US: Why I Defaulted on My Student Loans

ONE late summer afternoon when I was 17, I went with my mother to the local bank, a long-defunct institution whose name I cannot remember, to apply for my first student loan. My mother co-signed. When we finished, the banker, a balding man in his late 50s, congratulated us, as if I had just won some kind of award rather than signed away my young life.

By the end of my sophomore year at a small private liberal arts college, my mother and I had taken out a second loan, my father had declared bankruptcy and my parents had divorced. My mother could no longer afford the tuition that the student loans weren’t covering. I transferred to a state college in New Jersey, closer to home.

Years later, I found myself confronted with a choice that too many people have had to and will have to face. I could give up what had become my vocation (in my case, being a writer) and take a job that I didn’t want in order to repay the huge debt I had accumulated in college and graduate school. Or I could take what I had been led to believe was both the morally and legally reprehensible step of defaulting on my student loans, which was the only way I could survive without wasting my life in a job that had nothing to do with my particular usefulness to society.

I chose life. That is to say, I defaulted on my student loans.

As difficult as it has been, I’ve never looked back. The millions of young people today, who collectively owe over $1 trillion in loans, may want to consider my example.

It struck me as absurd that one could amass crippling debt as a result, not of drug addiction or reckless borrowing and spending, but of going to college. Having opened a new life to me beyond my modest origins, the education system was now going to call in its chits and prevent me from pursuing that new life, simply because I had the misfortune of coming from modest origins.

Am I a deadbeat? In the eyes of the law I am. Indifferent to the claim that repaying student loans is the road to character? Yes. Blind to the reality of countless numbers of people struggling to repay their debts, no matter their circumstances, many worse than mine? My heart goes out to them. To my mind, they have learned to live with a social arrangement that is legal, but not moral.

Maybe the problem was that I had reached beyond my lower-middle-class origins and taken out loans to attend a small private college to begin with. Maybe I should have stayed at a store called The Wild Pair, where I once had a nice stable job selling shoes after dropping out of the state college because I thought I deserved better, and naïvely tried to turn myself into a professional reader and writer on my own, without a college degree. I’d probably be district manager by now.

Or maybe, after going back to school, I should have gone into finance, or some other lucrative career. Self-disgust and lifelong unhappiness, destroying a precious young life — all this is a small price to pay for meeting your student loan obligations.

Some people will maintain that a bankrupt father, an impecunious background and impractical dreams are just the luck of the draw. Someone with character would have paid off those loans and let the chips fall where they may. But I have found, after some decades on this earth, that the road to character is often paved with family money and family connections, not to mention 14 percent effective tax rates on seven-figure incomes.

Moneyed stumbles never seem to have much consequence. Tax fraud, insider trading, almost criminal nepotism — these won’t knock you off the straight and narrow. But if you’re poor and miss a child-support payment, or if you’re middle class and default on your student loans, then God help you.

Forty years after I took out my first student loan, and 30 years after getting my last, the Department of Education is still pursuing the unpaid balance. My mother, who co-signed some of the loans, is dead. The banks that made them have all gone under. I doubt that anyone can even find the promissory notes. The accrued interest, combined with the collection agencies’ opulent fees, is now several times the principal.

Even the Internal Revenue Service understands the irrationality of pursuing someone with an unmanageable economic burden. It has a program called Offer in Compromise that allows struggling people who have fallen behind in their taxes to settle their tax debt.

The Department of Education makes it hard for you, and ugly. But it is possible to survive the life of default. You might want to follow these steps: Get as many credit cards as you can before your credit is ruined. Find a stable housing situation. Pay your rent on time so that you have a good record in that area when you do have to move. Live with or marry someone with good credit (preferably someone who shares your desperate nihilism).

When the fateful day comes, and your credit looks like a war zone, don’t be afraid. The reported consequences of having no credit are scare talk, to some extent. The reliably predatory nature of American life guarantees that there will always be somebody to help you, from credit card companies charging stratospheric interest rates to subprime loans for houses and cars. Our economic system ensures that so long as you are willing to sink deeper and deeper into debt, you will keep being enthusiastically invited to play the economic game.

I am sharply aware of the strongest objection to my lapse into default. If everyone acted as I did, chaos would result. The entire structure of American higher education would change.

The collection agencies retained by the Department of Education would be exposed as the greedy vultures that they are. The government would get out of the loan-making and the loan-enforcement business. Congress might even explore a special, universal education tax that would make higher education affordable.

There would be a national shaming of colleges and universities for charging soaring tuition rates that are reaching lunatic levels. The rapacity of American colleges and universities is turning social mobility, the keystone of American freedom, into a commodified farce.

