Congrats on finishing grad school. Good luck affording ramen.

Photographer: SeongJoon Cho/Bloomberg

Paying Student Loans Is Hard. Do It Anyway.

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Usually, when someone writes an essay about why they defaulted on their student loans, they strain to include details that evoke sympathy. The parents who struggle to feed and clothe their children, and get them to school in a car that is forever breaking down. The hapless victims of places like Corinthian Colleges, first-generation strivers who believed that a degree -- any degree -- would give them a ticket out of the grind. The law school graduates taken in by misleading employment statistics that led them to believe their six-figure debt would be easily repaid when they got that first law job. The desperate millions who found the financial crisis robbing their parents of the ability to pay tuition, at the same time as well-paying jobs became a lot harder to come by. Who wouldn't be sympathetic to any of these folks?

In last weekend's New York Times, Lee Siegel tried an entirely novel approach: He described his decision in the least sympathetic terms possible. He offered not one good reason that he couldn't pay his student loans; the best he could do was to say he didn't want to pay them.

Worse is the contempt he conveys for the drab, plebeian world of state colleges and office jobs, and for the people who work hard for their degrees and then work hard at the best job that will let them pay their bills. You know ... most people.

"Maybe I should have stayed at a store called The Wild Pair," he writes, "where I once had a nice stable job selling shoes after dropping out of the state college because I thought I deserved better, and naively 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."

Perhaps I am a bit biased against Siegel, because I too, dreamed of becoming a writer while slightly hampered by a mountain of student loan debt -- high five figures, in my case. And like Siegel, I ultimately decided to follow that dream. The difference between us is that while following my dreams, I also paid off the debt, as I had promised to do when I took out the loans for my fancy business school education.

Did this involve selling shoes in my spare time? Was I forced to abandon my ideals and turn to Wall Street for a soul-destroying sellout job? Nope. I paid off my loans by the simple expedient of living on as little as possible when working in Manhattan. I found a tiny, subterranean apartment that initially rented for just under a thousand dollars a month. I attended every event I could find that so much as hinted at free food. I didn't drink unless someone else was buying . I learned to clip coupons, and realized you get a lot more value for your dollar if you don't insist on the fancy brand-name ramen. I didn't buy new clothes until all the old ones literally had holes in them. During the more temperate months, I wore through the soles of my shoes walking to work, to avoid the cost of public transportation. Every spare dollar I got in freelance money went to that mountain of debt. Slowly, slowly, this trickle of money wore down the mountain, until my payments dropped from a terrifying 40 percent of my paycheck to a manageable $200 a month. And as I earned more, I paid them off entirely.

There are lots of people out there in similar situations, folks who took on professional school debt but for one reason or another, didn't earn professional school salaries when they graduated. Were we an oppressed class? Some of the folks from third-tier schools who were misled about the job prospects for graduates might count as oppressed. But those of us who went to top-tier schools and freely signed those promissory notes without anyone putting a gun to our heads have nothing to complain about. We got the degree, we owed the money, we paid it back. I suspect most of those feel about Siegel's guiltless confession the way I do: What's so special about him? He didn't even get his degree during the inflationary spiral of recent decades; he went to school back when it was possible to work your way through college.

Is there a problem with student loans? Yes. College costs are rising much faster than inflation, and it's hard to see that they're actually adding more educational value for the money. Employers who pay low salaries demand educational credentials that are far higher than the wages justify. People whose parents can't simply front them $100,000 or so to get those credentials are faced with some difficult choices, which is bad for them, and bad for the occupations that are increasingly staffed by a narrow mandarin class.

But the fault is ultimately with the colleges, and with the employers, not with the banks that lend you the money to fulfill their demands. Going back on your promises doesn't do anything to change the behavior of the true culprits; it punishes a bank whose mistake was lending you money. Of course the borrower is punished as well. Siegel may be unpleasantly surprised when he discovers that the government garnishes the Social Security checks of people whose student loans are still in default.

But Siegel doesn't really argue for changing the system. He argued only that someone else should have to pay for his education. Namely: taxpayers and other borrowers. Perhaps the district manager of the place that sells him his shoes.

  1. Dates and professional events, I mean; one of the keys to being successfully broke is never to mooch off your flusher friends.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Megan McArdle at mmcardle3@bloomberg.net

To contact the editor on this story:
Philip Gray at philipgray@bloomberg.net