Student Loan Horror

Wow. What a totally broken system. You’ve got to read to the end to get the full sense of the horror.

For those of you with children, how are you thinking about college in the future? Is it part of the plan at all?How are you going to pay for it?

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What an incredible ending paragraph. Every time I read stories like this I’m thankful for my parents who insisted that if I attended college, I should take on zero debt to do so. Otherwise, it’s not worth it.

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You can see how our economic system is not set up for the benefit of the average Joe. Until very recently he was almost universally advised as a matter of life wisdom to go (or send his child) to college so he could “get a good job”, and that it was okay to borrow a lot because he could more than pay it off with the higher salary he could get. And that was largely true for prior generations. But things changed along the way, such as the rise in college tuition, the decline of middle-class salaries, and making student loans non-dischargeable in bankruptcy. Unfortunately, quite a few average Joes weren’t informed about the change of situation.

Being in the biz myself, I was aware of the changing situation back in the early 2000s, and resolved to advise my children to be open to other options besides college, and if they did decide to go to college (which is necessary for many occupations), to take on as little student debt as possible. I also decided not to burden myself with trying to save money for their college expenses since I didn’t see how that was feasible for as many children as I wanted. Besides, the big push to have parents start a college fund for their newborn and save lots of money every year struck me as a bit of a scam – why not address the root causes of rising college costs instead of finding ways to extract more money from the average Joe. (The same goes for the cost of housing – rather than address root causes, the preferred solution is help new buyers save more and get bigger loans so they can pay sellers ever increasing prices.)

Besides, around the time of the birth of my first child, I didn’t see how the situation as it was could possibly continue on much longer before breaking down from the internal contradictions of rising costs, declining salaries, and non-dischargeable debt. I figured by the time my firstborn reached college age, the landscape would look very different. Well, I was wrong, and my firstborn is a junior in high school, and the landscape has not changed much, except the trends have become even more extreme. Perhaps COVID will finally prick the bubble, though it seems all sorts of things that I think can’t possibly go on nevertheless continue to do so.

Anyway, my plan for my firstborn and following is two years of cheaper community college followed by transfer to a relatively cheaper public U, unless they can get nearly full-ride scholarships at a private U. This won’t launch them into the elite of society, but it will help them get ahead at less cost and debt.


Oh man, I dunno. Every step of the way sounds like they were foolish to me. I’ve had friends like that. It can sure sound like quite a sob story, but honestly, if they had been wise in taking loans in the first place and then lived on as little as possible and just paid the load rather than moving to Hawaii to try and get out of the loans, maybe they could have actually done it. People that are dumb with money tend to be DUMB with money.

To be able to pay for college, get good grades. Sports scholarships are an average of $6,000. That’s a joke with the cost of college. I recently told a friend to have her son check out a small private Christian college that she never thought they could afford. Turns out he’s likely able to go there cheaper than any of our public universities with the scholarships and grants they offered him. They don’t think he’ll have to pay almost anything.

And teach your kids to work. Hard. And get them making and saving money early enough that they go into college able to pay a decent part themselves. We have 2 sons entering college next fall and are daily interacting with all this, and emailing with admissions, etc. God has been very gracious, and they are both going to be able to afford the school they wanted to go to. But they are expected to pay a pretty penny every year themselves, and they might have to take out a relatively small loan.


As I mentioned at the beginning of my original comment, we have a system in which an ordinary person can dutifully follow what multiple authorities say is wise, run into unexpected trouble, and then get really screwed over.

It used to be the case in the U.S. that in a complex financial arrangement, the burden of risk had to be shouldered by the more sophisticated party – otherwise the sharks come out to prey. And a student loan is a complex financial arrangement, because the ordinary student at the ordinary university cannot be assured that a particular course of study will lead to a sufficiently remunerative career – disinformation abounds – nor that unexpected adverse events will not occur.

For example, let’s say the couple above decided to take out a commerical loan to start a business and worked hard to make it succeed, but the business failed, and they could not repay the money. If the failure was due to foolish business decisions, would we not also say the bank was foolish in not vetting the business plan better before loaning the money? And if the failure was due to unexpected adverse events outside their control (COVID!), wouldn’t we say the best thing to do was pick up the pieces and move on? In either case, that’s what bankruptcy is for, but Congress successively removed that option for student debt (lastly for private loans in 2005).

If student debt were dischargable in bankruptcy, then the lender, who would have much better information and resources than an ordinary person, would be motivated to judge the likelihood of repaying the debt and not force that risk onto the individual. And if the response is that no one would make student loans under such conditions, wouldn’t that then motivate reduction of the cost of college? And if college remained expensive and only children of the rich could attend and thereby got all the “good jobs”, wouldn’t that motivate getting at the root causes of why there are so few “good jobs” for those who don’t go to college.

Instead, we have a torrent of abusive practices. It’s much better to fall into the hands of the IRS than the purveyors of student loans because all the IRS wants is the back taxes plus a little penalty and a little interest, and the IRS will readily work out whatever arrangement that will enable the taxes to be paid. But the student loan purveyor has no desire to actually help people pay off the loan, and in every story I’ve heard about people hopelessly submerged by student debt, it’s due to the exorbitant penalties and interest rates that were tacked on, not the original loan.


