Accuracy Matters When Speaking about Student Debt: By: Karen Gross (Originally published on June 13, 2015)
In a recent op-ed in the NYTimes and on television, Lee Siegel made the following assertions among others (as reported): (1) He has defaulted on his student loan intentionally (so he could have a career of choice); (2) Other students, by inference, should do as he did (what's the harm, he says?); (3) Companies get to file bankruptcy but students cannot discharge debt in bankruptcy (and say he, wrongly, that is the only non-dischargeable debt. http://huff.to/1KOhJ5t. http://www.nytimes.com/2015/06/07/opinion/sunday/why-i-defaulted-on-my-student-loans.html.
At first, I thought he was tongue in cheek. Apparently not. And true, money does not grow on trees.
I'm sorry. But it is not responsible to be so irresponsible. For starters, I don't think the NYTimes was wise in publishing this piece. Why encourage bad behavior? Yes, student debt loads are an issue -- a very real issue and one as to which there is rising and well-deserved attention. But defaulting -- with pride -- is not the solution.
There are some solutions now (IBR is one); there is also an effort to change the laws (look at proposals by Senators Warren and Sanders). There are student boycotts when warranted -- as is the case with Corinthian Colleges that closed schools and apparently misrepresented facts to students. Hardly the case for Mr. Siegel. In fact, there is a statute permuting the Department of ED to eliminate loans when a college closes or there is fraud. Defaulting to promote a career is not in the law!
But, Mr. Siegel is so wrong about bankruptcy that is offensive. For starters, student debts are generally non-dischargeable. But they are dischargeable in the event of undue hardship (an undefined concept but still an option in egregious situations). There is movement afoot to change the law here too -- a good idea by the by. OK, unlikely in this Congress but still.
But, look at Section 523((a) of the Bankruptcy Code. There are 19 listed debts that are non-dischargeable if the standards are met. Nineteen. Take alimony and child support as examples. Take fraud as another. These apply to individuals who seek relief. Whether and how corporations emerge from their legal liabilities is a different question. But, we need to get our facts right.
Here's a fact. Defaulting on federal student loans is not a cost-free transaction. It costs the Government. And it costs the individual. Now, if student loans are repaid, there is arguably more money for Pell grants and other educational programs. Acting as a lone ranger here is not what it appears; there are consequences. And, in today's economy, by the by, employers are asking for credit reports and credit scores. Sure you can say no but.... And as to the need for marrying rich, I leave that to others for commentary on that.
The advice we give to people matters -- whether we are educators or lawyers or doctors or journalists or authors. Unless we are writing fiction, which Mr. Siegel's piece was not, he needs to be accurate and the NYTimes needs to fact check too and consider the consequences of what this piece calls for in terms of student/graduate behavior.
One more option: Mr. Siegel could rectify this wrong in one of several ways. Yes, he could repay the loan with interest and penalties. Unlikely. He could calculate that amount and donate it to an educational organization where the money will benefit low income kids (not Harvard). Unlikely. Or, he could donate the proceeds from his prospective book on money to a worthy cause. Also, unlikely. Obviously, he does not care and is happy with his choices -- both legally and morally. I do not share his position, of that I am sure.
To read more of Karen Gross' articles click here!
In a recent op-ed in the NYTimes and on television, Lee Siegel made the following assertions among others (as reported): (1) He has defaulted on his student loan intentionally (so he could have a career of choice); (2) Other students, by inference, should do as he did (what's the harm, he says?); (3) Companies get to file bankruptcy but students cannot discharge debt in bankruptcy (and say he, wrongly, that is the only non-dischargeable debt. http://huff.to/1KOhJ5t. http://www.nytimes.com/2015/06/07/opinion/sunday/why-i-defaulted-on-my-student-loans.html.
At first, I thought he was tongue in cheek. Apparently not. And true, money does not grow on trees.
I'm sorry. But it is not responsible to be so irresponsible. For starters, I don't think the NYTimes was wise in publishing this piece. Why encourage bad behavior? Yes, student debt loads are an issue -- a very real issue and one as to which there is rising and well-deserved attention. But defaulting -- with pride -- is not the solution.
There are some solutions now (IBR is one); there is also an effort to change the laws (look at proposals by Senators Warren and Sanders). There are student boycotts when warranted -- as is the case with Corinthian Colleges that closed schools and apparently misrepresented facts to students. Hardly the case for Mr. Siegel. In fact, there is a statute permuting the Department of ED to eliminate loans when a college closes or there is fraud. Defaulting to promote a career is not in the law!
But, Mr. Siegel is so wrong about bankruptcy that is offensive. For starters, student debts are generally non-dischargeable. But they are dischargeable in the event of undue hardship (an undefined concept but still an option in egregious situations). There is movement afoot to change the law here too -- a good idea by the by. OK, unlikely in this Congress but still.
But, look at Section 523((a) of the Bankruptcy Code. There are 19 listed debts that are non-dischargeable if the standards are met. Nineteen. Take alimony and child support as examples. Take fraud as another. These apply to individuals who seek relief. Whether and how corporations emerge from their legal liabilities is a different question. But, we need to get our facts right.
Here's a fact. Defaulting on federal student loans is not a cost-free transaction. It costs the Government. And it costs the individual. Now, if student loans are repaid, there is arguably more money for Pell grants and other educational programs. Acting as a lone ranger here is not what it appears; there are consequences. And, in today's economy, by the by, employers are asking for credit reports and credit scores. Sure you can say no but.... And as to the need for marrying rich, I leave that to others for commentary on that.
The advice we give to people matters -- whether we are educators or lawyers or doctors or journalists or authors. Unless we are writing fiction, which Mr. Siegel's piece was not, he needs to be accurate and the NYTimes needs to fact check too and consider the consequences of what this piece calls for in terms of student/graduate behavior.
One more option: Mr. Siegel could rectify this wrong in one of several ways. Yes, he could repay the loan with interest and penalties. Unlikely. He could calculate that amount and donate it to an educational organization where the money will benefit low income kids (not Harvard). Unlikely. Or, he could donate the proceeds from his prospective book on money to a worthy cause. Also, unlikely. Obviously, he does not care and is happy with his choices -- both legally and morally. I do not share his position, of that I am sure.
To read more of Karen Gross' articles click here!