Lew Rockwell calls for repudiation of student loans

[libertarian4321]

A big percent do drop out. In fact, out of the bottom 40% of HS graduation classes, 80% of them who go to college will end up NEVER getting a degree yet you never here colleges tell the truth on that fact. The colleges will still tell EVERY HS student to go to college it is such BS.

Bottom 40% of HS graduation classes?

Well, Hell yeah, those dumb asses tend fail in college- they aren't college material.

If you aren't in the top third of your HS class, you probably shouldn't be going to college. If you are below the 50% line, you are most likely going to fail.

However, among people who are "college material"- those in the top 25% or more, the drop out rate is quite low.

Less than 40% of adults has a college degree, so it's pretty unlikely someone at the bottom of his HS class is going to succeed in college.

 

[libertarian4321]

Sound too good to be true? It is. The people you speak of got a front-loaded deal(aka a scam). IF they ever recoup the losses incurred, it will likely be well into their careers. On top of that, the dollars they earn will be worth less than the dollars they paid for their degrees.(thanks to monetary and degree inflation) If any of these people you speak of is female, her debt burden will make her unmarriable. What a great bargain! /sarcasm

First off, not everyone with a college degree ends up with a huge amount of debt. Many even manage to go to elite schools and end up with little, or no, debt. Those who are academically gifted usually has scholarships that pay for most, or all, of their college education.

And even for those who aren't true scholars, the cost should be significantly below $140k. If you aren't good enough to get a full (or nearly full) scholarship, DON'T GO TO AN EXPENSIVE PRIVATE SCHOOL. Start at a community college (still very cheap), then go to a state school, get whatever scholarships you can, work during the school year and over the summer, and end up with a far more manageable debt load- probably well under $30k.

Some of you folks make it sound like every kid who goes to college ends up with $130k in debt, a degree in women's studies (or something equally useless) and a job at Walmart. I assure you, there are plenty, even today, who graduate with useful degrees, get good jobs, and have very manageable debt (or no debt at all).

 

[LibertyEagle]

I don't get it. The student chose of their own free will to take out a student loan. No one made them do it. They chose to. And now, some are claiming that the debt they willingly took on should be erased? Why? On what basis?

Does that mean that when I make a bad financial decision, that someone should reimburse me for the money I lose?

I don't see how either is libertarian in any way, shape, or form.

With liberty, comes responsibility.

 

[ifthenwouldi]

With liberty, comes responsibility.

Absolutely. And as someone who made it all the way through graduate school while working full-time and raising two kids WITHOUT taking on any debt, I have a right to object to debt repudiation. My grandfather worked HARD at a paper mill for 40 years to help pay for part of my education, so while I feel compassion for those of you who have great debt, it would be immoral to simply "waive" it away.

The best thing you can do is teach your children and grandchildren what my grandfather and father taught me - that almost anything of value takes hard work to obtain.

 

[MRoCkEd]

So now bailouts are good?

But students wouldn't have taken out so many loans if the government wasn't involved.

That's like saying we should support TARP because the banks wouldn't have taken such risks if the government wasn't involved.

Talk about moral hazard...

 

[demolama]

Living frugally can have a lot to do with how much quicker the loans disappear. My wife and I live off one income. Even when we have kids the plan is to remain that way. Once I have my PhD in hand and have a job we still plan on living that way and using the second income to pay off loans and to save. Living this way for well over ten years now makes us appreciate the fact we don't have the "I wants." We don't want/need the expensive Tv's, named brand clothes, the gimmicky Ipads, Smartphones, etc. We don't eat out several times a week. Even living in the state of Maryland, where owning a home is near impossible on one income, we lived frugally. It can be done. It was tough living off 25k a year but we did it.

 

[TNforPaul45]

Yeah i have to disagree with Lew on this, thoughh he is caling for a wipe of the debts and not ambailout specifically.

These students incurred a debt, they must pay it. No one held a gun to them and made them take it out.

Lets fix the bigger aspects of our economic problems instead of focusing on emotional candy and then the students will be prosperous enough to pay their debts and more!

It takes maturity to pay off 24k in student loans instead of buying that new Ford Mustang.

 

[qh4dotcom]

So now bailouts are good?

But students wouldn't have taken out so many loans if the government wasn't involved.

That's like saying we should support TARP because the banks wouldn't have taken such risks if the government wasn't involved.

Talk about moral hazard...

I don't like bailouts but if other kinds of debts can be discharged through bankruptcy so should student loans.

and let's face it, the US government is going to need a bailout for the national debt and unfunded liabilities...no bailout means all the taxpayers are on the hook.

 

[TCE]

I don't get it. The student chose of their own free will to take out a student loan. No one made them do it. They chose to. And now, some are claiming that the debt they willingly took on should be erased? Why? On what basis?

Does that mean that when I make a bad financial decision, that someone should reimburse me for the money I lose?

I don't see how either is libertarian in any way, shape, or form.

With liberty, comes responsibility.

So now bailouts are good?

But students wouldn't have taken out so many loans if the government wasn't involved.

That's like saying we should support TARP because the banks wouldn't have taken such risks if the government wasn't involved.

Talk about moral hazard...

I understand this argument, but completely disagree with it. For 18 years, the government/society brainwashes everyone into thinking they need to go to college. They have to get a degree or else they are worthless. Every teacher, counselor, principal, etc shoves this ideology down their collective throats. The government personally sends materials on how to get loans and then all of this data is released about how people with degrees earn more. Then, because of all this government interference and propping up of the college bubble, virtually all jobs above a certain level require a degree. And you're expecting 18-year olds who have high GPA's to see through all this and not go to college? Not gonna happen. The system needs to start unwinding. It won't, but it would be for the best. This recession has helped revert people away from expensive colleges. At my school, the numbers they have show fewer people registering. If tuition keeps going up and the recession gets worse, people won't be able to go to expensive colleges and the market will take it from there.


In this thread, there has been a ton of rhetoric, some true, most not. Blaming the students for a problem the government caused is the wrong way of looking at this. All things being equal, in a free market, yes, it would be completely on the students, however, in this system of smoke and mirrors, blame can be placed squarely on the government. The only kids at fault are those who go to expensive colleges and take out $50,000 or more in loans and then cry that they're broke. Go to a cheaper school. I can't be mad at the people who go to cheap schools and are $10,000 or less in debt and will be working to pay it off. In a free market, they would have virtually no debt.

 

[specsaregood]

I don't get it. The student chose of their own free will to take out a student loan. No one made them do it. They chose to. And now, some are claiming that the debt they willingly took on should be erased? Why? On what basis?
Does that mean that when I make a bad financial decision, that someone should reimburse me for the money I lose?
I don't see how either is libertarian in any way, shape, or form.
With liberty, comes responsibility.

So you are against all bankruptcy laws? No debt should be able to be discharged?

 

[heavenlyboy34]

First off, not everyone with a college degree ends up with a huge amount of debt. Many even manage to go to elite schools and end up with little, or no, debt. Those who are academically gifted usually has scholarships that pay for most, or all, of their college education.

And even for those who aren't true scholars, the cost should be significantly below $140k. If you aren't good enough to get a full (or nearly full) scholarship, DON'T GO TO AN EXPENSIVE PRIVATE SCHOOL. Start at a community college (still very cheap), then go to a state school, get whatever scholarships you can, work during the school year and over the summer, and end up with a far more manageable debt load- probably well under $30k.

Some of you folks make it sound like every kid who goes to college ends up with $130k in debt, a degree in women's studies (or something equally useless) and a job at Walmart. I assure you, there are plenty, even today, who graduate with useful degrees, get good jobs, and have very manageable debt (or no debt at all).

Good point. That's why I went to community college. I have less debt than most people who went to a regular university.

 

[Rothbardian Girl]

The landscape is much changed today, too. There are more people in college nowadays, so the value of the education has been dumbed down even further, like Lew mentioned in this blog post. So you're paying a lot more for an education that doesn't really teach you anything. Now that there are more people who hold degrees as a result of this dumbed-down curriculum, people are apparently forced to get degrees if they really want to compete in the workforce. The propaganda mills are working on overload like TCE mentioned. There are all kinds of presentations and meetings with counselors, administrators, teachers, etc. in high school that essentially convey it is impossible to get turned down for a fair loan and that everyone will probably get some sort of scholarship to cover their butts. It isn't true. Then we have colleges being deceptive about how much money it actually takes to go to college, and putting you on all sorts of frivolous dining plans and room plans and things like that.

The main problem is that there was a thread of rhetoric started by the government (I think this kind of talk started during the Clinton years, but I'm not totally sure) that said everyone should be able to go to college. There are a ton of people in college who belong in more vocational-type jobs. Here's a personal anecdote: I personally cannot expect to do well in a service job because of my hearing disability. I've tried manning a cash register in my summer of working at a golf course, and it's torture for me. That is part of the reason why I personally feel that I should be in college. I'm sure people who are similarly uncomfortable in conversational situations should be given the benefit of the doubt as well. So, yes, I would blame the government (and the colleges, who probably encouraged this new influx of business) for flooding the colleges and giving out loans and scholarships to the people who don't belong in college, inflating the cost of college for a dumbed-down curriculum that doesn't teach anyone anything important.

Personally, my parents are going to be in for a lot more debt than I am. I'll probably graduate with 40k of loans that I'll have to pay off, and then I plan on helping my parents pay for the rest after that. I can't imagine having to get a predatory private loan, which is what I should have done if I didn't want to compromise my principles, but why should I be forced to pay an extraordinarily high interest rate when I can get a similar loan for a lower interest rate? Again, the nature of government programs is that it limits competition. People here seem to understand that fact, but balk at when they actually see examples of it in real life.

We can also blame the stigmas associated with community college and trade schools for a lot of this, too. I actually wanted to go to community college after I graduated from high school, but my parents thought that I would be getting a subpar education at one. Even the in-state schools in Pennsylvania are getting pretty expensive.

 

[heavenlyboy34]

So you are against all bankruptcy laws? No debt should be able to be discharged?

