Your Student Loans are Your Problem

Your student loans are your problem.  Not inflicted on you by some nebulous ‘patriarchy,’ ‘system,’ or other make-believe oppression.  You wanted to go to university or college.  You wanted to learn something.  You signed on the dotted line.

Let’s say that again: You signed on the dotted line.

What did you sign?  Well, you willingly said you would be happy to borrow money from someone (the taxpayer, the bank, a lender, uncle Bob) to fund your education, and committed to paying it back.

Let’s review that last part again: Committed to paying it back.

And there’s the crux of the matter.  You said you’d pay it back.  Put your name to it, in fact.  Therefore, it stands to reason that that’s exactly what you should do.

Why am I thinking of this?  I’ve seen a few of the debt forgiveness posts floating around social media, as well as those stupid “I am the 99%” wanna-memes.  Plus the talk floating up from below the 49^th about debt forgiveness and other idiot ideas like ‘free’ tuition.  I put free in quotes because, frankly, it’s not free.  Someone is paying, and why the hell shouldn’t it be you?  That and I had some ideas I wanted to wrangle in my mind.

So, now you’ve got student loans. 

“I got these to better myself!” you cry.  “I need this to earn a living wage!” you wail (whatever a living wage actually is).  “You just want education for the rich!” as your teeth gnash together like jackhammers of envy.

Fair.  Cool story bro.  Don’t care.  I don’t care what your reasons are.  They're your reasons and not my concern.  However, you took someone else’s money, and used it for a purpose, and now you have to give it back.  Sometimes with interest.  That’s how it works.  No one looks twice about the fact that you have to pay back a mortgage, or a car loan, or a credit card.  Makes perfect sense.  You spent the money pre-emptively, then you pay it back.  In many cases, in a planned fashion, financing something of worth is a sensible way to do business. 

So, why shouldn’t you have to pay back your student loans? 

“But it’s so hard!” you whine.  “I don’t make a living wage!” you bitch.  Too damn bad.  I thought your loans were for an education that would pay off?  Did you do research into your chosen field?  Did you look to see what your degree program would earn you on the other side?  No?  Well, you made your choice, now deal with it. 

Maybe you should have gone to the school in town, rather than add residence to the tally.  Maybe you should have considered a shorter program, or a trade instead.  Maybe skipped it altogether if your degree program was so useless as to be a ‘barista mill’ (no offence to real baristas.  I truly appreciate someone who can make a good cup of coffee.  Seriously, caffeine = fuel).

Bottom line, if the degree program you want ends in the word “studies” or has the term “social justice” anywhere in it, chances are it’s worthless.  As in, no one will pay you do to that. 

And you know what?  Go ahead and do it anyway.  Whatever floats your boat.  The thing is, the rest of society should not be held to account for your choices.  If you can’t make a 'living wage,' then that’s on you for the program you picked.  Didn’t get any skills anyone wants to pay you to do?  That’s on you.

Now we can cue the chorus of “we were 18 and had no idea!” wailing.  Well, you should have.  You’re 18 years old, for goodness sake!  Old enough to be sent overseas in combat.  Old enough to decide the future of your nation at the ballot box.  More than old enough to guide 5 tonnes of steel, plastic and glass at 100km/hr on a highway.  Old enough to own a gun.  Why aren’t you old enough to choose your major intelligently?

Granted, guidance counselors are completely useless.  Parents have been, in many cases, similarly clueless for different reasons.  “Any degree is a good degree” and “follow your passion and the money will follow” are stupid ideas that should die in fire.  They’re wrong.  They're 'nice to haves.'

Also, be ready to move.  If you can’t find work at ‘home’ then you have to move.  Sorry muffin, you can’t stay in your hometown forever if there are no jobs in your field in that town.  Maybe not in your home province even.  Get over it, or stay there and suck it up.  Yes, it sucks building up a new support network in a completely new place.  Yes, it sucks to have a long distance relationship with your parents/kids/grandparents/family/long time friends.  Get over it.

Pay the money back, and in so doing keep your integrity and your honour intact.  Or don't take it in the first place.

Parents: consider various saving options if you’re going to push your kids to some sort of post-secondary.  RESPs (Canadian registered education savings plans) are a great idea.  Or just bank the money a little bit every year.  If they don’t go, or need less, then you’ve got some extra cash at the end to use, or they can use it to launch themselves into the world.

Right about now I expect there will be some whinging in the background about how the cost of tuition is “out of control!!11!1!!!!!eleventy!!11!!!”

I agree.

The cost of tuition in many programs has risen dramatically, even since the days I was in school some twenty years ago.  Why?  I lay much of the blame on government money.  Interestingly, this fact may also shed light on a solution to both the problems of excess student loans that people can’t pay back as well as rising costs of tuition for worthless degrees.

End government student loans.  All of them.  Loans, grants, any government money going to students to study.  No exceptions.

I’ll wait while the statists amongst you recoil in horror. 

Why did government money cause this problem?  Short version: it was too easy to get.

Government student loans have been around for decades, and in most cases the loans were analyzed in a ‘needs based’ fashion.  That means those who qualified did so on the basis of being unable to afford post-secondary education, or having low ability to afford it.  The amount would often be keyed to the resources available to a given student.  This sounds like a good solution, in that those who really needed the money to go would qualify for it.

However, what happens when there’s an easy source of money that isn’t tested for means of payback?  

Well, the universities can compensate for cash flow problems (read: stupid, profligate spending) by jacking up tuition.  Isn’t that bad for students?  Well, yes, but the government student loans kept flowing so the system kept churning.

Add to that the progressive credentialism of needing ever more greater levels of education (“masters preferred” in job postings) which don’t really add value, as well as various professional faculties (law and medicine, I’m looking at you) needing a ‘pre-degree’ to qualify for your 'real' degree, and you can see why the costs can soar.

So, why will ending government student loans solve the problem?  Well, it won’t for those who already have student loans.  You took the money, you need to pay it back.  Else you’re ultimately just a thief.  Sorry not sorry.

What ending government student loans will do is put the onus back onto the borrowers to prove that their student loan will be a reasonable investment.

So, who should give student loans?  Private institutions.  Let the banks do it.  Loaning money is, after all, a core aspect of their business.  What it will also do is force borrowers to answer the question: will I be able to pay this loan back.  Lenders will also analyze the risk of a given loan, just as they do right now.  If you are intent on pursuing a ‘victim studies’ degree, for which the average annual earnings on graduation amount to minimum wage service work, then the chance of that bank or lender authorizing a huge loan is minimal.  They’ll look at what you likely can pay back, so you may qualify for a few thousand, no more.

Go for a STEM degree, and likely you’ll qualify for more.  Should you take all of it?  Only if you absolutely have to.  But at least as an engineer you have a good shot at handling that debt.  The loan gets treated as a lending risk, with the attendant analysis conducted by the lender, and ideally students won’t even qualify for a debt load they couldn’t afford.  If they need more, they can work for it in the summers or part time. 

Do I have full faith that banks will properly analyze the risk?  Well, no more or less than they already do.  And it's then between the lender and borrower, with no involvement from the rest of us.  The onus will be put back on the borrowers and lenders to make sure they all have eyes wide open before money changes hands.  Maybe it will also make some students think twice about their choices before taking on large amounts of money with only a nebulous idea of payback.

That, and the government won’t be on the hook for defaulted loans or need to have the cash reserve to fork over the money.  And that means less risk and burden to the taxpayer, which is the very best part of all.