Social Security Garnished for Unpaid Student Debt
wsj.com
wsj.com
I don't want to force people into a lifetime of poverty because they made one bad financial decision at the age of 19, but I took out loans, too. I also think it's part of the college experience to eat Ramen every night for a three weeks and scrounge for beer money so I might be a bit biased.
The money that I borrowed, that I paid back to my school (as promised) didn't go sit in some fat cat's bank on Wall Street. My school turned around and loaned that money back out to the next round. So it's incredibly selfish I feel for anyone to think they are free from any responsibility to pay back their loans because they were duped at the expense of someone else who now might not get the chance to go at all.
Effectively the people of the state were unwilling to pay for their children and the future of their state and they made the university students pick up the difference. Add to that the fact that many degrees are unemployable because the economy is/was in shambles and you end up with students paying tax multiple times on their education.
I've worked interesting jobs part-time during the school year and full time during breaks and will graduate without a dime of debt. I've met many students with a similar financial background.
I worked through my college education yet still graduated with a modest amount of debt. There were choices I could have made to improve my financial situation, but no amount of penny-pinching would have completely mitigated the debt I would have had to take on, save a rich relative bankrolling me.
Depending on what school you attend, it may be worth taking on lots of debt. Certainly Harvard is worth the extra money.
I went to community college first. In community college I found it was really common for people to be doing both full-time school and full-time work. My present university (BYU) also charges very low tuition - almost as cheap as my community college. I've also done some full-time work with part-time summer classes in order to keep my graduation on schedule.
I work for a web analytics consultancy, which has allowed my hours to be somewhat flexible. I started at about $10/hour which was enough to meet my expenses at the time (because I was going to community college while living at my parents). Within a year I was making about double that, which was perfect as it coincided with graduating from community college and moving 2000 miles to university (meaning I had to cover my living expenses). This is because the particular type of consulting we do is quite specialized - if I only got two or three real hours of work done in a week out of 20 hours worked the company was still massively ahead at the hourly rates we charge. The work (mostly coding) is different enough from my major (Economics) that I maintain interest in both.
My major is also taught by professors who apparently all prefer roughly the same schedule for classes. As a result, semester to semester time shifts in my work schedule are minor. I work in the morning and then do some work in the evening.
I won't say everything has been perfect. I don't spend as much time on homework as I ought to. If I procrastinate, a client's work might pop up in the morning before an assignment is due. So I've had to be much more structured in my classwork and often try to get a good chunk of it done on Saturday afternoons.
It also speaks very highly of you to acknowledge how lucky you are to be in your situation, in addition to the effort you put in.
I spent my first couple years trying to go the no-debt route but quickly realized it would take me 8+ years to graduate.
There are several reasons I see why it isn't so easy for everyone. One of the easier problems to solve, I think, is that people have become convinced that they need to go to college, that if they don't, they're bound to be losers for the rest of their lives. But first of all, that's not true; and secondly, not everyone really wants to go to college, or is really "cut out" for it, anyway. Mike Rowe has been very outspoken about trade school/vocational school/technical school/etc. as an alternative to enrolling in university, and I agree immensely. He likes to point out that there's a huge demand for welders at the moment, to the point that you can make some pretty big bucks, not to mention that every time I take my car to the mechanic, I second-guess my career choices when I receive the bill ;) The point is, there are parts of the country that are in need of skilled workers, but the people who would otherwise have been eligible hires coming out of a trade school are instead coming out of college with degrees in communications or English, or civil engineering[1].
Another thing is that universities, even public ones, have come to operate like your every day corporate business. "Pay us the right amount of money, and you can be an imbecile and still graduate with a degree". Not only does the graduating class then become diluted with degree holders who are otherwise actually unqualified to be holding said degrees, but the actual quality of the education being given is, in my opinion, sub-par. Why? Because it doesn't actually matter what you learn or how well you grok the material, it only matters that your tuition is paid and you show up to class with your clicker.
The last thing I'll touch on (though there's more yet to talk about, really) is the perception that the more expensive your school is, the more prestigious it is, and therefore the better it is. With a few exceptions, this is rarely the case. You can wind up with a degree from South Dakota Northern Blackfoot Central State University and still be a compelling applicant on the job hunt. Another strategy is to take advantage of the notion that familiarity with an institution is a more powerful driver than actual prestige: attend a public university that has a well-known sports team, and get yourself some in-state tuition in the process (and yeah, the in-state tuition is key here, since otherwise schools with well-known sports programs usually have them because they throw lots of money at their sports programs, and you can wind up paying as much to attend UNC as you would to attend Harvard[2]).
All of these things can combine to produce fresh graduates with degrees in Postmodern Studies from Ivy League universities and debt up to their eyeballs because their parents insisted it was important that they go to university after high school.
