As some would have it, I'm a deadbeat. For those who think so, my plight inspires no sympathy. Follow me below the fold, as I confess just how terrible I am.
For as long as I can remember, I've always wanted to be a lawyer. No, I'm not Ray Liotta. This isn't Goodfellas. But as far back as I can recall, that's what I wanted. Perhaps it was because as a youth I had a penchant for arguing with anyone about anything. When I found out that some people did that for a living, I was hooked. My parents used to suggest as much- although looking back it may have been as derisive as it was encouraging when, exasperated, they would exclaim "You should become a lawyer!"
As I got older, and it became clear that I had the academic wherewithal to actually make that goal a possibility my parents were nothing if not supportive. I grew up decidedly middle class. My father worked for the USPS. My mother was a waitress until my sister and I were old enough to not need constant supervision, then she became a realtor. They did fairly well for themselves, and we didn't lack anything. But wealthy they were not. When they divorced, that became a little more clear.
They had always insisted that both of their children would go to college, and they always promised to make that a reality for us. I was lucky enough to receive a pretty hefty scholarship for my undergrad education, so they were able to pay my tuition (less than state school, as it turned out) without loans. I escaped 4 years of undergrad debt free!
Law school was a different matter entirely. After a year or two of aimless work, the realities of the new economy were setting in. I graduated in late 2007, see- and by mid 2008 everyone was holding their breath waiting for disaster to strike. So, when I set out to start law school in the fall of 2009, I knew I would be funding this round on my own. There were no scholarships this time, no financial aid- just loans. I took them gladly, knowing it was the only way to achieve my dream.
Well, 3 years of law school have come, and almost gone. I'll be graduating in May, if all goes according to plan. By November, I'll have to start repaying my loans. The amount I owe is large. Just shy of $200k, and over that if I end up having to take out a private bar study loan (which is looking more likely, as my bank account dwindles). Roughly 1/3 of my loan generates 6.5% interest annually, the other 2/3 is at 8.5%. I'm looking at roughly $15k in interest payments in the first year.
Now, as some would have it I made this bed, and I should lay in it. To some extent, they are correct. I knew what I was getting myself into. I also understand why student debt can't be discharged through bankruptcy. There's nothing for a creditor to take back from me to get any compensation. To the unsympathetic, if I can't pay back what I borrowed, I'm a deadbeat. Nobody made me go to graduate school, or take on the debt I did. Why should I be helped?
Well, I think we ought to help people in my position because it would be the right thing to do. We should be making it easier, not harder, for people to invest in themselves. We should also do it because it would be good policy. A whole generation of people who have to start their careers off buried so deeply in debt does not bode well for a consumer economy. It's tough to be a consumer, or an investor for that matter, if one is also so very insolvent.
I'm not asking for more outright loan forgiveness, which is actually available to those who work in qualifying public service jobs. Although the public sector generally pays less, if you include the money saved on loan payments it gets quite a bit more competitive. I'm also not asking for interest free loans, as I understand that lending money involves risk for which the lender ought to be compensated. I would make a few suggestions, though (leaving aside the issue of the outrageous cost of attending college, or in my case graduate school).
1. I accept that interest is the price of borrowing the money. Risk ought to be compensated, there is a time value to money, etc. Given the fact that my debt can't be discharged via bankruptcy, it seems to me the risk of default is quite low. I can't really default, can I? If I'm not mistaken, student loan debt is eventually forgiven after 25 years. I'd rather not still be paying for my education when I'm 50. We could have a lower interest rate, though. It would be much less nauseating to think about paying my loan next year if I didn't have to consider that I'll owe as much in interest as I've ever made working in a year. This leads me to my second, and perhaps more important suggestion.
2. Capitalization. For those who are unfamiliar with that term (not many, I suspect) it means that whatever interest is generated and not payed will be added to the principal, thereby increasing not just the amount owed, but the interest generated as well. I would suggest that we ought to cap how much student loans can be capitalized. I don't think its unreasonable to ask that the total increase in principal not exceed the interest rate over the lifetime of the loan. That's not to say they can't still expect interest payments, even at the maximum increase in principal. But if I'm already not able to pay the interest (let alone the principal), letting the debt mount the way it can seems cruel.
Anyways, that's my confession. If I was a better Catholic, I'd probably have tried to include some parody of the Act of Contrition. 'Oh my lender, I am heartily sorry for having offended thee..." but I don't remember how the rest of it goes. I'd open it up for comment though, if you've made it this far. Am I, and those like me, deadbeats for trying to pursue our dreams? Does it make me a leech on society to wish that government would make that easier? Am I an entitled brat, for thinking I can have whatever I want, whenever I want it? Because when GOPers snidely refer to us as deadbeats, that's what they're saying. I'd like to think I've worked hard to get where I am so far, and that I'm not a slothful, indolent, and spoiled man child crying for help from Mommy Government. Yet that's what those on the Right tell me.
What do you think?