provide little to no information beyond that. Could she (and others) have taken the initiative to research this beforehand? Absolutely. But I can also see the argument that a little bit more information up front by the institutions offering the loans could go a long way in helping this aspect of education that does not exist at all today.

Admin

Yes, they DO get that information. It just doesn’t register.

Matthew @ LifeOfAnInvestor.com

You seem upset :smile:

Admin

Does it show? Really, I’m just sick and tired of this entitlement mentality that’s been fostered on our society. People forget that the government is US. WE pay those bills. We’re already to the point that less than 50% of the people pay 100% of all taxes. It can’t go on like this forever, with half the population sucking the life out of those of us who produce.

Carla

I agree with Money Beagle, the cost of school isn’t what is was 15 years ago and I couldn’t even afford it then – so I never completed. Working full-time and going to school wasnt even a option for me health wise; now its totally out of the question.

Its a tough choice for a lot of people to have to make, but I can see both sides of the argument too.

Admin

Everything is more expensive. That just isn’t a good enough excuse to seek bankruptcy protection in my mind when you know good and well how much you’re borrowing and how much the payments will be.

I remember a statistics class where my professor asked everyone (600+ students) to fill out an index card with how much they expected to make their FIRST year out of college. He later plotted this information to demonstrate for us how to use collected data to infer ideas.

The numbers were hilarious. This was 1985 and students expected to graduate making an average of $50,500.

That’s the problem — unrealistic expectations, not the cost of education (which is high, I readily admit).

Carla

Hey, I’m not saying that they shouldn’t pay it back. Like I said, I never completed school because I knew it would be too rough to do EVERYTHING (working full-time, school, paying it back, etc).

Admin

And I can certainly respect that! Knowing how to NOT bite off more than you can chew is also the mark of a mature person!

Ann-Marie

Wow, fantastic rant! And I wholeheartedly agree! I still have $17K worth of student loans, but I’ve never complained about it. I wanted to go to graduate school and loans allowed me to do so. It was an investment I made in my future. And I’m happy to pay it back. Would I rather spend that $250/mo. on cool toys and cute shoes? Sure, I would! But in taking my loans, as you point out, I took on a responsibility as an adult to pay back what I owe.

It’s not like student loan lenders are bookies that will break you leg if you miss a payment. There are deferments and forbearances if you’re unable to make the payment right out of school and need to work a crappy paying job to work your way up the ladder. There’s help if you need it, but there’s a difference between help and total loan forgiveness. Get over yourself, it ain’t gonna happen. Think of your loans as an investment in your future and with interest rates where they are, it’s not a bad investment at that.

Do You Dave Ramsey?

Gasp is right. This is nothing more than the continued proliferation of our victim mentality. Now I’m the victim of my own student loan. Give me a break. I am embarrassed for the universities the parents and the stupid graduates that have so clearly failed to teach, educate, and learn what a loan is and means. Heck, no surprise these grads struggle to find work after school when they so clearly have not even the faintest grasp on reality.

As for the cost of school arguement… hmm, sorry I can’t fall for that either. Everything cost more that it used to but then incomes are higher than they used to be too. There is also a wide range of state school and community colleges to help move along the education process at reduced costs. Options are out there for those willing to look and invest energy and effort.

I guess that makes me a hard ass but I can’t help it. I’m a firm believer that we need more personal responsibility rather then less.

Great topic… clearly it fired me up!

Dave

Admin

Agreed. There are lots of options other than those “top tier” schools. When you look at the CEO’s of industry, very few went to those schools; they went to smaller schools, developed networks, worked hard, took risks, and seized opportunities.

The whining, “poor little me” attitude won’t get these grads anywhere in life. Suck it up, flip burgers until your “dream job” opens up, and pay your bills.

Erica Douglass

Hi Ron,

Nice rant ;)

Sooner or later, something will break. Tuition keeps going up at a faster rate than inflation — that can’t last forever.