University education is an investment, not a requirement. More people need to think of it that way and approach the decision thoughtfully and strategically, or else we'll keep winding up with young adults who take on mountains of debt and piss away four or five years of their lives only to remain broke and unemployable after graduation.
[1]: Not meaning to be mean or anything, but I'm sampling from among my own acquaintances some people who earned these degrees but only enrolled in the first place because they felt pressured to do so, and have since struggled to find employment.
[2]: I pulled that comparison out of my ass and have no idea if it's true. The point is that even public institutions can be ridiculously expensive --- if you're paying out-of-state tuition.
Social security is a wealth transfer program, not a retirement saving program. Social Security takes money from the young, and gives it to the old; this is exacerbated by the fact the 'current old' did not 'pay-in' as much as they will be taking out, so they need your money right now.
None of this is directly due to student debt payments, I was trying to explain why the government resists deferring Social Security taxes.
This is just pure, unadulterated evil.
It's a thorny question, in the general case. But fortunately we can rely on the time-honored constraints of common sense and general decency, in cases like these.
For which the factors "Would this force the individual below sustenance level? Are they disabled, or do they have disabled dependents?" are actually pretty easy to assess, and verify.
You took a loan? Good, repay it. You're an adult, you made a decision. Don't expect any help from others.
My sense of decency says that we should probably not allow student loans, since so many people aren't mature enough to understand their impact and calculate the trade-off of taking one.
//EDIT: So, my main argument is against the idea that we should use "common sense and decency" to make these decisions. That's stupid, because the majority of people don't understand economics and have a hard time guessing what the second and third order effects of a "nice" action would be.
My arguments are a red herring. We should throw out the "common sense" of kafkaesq and I. We're both being stupid when we just poll our values to see what our knee-jerk reaction is.
Let's just use a system that has the best outcomes. I'd like the policy that provides the highest outcome of: ("Grows GDP" x "Does not fail it's participants")
I'm a twice degree'd engineer in the workforce for 15 years, and an expectancy to work at least 25 more years.
All loans were paid back with interest. My earnings are generally far higher than those in my region that do not have a degree, and I pay higher income taxes accordingly.
Do you feel that the reward was worth the risk for the Federal government?
Bankruptcy exists for a reason. It was unwise to do away with it for education loans, even though doing so temporarily increased the volume of available education loans.
We need to decide as a society what the point of university is. If our aim is to increase human capital, degrees should be invested in by the government in a way which maximizes that human capital increase. If we argue that university is essential for almost everyone for a republican democracy to work, we should provide or heavily subsidize it rather than using debts.
Right now we allow people to take out massive debts which never disappear only to learn things which the market judges as not increasing their human capital whatsoever. I don't have anything against degrees which don't increase human capital, but they are basically luxuries which the government shouldn't intervene to fund. In the mean time the massive rise in student debt has allowed for a huge inflation in spending by university administrations and massive swelling in tuition.
The meaning of life is to maximize my contribution to some CEO's yacht?
Our declaration of independence states a desire for life, liberty and the pursuit of happiness. It doesn't say anything about maximizing human capital.
The aim of education is to learn something because knowledge usually increases happiness. Insofar as that information costs money and time, most people have decided they want additional future earnings in exchange for gaining that information. Remarkably, historically knowledge has increased happiness both directly (via things like art, satisfying curiosity, etc) and indirectly (through more productive labor). The main difference between 1916 America (when most everybody farmed daily) and 2016 America is human capital. Go look up the Solow Growth model. Income disparity has also increased in that time frame, but that's a problem of how society distributed the new found gains, not the fault of the gains themselves.
If you'd read my comment, I was considering what the country thinks the use of university is. Right now the government's actions don't help people regardless of what you think the object of university is. If they want to help human capital, they should subsidize certain degrees. If they want to have as many people as possible go to college, because going to college has benefits other than increased productivity, they should subsidize (partially or completely) degrees. But the current state of affairs is just silly.
There's lots of international evidence that a better educated populace makes for a better citizenry and thus a better government. That's one reason why the government pays for and mandates primary and secondary schooling in the US (the other is human capital makes our entire society better off). If we think the citizens need more education in order to provide society a benefit, we should pay for it directly rather than create a massive loan bubble which is bound to burst at some point.
I don't think that generj is pushing one direction or the other. We just need to recognize the choice. Are we giving out student loans to grow the economy? Or are we giving out student loans as a way to fund The Arts ? Or some combination? Do we know what our goal even is?
My issue with your line of thinking is that I rarely hear the same outrage towards the government doing massive subsidization of private business at tax payer expense (billions of dollars of bail outs for Wallstreet, tax payer funded research with private profit etc).
The school of thought that individuals must suffer bad investment decisions without legal protection, but an LLC can with normal government help reeks of an injustice.
