Hey! Randy

Continuing the Conversation

Posted by heyrandy on December 7, 2011

The other day I talked with someone about student loan debt. The several readers of this blog know that I think student loan debt is a bad idea. When I mentioned that I had heard about someone with $120,000 debt incurred while obtaining a liberal arts degree from a prestige university but was now in a low paying job, the person said, “He won’t stay there.” I let the matter drop. But I thought that I would pretend the conversation continued.

Me: Actually, he probably will always be in low-level jobs.

He: Why? Surely anyone smart enough to graduate with a degree from a prestige school will advance.

Me: These days companies are doing credit report checks on applicants. This person’s credit report will be a disaster. Do the math. To pay the loan off in 30 years he will need $333 a month in just principle. There is probably an on-line site where you can calculate this with interest. If not, your bank’s mortgage department can. This debt is like a mortgage without the house or tax deduction. He cannot make this large a payment on his pay. He will go into default. This will sink his credit score. It’s low-level jobs forever.

He: Wait a minute while I work the IBerryPadReaderFirestarter. There, I found one. http://www.interest.com/mortgage/calculators/mortgage-calculator/

Me: How did you do that? I am writing this blog.

He: So am I. It is internet magic. The same person can be two people. I can’t explain it.

Me: Neither can I. They did not teach it in school. That is what I get for going to school before the Algore invented the internet.

He: How will this affect his future? What can he do?

Me: The Algore’s? Not at all. He is cleaning up with the global warming scam. The guy sure knows how to work a con. The debtor? Work two jobs, live at home, eat rice. Maybe he will lose weight. Dandelions are edible. He could munch a few while he does that yard work on the side for cash.

He: You make this sound hopeless.

Me: It is. He is a fly trapped in the spider’s web of debt. He is at the banks’ mercy. They are not in the mercy business. There is no profit there. They are               about profits. He has only one out.

He: What is that?

Me: Marry someone who is as smart as he is but rich.

He: That is silly.

Me: True. Most people who are as smart as he is are not rich.

He: Could he declare bankruptcy? Surely that would erase the debt.

Me: Yes, he could; but that won’t erase the debt. The banks had the law written so that student loan debt is not affected by bankruptcy. That is why the banks like student loans. I don’t know what they think of the students. They are smart enough not to say publicly. It’s bad for business.

He: It seems so unfair.

Me: Life’s …

He: I know, I know. Is there a better way to get an education than to go into such debt.

Me: There is. First, it’s schooling that is expensive; education is cheap, even free. This guy is getting a real education now. Second, when you think school, think cheap. Why shop at Hiprice when Walmart will sell you the same stuff for a lot less. You can even beat Walmart by shopping on-line. A lot of people who manage Walmart have degrees from Prestige. They did not see the internet as a threat. This tells you a lot about a lot. Do a cost of value study. This is a college level assignment without the credit hours. Do not fail this coarse. Is Prestige U really a better value, is it that much better, than Southwest East Central State? If it is, does it justify the cost? Third, you do not have to spend four years at Prestige to graduate from there. Do the local community college for two years. You save on tuition and living costs. Transfer your credits to Prestige and get your degree for half the price. The same agency certifies both schools. This means that accreditation-wise Harvard’s degree is just as good as one from U Mass. Inthewoods. Is that one word difference on the diploma worth what you paid? Fourthly, and lastly because I am beginning to run out of numbers, get a job in your field of study and learn from the inside. This way your boss pays you to learn. Some companies will even pay your tuition. This guy followed the herd. Too bad they were all lemmings.

He: Mass Inthewoods is two words. Shouldn’t that be course? I have heard that lemmings do not….

Me: Yes, You are an educated person, degreed even. I put that in there so you could get some value. If the lemmings don’t like it, have them sue me. They lost the last time.

He: Can’t this guy get a lawyer and have the lawyer do something.

Me: I am sure he could find a lawyer. Remember, the banks have lawyers too. When this guy goes into default he will find out about this. The banks did not have the laws written in their favor for no reason. The banks will pursue legal action against any debtor who is in default. I imagine it will resemble a pack of wolves ….

He: What can the banks do those who default?

Me: I don’t know. I am not a lupine lawyer.

He: His future is bleak.

Me: Especially bleak when you consider the non-financial effects. He is unlikely to marry. He will never be able to borrow money. (This is not a bad thing. But he will be paying cash for the clunker he drives.) He is going to get to take close care of his parents so he can save on the rent. He will be creative about hiding money from the collectors. He will configure his taxes so he always has to pay. This will deprive the government(s) of the free loan many people give them. (Tax refunds go to the loan holders. The banks got their money’s worth from their campaign contributions.) He will return his empties. Actually, he will return others people’s. He probably won’t have too many of his own. Water is cheaper and more healthful. It will help get the rice down. I can already imagine the decrease in litter. I don’t want to think about his health.

He: What is his hope?

Me: Hyperinflation of the currency. It will help all debtors but destroy the lenders.

He: He wins, the banks die. Is that so bad?

Me: You die, I die too. That is bad.

He: How likely is hyperinflation?

Me: The answer is in the bottom of you tea-cup. I drink coffee. That is my excuse, and I am sticking to it.

He: That line is tired.

Me: So am I. Good night.

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