If you know what you want to do at age 16 or 18 (I did) and think you can make it work, there is little reason for college. Eventually, more people will figure this out.

-Erica

Admin

Yes, the laws of economics will eventually balance out the supply and demand for higher education. If schools continue to raise rates, at some point there will be other options. Affordable options.

But those are already out there! Many online schools offer Bachelor’s degrees for about $15,000 to $25,000 and there are Master’s programs for the same range. None of this $100,000 junk for a BS in Business Admin.

Angela

Your post was right-on, and I am quite tired of the whining of the Millenium generation. Growing up I had no parents, moved nearly 20 times before the age of 17, and became self-supporting as a teenager [and was never on any kind of public aid--I worked!]. My ACT scores & grade point average were high enough to get me into an Ivy League school. Did I go? No. Why? I didn’t want the debt. Instead I went to a Tier 3 school on a full ride, still had to borrow money to live off of and worked between 2-3 jobs the whole 6 years it took for me to get my degree. And I got it with honors. And I was able to get a good job out of college & paid back the loans.

I am eternally grateful for the student loans that were given to me. Those banks didn’t have to invest in a nobody like me, a nobody who had been homeless and who had no future except for the chance at getting an education. I had nothing to give in return, but they still took a chance on me. I don’t believe that student loans are an entitlement; they are a blessing, and they completely changed my life in a way that I could not have dreamed possible.

Admin

Wow, what a great story! Congratulations. Really.

I worked 3 jobs in college and then still didn’t graduate. I had to go back to school 15 years later when it was much more expensive. Just as I paid off the old student loans, I had new ones. Then I went to graduate school and paid for it out of my pocket because my income had gone up enough to pay for it outright.

When people take personal responsibility, the whole world is better off … and so are they.

FB @ FabulouslyBroke.com

THANK YOU.

Finally. Another voice of honest (albeit harsh) reason, like mine.

I never knew other bloggers with strong opinions out there like mine existed. :)

I could not agree more with your post. I feel the same way about people spending when they got into credit card debt, or buying a home they couldn’t afford.. the list goes on.

Everyone thinks the credit card companies for example, are the culprits. But guess what? They didn’t force you to buy all those things on credit. They just gave you the means to do it, but they didn’t push you over the edge to go out and spend it. You signed your name on the contract & those slips, you’re responsible for it.

Case in point: I’ve never paid a penny in credit card interest in my life.

And as for student loans, I agree that the costs are astronomical and a bit crazy compared to what they charged before. I paid $20k/year for tuition alone that only cost $3k about 8 years ago (my sibling and I went to the same school 8 years apart).

I knew what I was getting into. $60k of debt when I graduated. And I was luckier than most, paying it off in 18 months, and landing RIGHT into the field I was best suited for, and working for myself now. (Actually, more like relaxing for the rest of the year without working at all until an interesting contract appears).

But I knew the risk I was taking, graduating with $60k in debt and then having to find a job with it. However, I made sure to pick a degree (after switching out of a useless one) that had a general all around value for a job (business), and I went into an industry that has really been growing in the past decade or so (IT), and married the two.

For students graduating from fashion or music, and expecting to be a top designer or in the Philharmonic Orchestra when they graduate, they’re in for a rude awakening. Hobbies are not jobs. I’d love to be a clothing designer but it’s not practical, so I squelched that idea early on.

That’s not to say to get a degree JUST to earn money, but being a little practical and realistic helps. Anyone can be the manager of GAP, you don’t need a college degree for that.

Anyway, sorry for the long post. Got a little over zealous there.

FB @ FabulouslyBroke.com

FB @ FabulouslyBroke.com

And I love your blog. Instant love. Am adding you to my RSS Reader and will be a frequent commenter. I can feel it.