Very interesting and helpful thoughts. I obviously don’t know much about this!

I’m coming into this late, but scanning what’s above made me remember an article I read online a few years ago. It listed, as I recall, about ten universities and their specialties in universities outside the USA - most in Europe but a few beyond that. The point of the article was that the cost of a university degree in the places they listed was far less than a comparable education in the USA. Many of these universities had degree programs in English. Obviously, programs in the UK will be in English too.

On a lark, I put a simple query into Duck-duck-go and got this article. More diligent searching could doubtless turn up additional university degree programs that are less expensive than one in the US.

Clearly, this option is not for everyone. Nor is it totally costless. But still . . . it’s worth looking at the possibilities if your kid is sufficiently mature, language equipped, and needs a university imprimatur in order to pursue a specific career.



Is it true that the Affordable Care Act also, while nationalizing the student loans, also provided for income based forgiveness after a period of time? I remember reading about it in the papers after it was passed. It also may not have been the ACA, but another piece of legislation passed at the same time.

The moniker “it’s always about the money.”

Within just a few years after the change, the Department of Education was making $50 billion a year in profit from student loans. Today, the DOE has a portfolio of well over a trillion dollars in loans, and would be roughly the fifth-largest bank in the United States, if it were a bank.


Of course they are making bank. The debtor is slave to the lender.

I’m no Dave Ramsey fanboy, but most of America would do well to at least sit through his classes and get a bit woke to the realities of debt. How do we do that at scale? No idea.

Raising our children to fear God and be content with food and clothing will go a long way to helping them avoid this kind of error and sin. Easier said than done and I’ve still got a long way to go to get it done.


This is a really important point, and underlies much of the ferment in 2021 America. In 1970 America, most of the people who had played by the rules were able to be pretty successful: jobs, houses, families. In 2021 America, you can’t visit a coffee shop without finding people who followed the rules and can’t have any of those things. It’s easy to moralize and scold these people, and maybe something like that is warranted in individual cases of child or pastoral care, but in the aggregate for society, it’s a disaster and we need to come to grips with it.

Notably, in 1970, people following Selective Service rules were sent into a meat grinder in Southeast Asia. That’s not nothing, but it was a bit of a reverse lottery where most folks did pretty well and a few randomly-selected people lost everything. Now we have something closer to a regular lottery, where most people lose their ante and a few folks succeed wildly. Depriving ordinary people of a stake in their own society is a recipe for disaster.

Our perspectives on higher ed are very different, but I came to the same conclusion as you rather later (around 2015, probably). Like you, I’m surprised at how slowly things are changing. The 2008 financial crisis precipitated some changes, but not as many as are needed for the situation to be truly tenable in the long run. If the Covid crisis and the attendant economic turmoil results in state budget crunches, we could start seeing some pretty dramatic changes. Why, for example, does my relatively small state need three entirely different large state universities, with a full complement of bureaucracy for each?

I think it’s important for us to consider alternatives to four-year university degrees for most of our children. Whereas in the 1990s, a reasonably bright high schooler might have considered a four-year degree the default option, I think we should consider the university path the exceptional case, especially for girls.

Most bright boys would be better-served in a 1-2 year trade program followed by a truck with his name painted on the side.

Most bright girls would be better-served in a 1-2 year trade program that provides a low-cost entry into a flexible career that permits wide latitude in part-time work and dropping in and out of the workforce to care for children.


One of the problems with just skipping college nowadays is that college is the new high school. I don’t think it’s about the job or the money, it’s about an education. The problem is, I don’t think many colleges (especially state schools) are providing much of that anymore. But don’t we actually want our kids to have a good education? Especially as Christians? When I look back on where I was at the end of high school, I would really have hated for my formal education to end there. I’ve been a stay at home mom for 20 years and my education has served me so well. I feel like it’s especially easy for people who do have a degree and college education to downplay its importance. I don’t necessarily have answers, although I don’t know anyone in my circle in the last number of years whose kids wanted to go to college who were not able to afford it through any number of means.

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This is the rub: College has never cost more and has never been less educational. They have (with precious few exceptions) turned into madrassas of our elites’ new secular creed. If it’s an education you want, read Dr. Eliot’s Harvard Classics or stream MIT lectures on iTunes U. University in 2021 is about the credential, not the education.

Even granting arguendo that college is a good and not an ill, some number of those means will result in a life of indentured servitude for those who availed themselves of them. Of course I can’t speak to your friends’ circumstances, but “affording college” sometimes winds up meaning six figures in student loans for a worthless degree.


When people say college is the new high school, they usually mean to convey how indispensable it is. The reality though is that it shows the decreasing value in going to college. There are all kinds of educational options that don’t require going to a traditional 4 year college.

