Rewarding Irresponsible Behavior

Update: I originally wrote this back in March when Rep. Hansen Clarke introduced his Student Loan Forgiveness Act, which would lead to the regrettably unfair situation of some people paying back their student loans in full, while others would qualify to have tens of thousands of dollars worth of debt forgiven.

Lately, with the prospect of the cost of student loans set to double, it’s relevant again to make the case that it’s possible to acquire a college education without taking on a crippling load of debt. We’re fortunate that our daughter was capable of qualifying for academic merit scholarships (no stinkin’ FAFSA for us, baby!), but if that hadn’t been the case, we would have explored other options, including attending an in-state university while living at home, attending two years of community college as part of her undergrad degree, dipping more heavily into our savings, or, heaven forbid, managing it the way they did in the old days and requiring her to work her way through school.

America’s collective student debt has reached $1 trillion. That can’t be a good thing. It’s time for parents to start acting like parents instead of The League of Fairy Godmothers, happily seeing to their childrens’ whims and start saying, “No.” As in, “No, we can’t afford to send you to Harvard,” and, “No, you can’t live on campus,” and, “No, you won’t die of shame if you attend community college,” and, “No, we won’t co-sign a loan for you.”

When parents and prospective students start to approach the college selection process as consumers, rather than spoiled children in a candy store, maybe colleges and universities will have some incentive to start controlling costs.

I think we can all agree that when you reward a particular behavior, you’re likely to see more of it. That’s the reason we tell our children, “good job,” when they finish their homework on time or give the dog a biscuit for responding correctly to a command. So it’s quite shocking, really, to see someone suggest that rich rewards should be offered to people for irresponsible behavior, yet that’s exactly what Rep. Hansen Clarke (D-MI) is proposing with his Student Loan Forgiveness Act of 2012 (HR4170).

Melissa Horton, a practicing attorney who apparently saddled herself with a mountain of student loan-debt, rather self-servingly pimped the legislation for Rep. Clarke, penning an op-ed that appeared in the March 16th edition of the Washington Post. She explains how the legislation would work.

Clarke’s bill proposes forgiving as much as $45,520 of eligible student-loan debt after new borrowers have made 120 payments — equivalent to 10 percent of their discretionary income for 10 years — or would forgive any outstanding debt for those whose loans predate enactment if the borrower has already made 120 payments in the past 10 years. Even better, the forgiven amount will not count as income, so debtors need not fear paying higher income taxes for 2012.

Then, just in case you’re not quite as excited as she is about this, she goes on to explain how this is really just a bill to kick start the economy.

This legislation would be an impetus for economic growth by helping indebted college graduates get out of the renting cycle, build a small business, or stop putting off major life decisions such as starting a family.

As it happens, my youngest child is currently attending the University of Alabama, a state school. We’re not Alabama residents, so tuition runs a little over $20,000 a year, plus room and board, books and travel expenses between Alabama and our home in Washington State. My husband is a blue collar worker, and I work part-time from home so you might be wondering why I’m not thrilled at the prospect of possible relief from her crushing load of debt.

The short answer? She’s going to graduate from college 100% debt-free. I know we’ve all been conditioned to believe that a college education is impossibly expensive and can’t be financed without government subsidized loans, but I submit that it’s very doable if you encourage your child to have realistic expectations and to work hard so as to qualify for as many merit scholarships as possible.

Our daughter loves the University of Alabama, but, honestly, it wouldn’t have made her short list if money had not been an object. She would have loved to attend an Ivy League school or Santa Clara University or Stanford, and, like Ms. Horton, would likely have been accepted anywhere she applied. Unlike Ms. Horton, she made a mature and financially responsible decision to attend a school that was within our means. Well within our means as it turned out, as Alabama offered her a generous package of scholarships.

Given her academic credentials and minority status, Ms. Horton undoubtedly could have found many colleges who would have made her a similar offer. Instead, she chose to attend a college she clearly couldn’t afford, possibly for reasons of vanity, and now makes quite a point of blaming her parents for her current level of student debt.

Looking back, it’s easy to say that my parents failed. They should have asked more questions and sought counsel. More important, they should never have co-signed the loans or allowed their financial information in our aid applications because they had no intention, nor means, of paying for our pricey educations.