Curmudgeon

Ron, while I agree with your sentiment of personal responsibility completely, I’ll have to disagree that our higher education system is subject to the same economic forces as any business. They use pricing not to pay the bills, but to attract the type of student they target. They kick back (“financial aid package” – grants and loans) if prices are too high for the class they actually accept. And collectively they lobby both governments and parents on the right of every American to a higher education no matter what the cost. It is a nefarious establishment, and one that no one seems to be willing to seriously challenge.

Second, if you find anyone who works in the field that they studied in college, I would be surprised. I can accept that you have an interest or curiosity in an area sufficient to achieve a college major in that area, but that bears little or no relationship to what you do to earn a living afterwards. Have we so seriously deluded our youth into believing that they can pursue what they are interested in, and it will provide them with a financially secure and comfortable life?

Admin

For a minute there, I couldn’t tell if you were talking about health care or education …

While there are some differences between higher education and other businesses, it is subject to supply and demand pressure. If it wasn’t, colleges could charge $100,000 per hour and enrollment wouldn’t suffer. Other businesses write off loses all the time – can we call them scholarships? Other businesses “kick back” plenty – it just isn’t so obvious, whether in the form of comps, or trips for their good customers, or special discounts to attract their preferred customer. Can you find an industry that doesn’t have a lobbyist? Every industry from avocado growers to zebra farmers has a lobby. The education lobby has some powerful lobbyists though and they definitely have the attention of lawmakers, I’ll cede that point for sure.

Having lobbyists and the favor of politicians doesn’t exempt higher ed from the laws of economics, though it does skew the situation. One reason costs continue to rise is that people are willing to pay them, governments are willing to allow “state” schools to raise them, and we continually hear how much more a degree-ed person makes in his/her lifetime.

Much of the demand is based on perceived value. Ivy League schools supposedly teach something magical that second or third tier schools don’t know. Wait a minute, that’s just marketing, much like every other business uses marketing to drive up its price structure. My strategic management professor in grad school taught everything Michael Porter teaches!

About the only degree that I can think of that the grads usually do work is accounting!

Curmudgeon

Excellent arguments, Ron. I can only say that as a former tenure-track college professor, I have experienced no desire or understanding for cost control, and have seen tuition prices manipulated to provide a perception (not a reality) of value or elitism. I have seen faculty rail against even the implication that they are a busines with customers (“We don’t have customers! We have students!”). Or that there is no requirement to change with the times (“Online education is a failure; we perfected education with the in-class model, and no further changes are needed.”). Yes, those are direct quotes that I heard from administrators or senior faculty during my time teaching.

I think those are the types of attitudes that have so disconnected our system of higher education from the economic reality the last 30 years.

Admin

Don’t you think that ALL prices are manipulated based on perceived value?

And believe me, private business has its share of anti-technology folks. Check out David Green of Hobby Lobby ($2 billion in revenue) who refuses to allow scanners in his stores because “manager’s will spend their time looking at a monitor rather than on the sales floor.”

In my own company, there are those who think we don’t need to change an thing … ever.

Still, I bet you could trump all these stories with some from your faculty meetings! Higher Ed certainly does have some dinosaurs.

Jessica

I LOVE this article for this line:

What’s this world coming to when college graduates can’t graduate on Friday, throw back a few Yeager Bombs on Saturday, sleep it off on Sunday, start their “dream job” on Monday, and buy their McMansion on Tuesday?

Priceless!

Just what I needed to get my daily dose of snark. :D

Diesel

I wholeheartedly agree with your post – Thank You! I went to school on college loans and grants and albeit, I didn’t finish but I am paying back my loans. Now that I see the Milleniums going to school thinking mommy and daddy should take out the loans, it’s their job and racking up credit cards that they don’t even pay (still mommy and daddy), I wonder if it is the parents that are engendering this needy entitlement behavior or if this generation is living in the clouds. I’m paying back my student loans and never turned to my parents for a single thing in college. This new generation needs a serious reality check or our society is in for trouble.

Previous post:

Next post: