You know, when I posted this article, I didn't expect it to generate 20 plus pages of comments, much of it vitriolic, and then devolve into a discussion of credit card debt avoidance and bankruptcy tips.
The point of posting the article was threefold.
1. To point out how an individual could rack up $160,000 of school debt in a profession that would never allow them to pay it off.
2. To illustrate the special status of school debt - how difficult it is to bankrupt out of, that it can be eventually recovered out of one's social security payments (!) - creating a situation where
people feel the need to flee the country .
3. To raise awareness of WHY the cost of education can rise above the economic benefit thereof.
I don't disagree that the music teacher accumulating so much debt for what is known to be a low paying field was ill-informed, but there should be some responsibility on the school and lender's side not to place the student in penury.
Its a well known fact that the rising cost of education has exceeded inflation. Why? Same reason as the runup in homes - subsidized loans which are 'government guaranteed' resulting in wildly reduced risk in lending. Since money is freely available for school in loans, what's to prevent the school from increasing its tuition - it can always be covered. That way, you don't need to tap into your endowment. See:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=120399&highlight=student+loan
Once upon a time, you would invest 'in yourself' with an education and profit from it. Then, a while ago, it turned into more of a situation where you were purchasing the credentials for a job; i.e. purchasing an income. But now if the jobs go away, and you can't repay your debt, what benefit is it to incur that debt?
Its one thing to go to Juliard in the hopes it will make you a great musician. Perhaps you are star struck and will pay anything for fame or a chance at it. That's perhaps even a reasonable economic transaction - chance at fame for money, etc... . However, there are plenty of folks who are taken in by 'schools' to train you as a medical technologist, transcriptionist, sound engineer, etc... those training programs get paid through student loan money and their graduates come through only to find the same miserable job prospects for themselves as when they went in, but now have the student loan debt. That's a scam anyway you call it, and more insidious than the above example.
People aren't so exceedingly stupid forever and this will eventually result in an alteration of behaviour. Unfortunately, some folks will be hurt. But it is not their 'stupidity', it is simply 'inexperience'. You are asking a 17 year old to make life long decisions and I doubt anyone has sat that kid down to explain to them what they may mean.
I have intimate knowledge of student loans and have paid off an amount equal to an upper middle class home mortgage in the northeast through them. But I know how difficult it has been for me to accomplish this goal - there has been significant delayed gratification and living well below my means. Its not fun nor easy. And I've been luckier than most. If it was difficult for me to do, how will it be for those who haven't had the good fortune I have had? That's not realistic. And not sustainable.
Carry on.