I have a degree in Biochemistry. After I graduated in 2009 I was unemployed for 7 months while looking for a job--- and when I got my first biotech job, I got fired within two months. I ended up working data-entry, and just feeling like: "wow. This is fucked up. Let's do something else". I took a night class in python and my first software job paid _double_ what my biotech job paid.
People can and should continue to problem solve on their situation. We are not passengers in life, we are active agents!
Forgive me if I don't take that story at face value as evidence that everyone can pull themselves up by the bootstraps by becoming a software developer/engineer.
I also got help from my younger brother, who was graduating with a degree in CS. We had a half dozen skype conversations that helped me get started before the night class started.
The night class was 9 months long, but I got my first job about 2/3 through it. I told my instructor that I was bored as shit at work, and had saved up enough that I could try being an unpaid intern for a month in the hopes that I'd get a real job. My instructor sent out some emails, I had five interviews, and one of them offered me a paying job! So I took it.
You're right that I had a decent background for it, and that my brother helped me. But I also really wanted it, and I was bored to tears at my job, and it kept me motivated.
Everyone can make decisions about their careers and study the trade-offs. And we should encourage that, rather than letting them fall into learned helplessness! Look at this: https://www.reddit.com/r/AskMen/comments/56xkrd/how_to_pick_...
You've had help from 1. your brother, 2. your professor, 3. accumulated savings.
That's quite a combination of factors, the majority of Americans simply do not have the luxury or luck of having (even if by their own inaction or faults).
We just need to make student loans dischargeable through bankruptcy, and all of these problems will be fixed. Lenders will stop lending children hundreds of thousands of dollars to get a European history degree, tuition fees will implode...
I'd be OK with bankruptcy ending student debt after a time frame of 5-7 years.
Otherwise, why not everyone become a neuro-surgeon? A couple hundred thousand dollars wiped away right after collage, only so they can become paid far beyond reasonable wages afterward and owe nothing.
We're so obsessed with stopping cheats in this country we'll cut off our nose to spite our face.
I'll also note that many student's credit ratings are garbage anyways, or they have no credit history to speak of. So the immediate consequences may be limited, and many people don't fully think through future impacts. These kinds of people also tend to be the kind of people who take on a lot of debt for a non-marketable degree.
And lenders will also stop lending children a few tens of thousands of dollars to go to a reasonably priced state school and get an education that's valued by the job market. This can allow them to escape poverty and have comparable equality of opportunity to the children whose parents happen to be wealthy.
Taking away student loans is not fair to those kids.
There are ways to do this, and, at the same time, limit upward price pressures. Also, it does so already, as if you default on your student loans, the lender still gets paid - but the government foots the bill.
Yeah, life sometimes gets that way. The thing is, my common sense suggest that, with about 99.99% probability, you've very significantly benefitted (or will likely benefit from) some significant form of public subsidy yourself, at some point.
I probably have benefited from some public subsidy (Oregon public schools, and the lack of income tax in WA), but I can still argue against the system, can't I? :)
What I was saying was actually the opposite: we need to consider these situations in terms of first principles, and on a case-by-case basis.
Student loans, uniquely, can't be dealt with my bankrupcy.
And of course, if you are rich and starting a business, you can put all your risky loans into a "limited company", which means you can make all the profits, and walk away with no debt if the business goes south.
In the US and much of the developed world, the qualifier is not "if you are rich", but "if you are rich and have a banking loan relationship through a business entity". Open a de novo small business for the first time, and you cannot get a bank loan without a personal guarantee. Factoring and business loan companies won't even approach your company until you've been on DnB for a number of years, and even then, when you get into the application process, you will often find a personal guarantee is still required.
Where businesses commonly rack up unsecured debt is vendor payables. But those are typically very small until you have a proven payment track record with each vendor.
The amount of debt leverage you can access as a generic, new US business entity is much a smaller ratio than you can in real estate loans (which are secured, so no real surprise there).
That's quite something.
Loans involve risk for the lender and the borrower. There is no moral obligation to pay back a loan at any cost.
It's kind of like repossessing someone's fully paid-for car and house to pay an unrelated debt. It's something you already owned and was not collateral for your debt, but they're taking it away from you anyway.
If you're an American, check your pay stubs. You're paying for social security every pay period. It's not welfare, it's a refund of money the government forced you to pay when you were younger. If they're now taking it away from you, taking away a refund of money they already forced you to pay them years ago, that seems to me like a massive misuse of the social security system.
People rely on that for their sole income, secure in the knowledge that they spent their entire lives paying into it.
That's not even close to true; there is no legal connection that requires you "get it all back" or that the government can't arbitrarily adjust benefits up and down.
In practical terms the program is a transfer from present workers to past workers, it doesn't fundamentally operate as a savings account.
If the government can say "we took all this money from you in the past but won't give it back now", there was literally no point in paying social security taxes.
