Vincent Safuto’s Weblog

Notes and observations

Going to college: Smart. Borrowing to pay for it: Possibly risky

One thing I’m not known for is my humility, and I have always been proud of the fact that I went to college and did not borrow a penny to pay for my education.

Granted, I was beyond the traditional age for college education and I was a blue-collar worker, but my degree is just as good as if I had lived in the dorms, got drunk at fraternity events and emerged owing $75,000 for my degree.

I majored in communications, a field not known for generating great salaries at first. I was able to pay as I went by working at the post office and was able to trade a postal job for a job that paid less and still cover my bills, and then some.

Today, students are encouraged to go very deeply into debt for their education. Even back when I went to college, in the late 1980s and early 1990s, there were those mandatory financial aid orientation lectures, where we were told that debt was part of the college experience. In addition to the regular loans, there were “Stafford emergency loans” for when it was Friday and you had a big weekend planned, and were broke. With a few hundred in your pocket, you were ready for fun, and it would be added to your regular loan.

Students who finally graduated found themselves with a crushing debt and I often wonder if there’s anyone out there who has ever paid off a student loan without going through gyrations, or just defaulting. Actually, you can’t default. They can always try to collect. That’s something that’s not mentioned in the brochures, by the way.

I tried to advise people on the dangers of student loan debt, but no one listens to an old man in his 50s who has never snorted cocaine or shot heroin, or defaulted on a debt (yet).

Law school is the biggest scam of all. A New York Times story (Is Law School a Losing Game?, Jan 8, 2011) noted that law schools pack in students like mad because they’re all getting student loans and paying up front. They all think they’re going to be Perry Mason or something, and most will end up working in fast food. The thing is, the law schools know it but many won’t tell their students. They just want that money.

It saddens me when I read about a really smart person who is determined to go to law school no matter what, and the student loan mavens are eager to help. “So what if very few of them will land good-paying jobs?” they figure. Someone has to beat the odds, and it may as well be them.

But often, the result is another indebted student. I’ve even read about students who double down and figure they’re so deep in the hole, they might as well go deeper and go for a master’s degree, and then a doctorate. I can hardly imagine owing more than $250,000, not having a job and knowing that you’ll be paying it off for 30 or 40 years. At least with a house, there’s something tangible out there that you’re paying for.

I just think that colleges need to realize that the working student who goes through the process slower, but comes out without debt, is not a liability but an asset.

Now that the kickbacks to college personnel for selling loans have been exposed, I hope that things have changed, but I doubt it. Marketing the wonders of indebtedness to college students is an effort that continues. Even when I was taking my brief classes to become a teacher, I saw pitches for private student loans featuring photos of smiling people working at careers funded by debt at high interest rates.

Young people have a tendency to sign things without reading them, and the marketers of debt know it. As someone who is not only boring as heck but also someone who has bought things on credit countless times (several cars, four houses, other stuff on credit cards), I know from experience that you must, must, must, must read everything presented to you for signature. It’s a lot of time and effort to do the reading, but it must be done. And when you’re signing for a student loan, you have to know what you’re getting into.

Credit is a tool that can be used for good, but while a tool like a screwdriver can assemble something good and useful, it can also hurt someone grievously, and needs to be used with extreme care.

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October 21, 2011 - Posted by | Education, Life lessons, Living in the modern age | , , , , ,

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