Then, for good measure, she goes on to curse  something or someone for failing to tell her parents that allowing their child to take on $100,000 in debt before graduating from college is a very, very bad idea.

Nine years, two degrees and one military commission later, I curse the lack of assistance my parents received in preparing me for school debt.

Ms. Horton’s parents are employed as a nurse and a law enforcement officer, two professions where you would hope common sense would be applied on a daily basis, but, for whatever reason, it was clearly not applied to to reach a rational decision regarding college debt and foolish, irresponsible commitments were made. Wouldn’t it be a slap in the face to my daughter and others like her, who did the responsible thing and set aside their desires to attend more prestigious schools, to be forced to subsidize the cost of attendance at those schools…for someone else? 

Moreover, and returning to my original point, wouldn’t the number of people making theses kinds of reckless financial decisions increase if the behavior were rewarded with rather large financial incentives? Who would even try to pay their loans back in full, when their college education could be discounted by a full year’s tuition at a private university? Liberals – and I’m assuming that Rep. Clarke is liberal – are constantly yammering on about fairness and social justice. Where’s the fairness here?


Filed under Washington

5 responses to “Rewarding Irresponsible Behavior

  1. Cindie M

    Where is the fairness? Rewarding Irresponsible behavior? Foolish commitments?
    I believe you are being unfair, insensitive, and close-minded. Hopefully your daughter will be successful in college and success will follow her throughout her career. Hopefully college will be the best decision and investment she has ever made for herself. Thank goodness she had you to help her make the right decisions. Well, some of us did not have a hand to hold through the whole college process. We had dreams and desires for a successful future, and were brought up believing that a college education was the best investment for our futures. I did not go to college right after high school… I went to college in my 30’s. I am not irresponsible, I am not foolish, I am not looking for a free ride. I suffer with student loan debt everyday… I worry about saving for my daughter’s college… everyday, I worry about my financial future… everyday. I am one paycheck from getting behind on my mortgage. Are you going to judge me? Are you going to call me irresponsible, and foolish? Do you think I should blame myself? Do you think I deserve to drown in a lifetime of student debt? You do not know MY story, or the story of thousands of others. We need help… some of us have been less fortunate than others, as far as our college choices and careers go. We are not looking for a free ride, but the thought of seeing a glimpse of light at the end of a very dark tunnel is a dream I hope comes true for me, and for those who deserve it!
    This act would help those who are in need. I wouldn’t consider it a “reward” …. I would consider it a blessing!
    You should not be so quick to judge… every situation is different and unique… open your mind, and be more sensitive to those who are struggling by no fault of our own. Some of us are responsible adults and are sadly becoming unstable, and full of uncertainty because of financial strains. We just need some relief that is unavailable with student debt.

    Where is the fairness here? You need to be fair….

    • Here’s a thought; you borrowed it, you pay it back.

      Why in the world do people vote Democrat? They gift their political cronies with lavish pensions (that we, the taxpayers, have to somehow pay for), then when the tuition costs “necessarily skyrocket,” it’s up to we the taxpayer to somehow pay for that, too?

      Get this; there isn’t (and never will be) enough money to tax to pay for all this spending. Federal spending is passing even our GDP, how long do you expect we can keep doing this?

      None of that matters as long as you get yours, right?

    • You’re right. I’m all about fairness. If you have “subsidized” student loans, how about the Fed goes back in and tacks on the interest that was covered by taxpayers, after all, it was you who borrowed the money not the taxpayers, it doesn’t seem “fair” to saddle them with interest that accrued because you made a bad decision about your major.

      Tell you what, how about this. Universities are the prime beneficiaries of government grants and ever rising government tolerance on loan subsidies and guarantees and they’ve increased their tuition at a dollar for dollar ratio with government largesse. The vast majority of those tuition increases don’t go to academics either, they go to increased administration. So, here’s what you do. Run down to Goldberg & Osborne and see if they’d like to initiate a lawsuit on your behalf against your university. If anybody is complicit in your bad decisions and bad results it’s them, not the commenters here, or the taxpayers, and make sure they don’t just sue the “university”, go after the administrators and professors personally.

      Have a nice day.