There are more options now than maybe ever, especially if your goal is just learning. There are online classes, trade schools, 2 year colleges with a variety of different options for classes. Books (of the non college variety) have never been easier to find or cheaper. Apprenticeships are available.

There are those who say that the only reason to go to college is if there is a specific job you want, getting a specific return on the investment you put in. I think this is too far, but I’m also increasingly convinced there are much cheaper options than college for many people.


Ha, how did I get myself into this? But now that I’m the lone voice arguing for the usefulness of college, I guess I’ll keep going.

I guess I used the wrong phrase saying college is the new high school. What I meant is that kids graduating high school are nowhere near where they ever have been in the past.

I’m just realizing how much each family’s educational options and past experiences is going to cause one to see this differently. Maybe you have a great high school educational opportunity for your kids. And maybe you went to a state school for college and found it a worthless experience. My husband and I went to a small Christian college and I’ve only come to appreciate our experience and the education I got more and more as I’ve talked to others that went to state schools.

So, when I’m talking about the good of college, I’m not speaking about any college in any subject. I would only go to a good state school if the degree wanted is in the hard sciences, and I would only go to one of the few good small colleges that actually is worthwhile for the humanities. I think there are still quite a few small colleges in every state that will fit the bill where it’s not simply liberal brainwashing.

And no, none of my friends’ kids have required 6 figures of student loans. My husband is a financial planner (ELP for Dave Ramsey, actually). We are against loans and he has seen all the horror stories with his job. But in our experience they’re always the most foolish decisions that were made. But we’ve also watched many that decide not to go to college for all the reasons stated just flounder. Hard to know what you want to do with your life at the age of 18, hard to find a spouse without a whole student body to choose from, hard to get the same scholarships when trying to transfer from a community college, and very limiting in future life options available to you.


I’m all about education and self-education. I’m also the mother of 2 boys that are 18 and 19. It’s well and good to talk about the opportunities for self-education available to us today. It’s truly amazing, and I love it. BUT. It’s not the average person much less the average young man that is going to avail himself of these opportunities and actually give himself a good education for life, especially on top of working a job to support himself.


Ok sorry, one more. I just went to the AoM article. I’ve been thinking and reading these things for years and a few years ago would have argued all those points myself. I’m a huge fan of Mike Rowe. I have extensively looked into the work colleges and been obsessed with them my whole life. It turns out there are only 8, I think, and most don’t allow someone that doesn’t live in the area, I.e. Appalachia, and isn’t extremely poor. We tried visiting Berea with our son a couple years ago and that was the case.

I helped my sons start 2 businesses over the course of the last ten years, hoping maybe they would be the entrepreneurial sort. They weren’t. But it helped them learn things—mostly that they aren’t the entrepreneurial sort :laughing: I have a son taking a gap year right now in another country. Working on a language, learning to build alongside a master builder every day as a volunteer and getting a years’ perspective (and conveniently avoiding the worst year of college ever because of Covid.) And I have a son college won’t be a good fit for that I e spent a lot of time thinking about what should come next for him and how to likely get him set up well for a trade.

So I’m not just the college is for everyone spouting type. But I’ve gone from arguing the other side like everyone here to actually watching it with many kids and not thinking it provides nearly the benefits of college. It’s not just a pragmatic money decision as this article talks about it. Sure, it’s cheaper out of the gate to start working and earning money rather than paying for an education. And for a lot of kids, that might be a great option. At the moment I would guess at least 2/6 of my kids that will almost certainly be the case. And 1 of them is too young to have a clue about. But I’ve seen a lot of floundering with kids that didn’t go on to college. I mostly just think every parent should give their kids the benefit of really considering college. My mind was changed when we took our oldest to visit his first college. All of a sudden I remembered the opportunities that college provides, and I saw him get excited, especially from visiting classes. I just think parents should pursue it with the kids it might make sense for and find out whether the money will work or not before throwing it out.


And if a young person is willing to do “distance” education, it might be possible to do so through a good university in the UK for a lower cost than in the US. I suppose one would have to be careful how the British degrees would translate to American equivalents.

Well said.

When I was in high school, the only thing you ever heard from the guidance counselors, and almost all the teachers, was about college. How to prepare for college, how to apply to the colleges you may want to go to. If you watch a TV show or movie with families, they always talk as though the obvious and only option is their kids going to college.

There is a serious imbalance in our culture about how we talk about post high education, and it has a serious negative effect on many young people. Large numbers of people are almost utterly unaware of different options, even different options about how to get a 4 yr degree.

Anytime I hear this sort of attitude, I tend to push back on it, but I’m all for as much education as feasible, because learning will only ever help you in life.


I thought I was beyond seeing college as mandatory. However, as my children have gotten closer to adulthood, I’ve realized I have almost no idea how to help them pursue alternate paths that are effective vocational pursuits and also don’t alienate them from the liberal arts. I am still trying to figure this out as we have a few years.

It’s almost as if the resistance to college education is related to resistance to authority. You could try to teach yourself, but do you have the self discipline to do so without a teacher shepherding you? The answer for most of us is No.

Now that I have stirred the pot I will see myself out.