If people groaning under the weight of student loans simply said, “Enough,” then all the pieties about debt that have become absorbed into all the pieties about higher education might be brought into alignment with reality. Instead of guaranteeing loans, the government would have to guarantee a college education. There are a lot of people who could learn to live with that, too.

  • bls46

    MMmmmm……so financial accountability is for others ! Nice gig if you can get it !

    • Millie_Woods

      The liberal arts crowd is so creative. They have an answer for everything.

      • Alain

        They would sing a different tune if anyone refused to repay them money they had lent.

        • dance…dancetotheradio

          Yeah, bailout, we’re too big to fail.

        • Millie_Woods

          They don’t lend their own money. They get the government to give away other people’s money.

  • Where is consumer protection when it is needed.

    Colleges should not be allowed to “sell” educational paths that are financial dead ends. Especially on credit.

    When this issue is dealt with. US and Canadian colleges can get back into the business of actually educating students for the real world.

  • ntt1

    why did he invest so much in a sketchy career like writing? could he not have quietly built it up as a side line while being gainfully employed? do you really need a degree to be a good writer? there seems to be hundreds of writers with degrees that are really poor quality. I attended art school with the undirected notion of making a living as an artist , I was self funded and all these years later I would have to admit that apart from the boinking and the sometimes legendary exploration of psilocybin mushrooms, I received very little long-term useful information , I am in a well paid creative art oriented support trade now and get twice as much real information from the countless supplier’s material use seminars as any art history course taught by a bored failed artist.

    • dance…dancetotheradio

      ‘small private liberal arts college’
      ‘turn myself into a professional reader and writer’

      • Canadian

        Didn`t they use to have an ad in Archie comics?

  • Uncle_Waspy

    The colleges are greedy as hell and they take advantage of the naive kids who don’t fully grasp the long term financial consequences. They should be shown a simple graph or pie chart that clearly illustrates how that it would 200 years for a Starbucks barrista making minimum payments to repay her student loan, which with accrued interest has ballooned to 5x the principle.

    Hopefully this racket collapses in the near future.

    • dance…dancetotheradio

      The racket has been going on for a long time.
      My first year of university cost less than a grand and I earned enough during the summer to pay for it.
      I flunked out that first year.
      Mainly because I didn’t have my teenage years until I left high school.
      And I really didn’t know what I wanted to do with my life.

      • Uncle_Waspy

        Don’t worry about flunking, Dance. It just means it wasn’t the right path.

        • dance…dancetotheradio

          I got my act together years later while working in the interim.
          The best thing about marrying a girl when you are dead broke is that you know that she loves you.
          Not for your money because you haven’t got any.
          But, for what you might become.

    • Alain

      Frankly in light of the dumbed down generations nowadays I doubt the graph, chart or all the evidence in the world would make them see the light.

    • BillyHW

      If they can’t do the calculation necessary to construct the chart, then they should also be told that they are too stupid to go to college.

    • Paulla

      Did you know that some professors make more than the President?

  • shasta

    Another leftist POS that thinks morality and rules are for someone else.
    His “education” was a complete waste of resources.

    • Alain

      It is called theft, pure and simple.

  • Dana Garcia

    Silly me — I paid all my bills. I could have pleaded that doing so sapped my wonderful creativity that the world desperately needs.

    That said, college is a racket, unless you use it to get particular valuable skills, like medicine etc.

    • Alain

      My second son is a doctor along with his wife and they have finally almost finished paying off their student deeds. Neither one would ever have considered doing otherwise.

  • FactsWillOut

    So, this asshole took a crap degree course, bankrupted his family, then said “fuck it”.

  • tom_billesley

    The UK system is unsustainable.
    Student debt is now so high compared to average salaries that many graduates in respectable public sector professions will be unable to repay their fees – 73 per cent of all UK students will still be unable to pay off their loans after 30 years, when debts are automatically wiped.

    The answer won’t be to cut the public sector, it’ll be to provide subsidized housing for employees in the sector.

  • BillyHW

    Hire only STEM graduates, even for non-STEM jobs.

  • EarlyBird

    If you like your loan, you can keep it.

  • BillyHW

    Sounds like he still wants something for nothing.

  • Clear Thinker

    Must be a democrat, always looking for a free lunch.

  • Norman_In_New_York

    A college education is the second-most expensive purchase a person makes in his lifetime. Yet he gets more consumer protection in a can of dog food.

    As for the lending business, we are witnessing the same practices that caused the disaster of 2008. Banks issue credit cards and loans to deadbeats because they are counting on the government to bail them out. And government economists are part of the problem as well. They look upon consumer spending as the sine qua non of prosperity without ever inquiring into the source of that spending.