This^^ Plenty of responsible people wind up in bad situations and wind up deep in debt and have to go bankrupt. Student loans shouldn't be treated differently just because the student loan industry has good lobbyists.

 

[A Son of Liberty]

Post-911 GI Bill folks, get it.

Yeah, we get it. Everyone else has loans that they can't pay back that will eventually get passed along to the taxpayer. You just skipped the first step.

 

[heavenlyboy34]

I don't get it. The student chose of their own free will to take out a student loan. No one made them do it. They chose to. And now, some are claiming that the debt they willingly took on should be erased? Why? On what basis?

Does that mean that when I make a bad financial decision, that someone should reimburse me for the money I lose?

I don't see how either is libertarian in any way, shape, or form.

With liberty, comes responsibility.

Is it responsible for lenders to give out bad (uncollateralized) loans to people they don't know will be able to pay back? In any other industry, this is called predatory lending. (don't forget, the loan industry lobbied for the clause in bankruptcy law that makes it impossible to discharge student debt in bankruptcy) Is it responsible for universities to accept students who clearly aren't college material just because they can get government-backed loans? I think not. Also, don't forget that government dictates on employers "discrimination" forces employers to require degrees when in a rational, unmanipulated market employers could simply administer some sort of intelligence/aptitude test.

 

[RabbitMan]

I went to college on a scholarship and so didn't have to incur student loans, but A LOT OF MY FRIENDS DID. I can vouch that roughly half of them moved on to real careers, and half of them weren't able to do anything with it other than get a job at Target or Blockbuster. Several of those ended up then joining the military out of frustration, as I intend to in the next 5 months.

Make no mistake, student loans are a SCAM, and for those who went to college at least pre-2008, we were told all of our lives, whether in school, at the library, on TV, in the media, that going to a (State) College is just "what you do" after high school. And then you get a decent job that can help pay back student loans while living frugally, and then after a few years you move up in your chosen career and are debt free. It doesn't matter that you incurred $30k[my 2nd tier state university] or $140k[Columbia University] of debt. That's just how the system 'works'. These days it is nearly impossible to work and pay your own way through anything probably above a 2nd tier university or a tech school, unless you have a stable income in the first place, give up the majority of your free time, and spend almost twice as long going to school.

My girlfriend got student loans to get her Masters in Public Administration in 2006. Working part-time, she finished in 2010. She is now $40k in debt and unable to find a job to pay it back because there just aren't any since late 2009-10, when the government cuts became real. She can not declare bankruptcy to get it forgiven, and the loan is non-negotiable, all because of the Fed. Government Student Loan take over. NON-NEGOTIABLE. NON-ERASABLE. Her student loan interest rate is twice that of the loan on her car.

I feel for all those who have either had to work hard or were fortunate enough to not incur debt for their education. The idea of their bad choices being instantly forgiven sounds awful. But there is no need to be hateful or act as if they are COMPLETELY responsible for their situation. Like Ron Paul said in the last debate, don't blame the victim.

 

[heavenlyboy34]

edit: dupe post

 

[goldencane]

Wow a lot of people here seem to be libertarians except for when it does not personally benefit them. No one is forced into student loans, they are all voluntary contracts. As bad as the banks are, that does not mean it is ok for the government to force them to get rid of all those voluntary contracts. Anyone calling for the government to get rid of all student debt needs to join Obama or Romney or the like, you guys are a disgrace to all libertarians, ancaps, constitutionalist, etc.

 

[LibertasPraesidium]

Im only around 30k in debt because of college, and I would never ask to be forgiven of that debt. I went into it, naively or not, knowing that I would have to pay for it after I get out of college.

I would not be supporting Ron Paul if I wanted forgiveness. Anyone that went to school and received student loans is screwed, there arent that many jobs, and that was never part of the deal anyway.

Though there was an entire culture dedicated to telling many of us that the only way was through college, So I will take responsibility for taking the loans, and force others to take their responsibility in placing the incentives there, and telling people it's the only way to make a livable income in the later years of life.

That is something I've known about the whole time, and I don't care, but if they want their associates degree they can have it. (wait, I STILL DONT have one.)

 

[Gumba of Liberty]

Wow a lot of people here seem to be libertarians except for when it does not personally benefit them. No one is forced into student loans, they are all voluntary contracts. As bad as the banks are, that does not mean it is ok for the government to force them to get rid of all those voluntary contracts. Anyone calling for the government to get rid of all student debt needs to join Obama or Romney or the like, you guys are a disgrace to all libertarians, ancaps, constitutionalist, etc.

Those who understand the situation are calling for bankruptcy protection not a bailout. Should all others debts incurred by the population stick around with them their entire lives? Why should only student loans, loans taken out by high school students, brainwashed by public schooling (the government) and their well-meaning parents, be the only ones unable to repudiate debts that the cannot pay? These poor souls have no hope for work and once they find work the bankers will garnish their wages, tax returns, and eventually social security checks. They are an over educated (while sometimes badly educated) group looking forward to a future of permanent poverty. They are an official underclass of society that will either perish under their burden or rise up with calls for Revolution (OWS).