“Predatory?” Let’s talk college loans.
What I’m about to share with you is true. I’m changing all of the names but the facts are real.
Let’s call the main character “Jack.”
Jack is set to graduate from a major private university in May. Jack’s mother and father are split and neither of them is of means. It is doubtful that Jack’s mother has even the wherewithal to get from where she lives to see Jack’s graduation. Jack is, for practical purposes, alone in the world.
Yet Jack, with the help of the financial aid office of his very well-known university, has been able to borrow enormous amounts of money to afford private university tuition and the sociology degree he will receive next month. The lender is the federal government.
Reality is starting to close in on Jack. He is beginning to realize that the employment prospects deriving from his degree are next to nil. Graduation is becoming a very frightening prospect to Jack.
Upon learning of Jack and his story, the question I asked was, “What in the world is he doing at Big Money U? Why did he go there?” And the simple answer is, ‘because Big Money U made it possible by encouraging and then facilitating irresponsible borrowing.’
Bank and mortgage company executives were called to testify before congressional committees for the “predatory lending ” (as it has been often characterized) that preceded the 2008 mortgage crisis. But if the pain and suffering attendant to the mortgage crisis was a case of “predatory lending,” then the practices attendant to student loans constitute nothing less than rapacious lending.
The proposition has always been that the cost of a college education is an investment that offers an excellent return in the form of higher lifetime earnings. But that was before the amount of money required for a college degree rose to the same level as that required to buy a decent house. It was before the time when any kid who could fog a mirror could borrow nearly limitless amounts of money with the help of the federal government. It was before the time that total student debt in the U.S. exceeded $1.1 trillion.
Saddling a 21-year old kid with what amounts to a mortgage before he or she has earned a dime in the real world is irresponsible. Compounding the felony by encouraging that young man or woman to pursue a squishy, socially-conscious, most likely left-leaning something-or-another-‘studies’ degree is absolutely cruel.
An ethical admissions counselor, rather than facilitate Jack’s plunge into unpayable debt, would have directed Jack toward a less expensive school or, at the very minimum, encouraged him to pursue a degree with stronger job prospects. That he or she did neither is a case of academic malpractice.
The most unscrupulous, most “predatory” mortgage lender imaginable could not be worse than the elite university admissions adviser who, caring nothing for what happens to Jack later, used him as a means to fill the university’s coffers with federal money.
When will we see that individual testifying before a congressional committee?