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Bailout not Handout

10 Jun

Since the economic downturn I have tried to not become overly bitter about the mismanagement of our funds. Whether you blame it on a person, an administration, or whatever, there’s nothing we can do to change what has already happened. However, what continues to give me pause is how the individuals most impacted by the fallout have continued to be punished. While Wall Street and others still got their golden or even silver parachutes, the American people still continue to foot the bill. I try not to watch too much of the news. What I mean is that I like to filter my news by picking what I want to read about rather by being continually inundated with the reality of the human condition. However, it’s virtually impossible to ignore the continuous financial shortfall for those of us living on Main Street, USA. Despite an improving unemployment rate, so many Americans are still in need of some sort of government assistance.

Let’s talk about student loans. President Obama has said, “higher education cannot be a luxury…it’s an economic imperative.” On those points, I agree. I think that as a country all of our citizens should be provided with the opportunity to better themselves and our economy. There is no major downside to becoming a more educated population. Whether you want to achieve this through learning a trade or by continuing education, I firmly believe that doing so is a right and not a privilege. The issue, the one that many Americans live with every day, is that college has turned out to be among the worse decisions they’ve made.

To clarify, the pursuit of education and active learning is a great thing. The realities of the path most Americans must take in order to receive that education is not. The title of a May 2015 Wall Street Journal article sums up the quandary of higher education in the United States, “Congratulations, Class of 2015. You’re the Most Indebted Ever (For Now).” The article continues to outline just how bad the student loan debt issue is. “Almost 71% of bachelor’s degree recipients will graduate with a student loan, compared with less than half two decades ago and about 64% 10 years ago.” Statistics still show that it is most beneficial to be college educated, however, those very same statistics paint a terrifying picture of what many Americans do in order to receive their educations.

This year the average debt per borrower is over $35,000. My own personal student loan debt is over 3 times that amount. Yes, I did earn multiple Masters degrees, but if I’ve learned anything from the entire experience, it’s that I was completely stupid in my logic for accepting the maximum amount on all my loans. Here’s the thing, getting a student loan is remarkably easy and the temptation of its lump sum distributions per semester is alluring. It’s only natural for anyone in their late teens and early twenties to fall victim to the trap. Indeed, it’s a trap, one that you’ll likely spend the rest of your life paying for. It is also one that you’re reminded of every day that you’re out of a job, are in a low-paying job or when you are trying to become debt-free.

Just say no. It’s been over a decade since I took out my first of many student loans. Despite all the reasons I gave for doing so, they were all excuses. I think that we all feel the pressure of finishing school in the standard amount of time. We want to avoid the stigma and the questions we receive if it takes us more than four years to finish a bachelor’s degree. However, if we’re smart about it, we would take things a lot more slowly. As we enter college we’re beginning our first real steps into adulthood. Giving a student loan to someone in that phase of their life is like buying your 16-year-old a brand new Lexus and and then only telling them to be safe as you hand over the keys to the car. It just isn’t wise. More should and could be done to change the societal views on the real cost of student loans. It’s about so much more than the money. Taking out student loans is a life decision, often made at a young age, that can and most likely will impact your life far longer than any one thing should.

While those who were responsible for the worst financial crisis in this country’s history since the Great Depression of the 1930s were able to walk away relatively unscathed, every day people seeking reform and relief from the government must resort to petitions that seem to go no where and a government who are indifferent to the plight of its own people. The problems surrounding the culture of student loans persisted long before the financial crisis, but it is one of the many things that are now shown in a new light since then.

This article appeared on page 5A in the 6/10/15 issue of The Union-Recorder under the title A Bailout Not a Handout.

 
 

3 responses to “Bailout not Handout

  1. manuchettan

    June 16, 2015 at 1:16 AM

    For the purpose of loan, your view must me – how much can I generate post-degree, and how long will it take to break-even? If it takes too long vis-a-vis the projected earnings, I think it is better not to go for a loan.

     
    • LaToya M. Davidson-Perez

      June 23, 2015 at 3:46 PM

      Exactly. In most cases it’s just not worth getting the loan. I suppose it can’t really be helped in the cases of medical doctors and those in that field and others that are almost guaranteed to be in a high income bracket upon completion. However, as much as I like the degrees that I have, I’d much rather be debt-free.

       
      • manuchettan

        June 24, 2015 at 1:32 AM

        I couldn’t agree more. Wishing you a faster recovery (from debt). 🙂

         

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