  • Drunk_by_Noon

    Actually, I don’t hold it against him.
    This is the market at work.
    The University system is selling worthless degrees and will keep doing it until it’s no longer profitable.
    If he defaults, and thousands or millions like him default, the system can self-correct (after it implodes) and universities can get back to teaching real classes and granting real degrees.
    I would limit what universities can charge (or atleast what can be covered with loans and grants) for degrees based upon the earning power of that degree.
    Do you universities want to crank out a bunch of liberal arts majors?
    Do you universities still want to at a tuition cap of $10,000 a year?
    Oh, Okay, maybe not so fine then.

    • A class action suit against a university for peddling worthless degrees and lying about their market value might be a good start.

      • Drunk_by_Noon

        Like most class action suits, they only benefit the lawyers and the consumer gets an offer for coupons or something else just as worthless.
        No, this problem requires a bit stronger remedy.
        The government created the imbalance in the first place with easy financial aid, now they are almost the only ones that can slow down the merry-go-round now.

  • Billy Bob Thornton

    The jobs aren’t there so I don’t blame this individual.

    Nowadays there are just minimum wage jobs and all the family supporting jobs have been sent overseas.

    During the Bush years, a lot of the manufacturing jobs left around 2003 to 2005.

    By the time 2006 came around, it was already predicted a huge recession was going to occur.

    The US isn’t the greatest nation on Earth due to corporatist policies by both parties.

    Both parties are like mirror images on economic policies.

    And yes much of the reason for this is because the US is a debt based society, so they need to push the cart further and further along since the Reaganist policies have been followed for 30+ years. Those ideas include taking out more credit cards, going into debt to succeed, going to university, corporations buying out businesses so no small businesses exist and so forth.

    People on the right talk in generalities but both parties whether they speak of more equality or more free markets results in the same thing.

  • Billy Bob Thornton

    People seem to forget constantly and I stress this that back in the late 70’s/early 80’s you could have just graduated from OAC in Ontario and be employed for life.

    The real question is what occurred in our economy since then that impacted job security, the structure of the economy and what allowed our economy to go so backward where we needed diplomas by the 80’s. By the 90’s, it was a bit more than a diploma. You need to have 4-year degrees. By the 2000’s to 2009, BA’s are now necessary. Nowadays, the average Millenial needs 2 diplomas or one BA and co-op to go with the education. Sounds to me that the more economy progresses the more education is required. It is no wonder why when people graduate more often than not they need to go back home and live with their parents.

    Things are simply too expensive.

    Living standards have gone down since the late 70’s/early 80’s.

    I attribute it to free trade which they said at the time in 1988 that many jobs each month would be lost due to it going into law. So the fact is we have ourselves to blame.

    We trust these politicians yet I believe they don’t have our best interests at heart.

    I blame free traders when we should have listened to people like Ross Perot, Ralph Nader and other people that believed we should have been for a mixed model without free trade.

    So it doesn’t matter what the university degree you get. It matters more about what type of jobs are being created and is this resulting in catering more to corporatism and our society’s jobs and our sectors being hollowed out.

  • Canadian

    I chose to work, and so don`t owe anybody a penny.
    I could have been an artist, I suppose….

  • TexanDC

    Talk about scum. Chooses a crappy paying field to study and waste money on then wants to cry about how hard it is to pay for the crappy education. Then defaults on the loans and wants people to feel sorry for her.

  • Bobby Woodlawn

    Typical liberal twat. I was born poor but I am entitled to so much more…I want to be a writer…adding nothing to society.
    Society would be much better of if you kill yourself.

  • Joy Freiheit

    This is a shocking article. Nobody forces people to attend tertiary education establishments, such as “college”. Those who do go to college need to assess it as an investment in future earning capacity, not take it for granted as some general entitlement to an extended adolescence.

    In Australia, the government has tried various ruses to increase uptake of tertiary education, including free tuition (a disaster) and the current “Higher Education Contribution Scheme”. Some students pay full tuition — if not Australian. Some Aussie students pay off the HECS debt early; I believe this attracts a discount.

    I studied Science, after winning a scholarship. That predated the years when tuition was free. I paid for some later study.

    When I was at uni, I studied hard; no time was wasted in student politics or “protesting” marches. The “Arts” students had plenty of time to spend in those ways but I despised that attitude then and I despise it now. Most Australians call such people “bludgers”: people who sponge from workers and waste their energies. Usually, the compound noun is “dole-bludgers” for those who live on welfare, instead of earning a living, but I view those who pose as students as “bludgers”, too.

    This video is relevant: