Student Loans, Debt, Education, College

In Defense of the Millennial in a Stupid Amount of Debt

The student debt loan situation in America is something that is drastially underplayed in the media in its effects on the nation currently and its future in the coming years. Not being as sexy of a topic as war or racial issues, it will slowly but surely corrode our values and culture. Being a member of the millennial generation that has some decently strong sense of fiscal responsibility and awareness, I am torn as to my feelings on this. I think one thing is for certain – this is a crisis and it is not being treated as such. It is being pooh-poohed away as the problems of a bunch of idiot liberal arts majors with stars in their eyes. However this is not my experience at all. Much of this can be taken as weak anecdotal evidence to be sure, but it may help cast some light on some of the people under this debt burden.

I grew up in a purely middle class household, we never wanted for anything and went on yearly vacations, received a $5,000 beater truck for my 17th birthday and worked every summer to earn spending money for the year. My high school had a College Services office with a staff of 2 and 180 high performing NYC Magnet school students applying to anywhere from 5-15 schools each. The year prior they had sent all of the Boston University applications to Boston College, so while we were supremely desirable candidates my lack faith made me take the process of applying into my own hands. My parents were no better guidance in this realm and they pushed me to go to the best private university I was capable of attaining. No mention of money ever occurred. For a 17 year old who has always had free schooling and subsidized school lunches, why would I suddenly be capable of understanding the stratospheric costs of 4 years room and board and education? I played video games and ping pong roughly 40 hours a week and failed every math course I ever took.

We were supposedly extremely gifted children, we took electives on the Cyrillic Alphabet and drawing in AutoCAD at 15 years old; yet never had one word of Personal Finance taught to us. I went through all four years of college similarly to High School, I was left to fend for myself in regards to spending money but tuition was taken care of.  This worked just fine as far as I was concerned and I graduated with no job and about 50$ to my name in the wake of the largest recession in recent memory. This would all have been dandy if my parents had not divorced a week or so after my graduation. Sadly we are speaking of this purely in a financial light, but my parents breakup and my carefree college choice had now just surprised me with a portion of the debt amounting to 40,000$ that was never spoken of previously.

Nothing about this is for pity. I know I have had massive advantages in life and even in my general surliness try to appreciate each day fully to be where I am now. I took that debt on without a word and doubled the monthly payment just because I knew debt sucked. I survived a relatively decent chunk of debt with no real problems, but my current problem and thought occurs with the choices I had to make to tackle this debt. You see, I had spent the last few months of college polishing my resume and getting my teacher recommendations in order to join the Peace Corp. I had to ask numerous teachers and bosses to write a letter that would allow me to be sent off to live in Africa for, I believe it was no less than 16 months. I was an idealist, and I thought I could help the world. I was political and passionate and ready to dive in. I was set to go when my parents took me aside and explained the new weight. I would like to reiterate that I am not complaining, just stating a fact, debt has a way of turning people away from doing (possibly) extremely positive jobs and paths in life that are less fiscally rewarded. My concern is the effect that this will have on our psyche and our culture over the next ten to twenty years.

Further anecdotal evidence abounds with my girlfriend. Same education as myself, we went to high-school together and filled out college applications together. Her family was not so well off, to the point of her taking on a job during the school year to get by, though she found immense pleasure in dance and reading to get through. Her family again never discussed money, and she applied to various state schools as they were supposed to be less costly. Attending a large out of state school on a small partial sports scholarship, she was at the top of her class in Finance and graduated into a back office Investment Banking job. Her parents then handed her a bill for $120,000 saying that they had lost most of their money in the financial crisis and unfortunately this is how it is. She had been planning to try to go to Broadway, and ended up having to help her family not lose everything while taking on 1500$ month loan payments. Now again let us not throw pity around, but let’s just try to see what is happening here. There is a lack of communication between the generations on the important topics of education and money, and more importantly the two combined; financial education.

To be honest – my schooling did not feel worth $40,000 much the less $120,000. I sat half asleep or playing video games in a large lecture hall and cruised through. Any time I did cue in I just had to double check for two seconds to make sure that they were still teaching business courses as if we were about to launch a Marlboro campaign on Mad Men. We were stupid kids. We had never held $1,000 much the less knew how long it would take to pay down debt. We weren’t even frivolous, both getting business degrees to be certain of employability. The weight of these loans will keep millions of students downtrodden for decades. Should we be allowing minors to be anywhere near that much money? This is a system of debt slavery, and it is for sure bad business for the country.

The effect on the nation is incalculable. As a student that went to the business school, I do hate all the liberal arts wimps. But I know that they have value and we should not be burying them or the positive that they could do for the world under stupidly and poorly acquired debt. By screwing over the youth of our nation we are shooting ourselves in the foot, when that foot will have to support grandpa Baby Boomer real soon.

I was watching Chomsky’s documentary, Requiem for the American Dream, the other day and he crystallized most of these thoughts for me. He appears much more conspiratorial than I tend to be by stating that this debt system is an intentional attack on the middle and lower class by what he calls the business class. I used to feel there was a big overarching cabal of evil, but I tend to just now see it as millions of cabals of opportunistic shysters trying to make money in any way possible. America gives them the freedom to do that, so it is fine and brilliant to do so, but it sucks being one of the uneducated masses that got burned. It also just seems increasingly irresponsible for the education industry to be accessible to this sort of financial jiggering, but also that we allow people trying to better themselves to be swindled.

I am not trying to be an apologist for the millennials and the dumb amount of debt. I for one have responsibly paid mine down and I made choices in life in order to do so. I could have been a zookeeper by now or still in the Peace Corp, but I went a more lucrative and boring route. This topic has been beaten to death, but I just hate the vitriol for the “idiots” with massive student loans. Turns out it is really easy to just have debt! Especially when you are basically a tall child! Signing up for $100,000+ of debt at an age before 18 should be extremely discouraged and frowned upon as a business practice in general. Being an advocate for the free market I can see the outlier cases where it would be useful, so at least have personal finance be taught in the schools! The simplest and most effective lesson ever would be, this is what a bi-weekly check for a $40,000 a year salary looks like, and this is what your loan payment looks like. Otherwise we are going to have a generation of people languishing under the weight of debt, stunting the growth of our entire nation.