Wednesday, April 1, 2009

The Next Bailout: Student Loans?

The question is: Should current holders of student loans get a federal bailout, just like the banking and automotive industries?

My short answer: No.

My longer answer: No. Really. No.

There’s a movement, reported about here, to get the federal government to cancel current student loan debt, which totals about $600 billion – a bit less than the banking industry received in the first round of bailouts approved last year.

The article contains an interesting journalistic “others” statement, unattributed because, obviously, others have said it and everyone ought to agree with it: “Others said [lawyer Robert] Applebaum at least was raising awareness of the problems with how higher education is financed.”

Applebaum, of New York, started a Facebook group with the aim of getting the government to cancel outstanding student loans. He argues he had to leave a public service job as a prosecutor in Brooklyn for a private law firm to pay down $96,000 in student loan debt. The article goes on to quote other students, like John Lampman of Hampden, Maryland, who owes $180,000 in student loans after earning a masters degree in photography and electronic media.

I feel badly for students starting out in this economy with this kind of debt. But I’m firmly in the camp of David Ribar, an economics professor quoted in the story as saying:

“Think of the poor kid who for one reason or another refused to take out loans, didn't go to college and is now making decent money. That person now has to pay taxes so somebody else's loan can be forgiven? That doesn't seem very fair.”

It’s not fair, and I’ll tell you why. These people bought educations they can’t afford, just as irresponsibly as people who bought homes they can’t afford. Why should the taxpayer have to pay for their overindulgence?

Overindulgence? Is that fair? Yes it is. I speak as a student who is only six credits away from completing a masters degree in a program that is nationally-recognized for producing excellent technical communicators. For the past two and a half years, I’ve worked a full-time job and gone to school, building on the bachelor’s degree I already have in journalism and mass communication. During the seven years I’ll have spent in school, my total student loan debt was $1,500. I got a few tiny grants here and there, plus a measly $250 scholarship. The rest of the bill, I paid for, by working summers and even a few semesters at full- and part-time jobs. The masters degree I’m working on now will be completely self-funded. All of this because I chose schools that didn’t require me to break the bank to attend. My total bill for my masters degree will be less than $9,000.

And I get tax breaks for this money, just like holders of student loans get for their outstanding debt. The secret here is that I didn’t let my desire – my need – for an education to outweigh my ability to pay for it. I know I’m lucky. Many are not in my shoes. But many are. They’ve worked hard and attended less expensive schools in order to achieve their educational dreams. Maybe the University of Idaho and Utah State University don’t look as impressive on a resume as the Maryland Institute College of Art. But I don’t feel I’ve sold myself short attending less-expensive schools. The program I’m in at Utah State is well-regarded nationwide. And it’s my ability to work and think that people will look at, not the cost I had to pay for those abilities. Good schools produce many mediocre students who have much heavier debt loads than the brightest who come out of state universities.

So I say no to forgiving current student loans, the same as I say no to forgiving the debt of people who bought homes they can’t afford. I should not have to pay for the indulgences of others.

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