  2. The government has no money to forgive student loan debt. TAXPAYERS will end up funding governmental student loan debt forgiveness. They will not care about or listen to stories of people like you (except during campaign season, when it makes a good anecdote for a speech), they will pay out millions — billions — to people who provide the right numbers and can fill out the paperwork.

    That means that your taxes will go up. My taxes will go up. Everyone’s taxes will go up, and school will become even more expensive, because now students can afford anything! They just need to endure 10 years of payments, and the government will take care of the rest! Who cares how much school costs? Why get scholarships?

    It’s not foolish to have gone to school and gotten an education. It’s not even really all that foolish to have student loan debt (goodness knows I and my husband have our share!).

    It IS foolish to believe that you can’t pay it off or that you are “going to drown in a lifetime of student debt” — and also that someone else should be responsible for it.

    When my husband and I got married and were making next to nothing, we were paying about $400/month on our loans. I’ve since consolidated disbursements, which allowed us to pay more on his loans and less on mine (which means we’ll be paying longer, but oh well). But if we were to fall into financial hardship, we could apply for forbearance or even lower payments, and the loan companies would totally help us out! That’s the great thing about private companies running the loan business. But we never had to, and we shouldn’t have to. Student loan debt is the least of our debt worries.

    We also don’t plan to pay for our children’s college. They can work or go to a cheaper school, or find a trade to apprentice in. We will help prepare them (from what we learned — or didn’t learn) for the scholarship and grant search. They will learn how to fund their own college, with maybe a little assistance from us when it’s necessary. That way, they will be much more likely to make a better career choice, and not spend their money getting an education in something they can learn from the library or the internet. (In other words, if they’re going to spend over $100K on their college education, it darn well better be for medicine, law, or a career field that requires that much education — and then they’d better be finding the grants to get them there).

    I’m also a big Dave Ramsey fan ( He has great advice about how to get out of debt and become financially stable, while learning how to budget and manage your money well. It goes against much of our entitlement society’s beliefs of “get it now, pay for it later”. You could check it out, if you’re worried about your finances. 🙂

    Fairness is not making other people pay for your choices. Fairness is other people helping you find solutions to your own problems. Fairness IS NOT other people paying for your choices or solving your problems with their resources. I think you’ll feel better about yourself when you understand that. 🙂

  3. @Cindie –

    I, too had thousands of dollars of student debt. I had to pay mine back regardless of what it cost me in other areas of my life. I, too, had food, shelter and other needs. I still had to pay my debts.

    You want this to be about fairness to those who have behaved responsibly and now find themselves in a tough place? That sounds so … fair …

    But life isn’t fair.

    Sometimes people who have been with a company for years get laid off without warning just after they bought a new home. No one should pay their mortgage …

    Sometimes wives who have faithfully stood by their man for years are divorced and left with debt and kids and little way to pay for it. No one should be paying for them …

    Sometimes Markets change and a business has just invested in all the wrong equipment and technology – like pagers at the advent of the cell phone explosion … no one should pay that business’s loans …

    Sometimes one buys into the story that a college education is the key to wealth, security and fortune. So people spend $100K on a degree in Women’s Studies from Ivy League schools and can’t find work in their field. Sometimes hundreds of graduates come out of school in a particular market or field and a flooded labor market means low wages and few jobs.

    Sometimes, sometimes, sometimes …

    The issue here is not what the Government should do or all of Americans should do collectively when the “sometimes” strikes. It’s all about what individuals do.

    I wish I could say I’ve never been late on a payment or been in collection for a legitimate debt. But I can’t. What I can say is that no one has ever lost a dime because I borrowed money from them. I’ve paid late fees, interests, fines, penalties and more. I worked two and three jobs, one year I worked almost 4,000 hours, to get out of the hole I had dug for myself – more accurately the holes I had dug.

    It didn’t happen overnight. It took years to accumulate those debts. It took years to repay them. I drug them into my marriage and burdened my wife with my financial foolishness.

    Did I wish I could make those debts disappear? Daily! But never by having the debt simply wiped away.

    Why? Because that would violate the very tenet upon which you are basing your entire argument … because that wouldn’t be fair … to the lender!

    This isn’t about fairness. It’s about who gets treated fairly. There’s a way that everyone is treated fairly … it’s called doing whatever you need to do to pay your debts.

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