If you look at the study data on retained knowledge and hours studied in the liberal arts, they paint an unflattering view of what a 'liberal arts education' really is today. I am all in favor of people studying philosophy, history, and language, but I'm not sure how much it helps society, and students aren't learning anything anyway.
certainly engineering students are just as free to binge drink and party for 4 years and not learn anything. a fuck up who drops out of their engineering degree program and defaults on their student loans is just as much of a fuck up as someone who did the same while studying literary criticism.
honestly, what are you actually trying to say? it sounds like you're making a blanket accusation, without evidence, against a group of millions of people.
I challenge you to find evidence that learning or studying is on the rise.
[1]http://thefederalist.com/2016/09/11/study-college-students-s...
[2] https://www.aacu.org/publications-research/periodicals/its-a...
what is your position? what do you think the purpose the university is? do you think the behavioral problems you're discussing are causal or correlative?
I'm really just asking you to present a coherent statement of your opinion, whatever it is, because besides your general sense of hostility and derision I can't tell what you really think.
I really don't know why people aren't taking advantage of University as a venue to read, exchange new ideas, and learn. All I know is that we have been increasing subsidies to borrowing, and the outcomes have not been good, so we should probably stop.
my opinion/supposition:
because they are children and behave as children. childhood lasts well into your 20s for a large class of people in the United States.
because our society in general doesn't value reading, exchanging new ideas, and learning so why should the university be an exception? our society is currently entering a period where political/tribal struggle is _trumping_ almost all other concerns. when the social fabric is as frayed and torn as it currently is the university suffers.
because our society has established a strict regime of "credentialism" which has driven home the message that a university degree is a necessary credential for employment that provides a middle class income.
because it is a rational response to this social/economic trend to acquire the credential for the minimum of effort, since many students are only participating because of the need for the credential and they have no inherent love of the subject they're studying.
because those who really do have a love of reading, exchanging new ideas, and learning discover quickly that the university is not a particularly good environment for those activities after all, with all the distractions of careerism, politics, and economic stress that accompanies an academic life. (sidenote: this is why I dropped out of my PhD track in philosophy, and only years later went back to school for computer science)
but that's just my opinion on things, based on my experience in the university. I do allow for the possibility that somewhere, someone is having a better time with it.
my question for you:
you linked a few articles that were advancing the position that the university system should 1) be optimized for job skills training, and 2) should be generally dismantled/defunded as a social institution. do you support that position yourself?
My personal position is that universities should be exclusively focused on academic and non-applied science activities. They should almost entirely be liberal arts, and un-subsidized, probably focusing more on part-time studies and 2-3 year programs than degrees. This would be a model of university education as a venue for personal growth, and I would have liked to attend a university like this.
I would be against subsidizing the technical institutes (which would teach engineering, computer science, etc.), but would understand the reasoning in favor of it.
Counting hours studied is a lot like counting lines of code IMO. I'd personally rather live in a world where people are free to seek any fulfilling end, whatever that is. Painting liberal arts majors as lazy alcoholics isn't constructive to anyone.
The world wouldn't be a very interesting place if we were all engineers.
Ultimately, I think the issue is with insane tuition prices, not with people who want a liberal arts degree.
[1] http://bleedingheartlibertarians.com/2016/04/is-liberal-arts...
More importantly, I think there are a few departments which have a negative impact on our society, namely those which exist solely to perpetuate an ideology at public expense.
edit: similarly, we need more engineers to rebuild basic infrastructure which would benefit society in tangible ways (Flint, Michigan?), but those jobs don't exist either. why?
This is a false dichotomy. There's no need to dignify people in proportion to their economic output (or any other measure of human worth). We can assign dignity equally without pretending everyone contributes equally to society. Further, I think it's materially dangerous to push a bunch of people toward majors they can't afford and which won't support them financially because of some notion of a "social need" that is divorced from any economic reality.
> similarly, we need more engineers to rebuild basic infrastructure which would benefit society in tangible ways (Flint, Michigan?), but those jobs don't exist either. why?
Let me head you off--capitalism isn't perfect, it's just the best economic model humans have discovered to date. More importantly, fixing student loans and social security is a tractable problem; changing our national economic model is not. So let's not waste time debating what won't happen in our lifetimes.
Also, just making the statement that capitalism is the best economic model doesn't make it true. Democratic control of the means of production absolutely makes more sense ethically and socially. I think it is quite possible we will see another big socialist revolution in our lifetime.
> Also, just making the statement that capitalism is the best economic model doesn't make it true.
Feel free to point me to one with a better track record.
> Democratic control of the means of production absolutely makes more sense ethically and socially.
And every time it's attempted, it ends in disaster.
> I think it is quite possible we will see another big socialist revolution in our lifetime.
I hope not. Many places in the world are still recovering from the last one.
Anyway, I'm not interested in debating philosophies here. We have a practical problem at hand; there's no need to make it philosophical.