A Lannister Always Pays His Student Loans, and So Should You

Lee Siegel, cretin



Secretary of Education Arne Duncan announced a new wave of loan debt forgiveness Monday for students who attended Corinthian College, a much-maligned for-profit college company that declared bankruptcy after the government took an interest in its fraudulent practices.

It's easy to sympathize with the people—often low-income people—who were seduced by the promise of easy degrees that would yield higher-paying careers and took on massive debt in pursuit of that goal. Does that mean the government should bail them out—at a substantial cost (as much as $3.5 billion) to taxpayers? The New York Times spells out the arguments for and against:

Lauren Asher, president of the Institute for College Access and Success, praised the department's move. "It's important and it's new, and it means the department is recognizing that students defrauded by Corinthian and other unscrupulous for-profit colleges deserve relief."

But not everyone praised the plan.

"Students have been hurt, but the department is establishing a precedent that puts taxpayers on the hook for what a college may have done," said Senator Lamar Alexander, Republican of Tennessee, and chairman of the Health, Education, Labor and Pensions Committee.

"This is one more reason it was a bad idea to make the U.S. Department of Education the banker for students as well as the regulator of their colleges," he continued. "If your car is a lemon you don't sue the bank that made the auto loan; you sue the car company."

Given that the federal government already plays such a paramount role in the funding of higher education, I can understand why the Obama administration would reach this decision. But Alexander's criticism is spot-on: Why should taxpayers be punished for the mistakes of college debtors, even ones who truly were deceived?

A far-less sympathetic debtor, writer Lee Siegel, penned a Times op-ed a few days earlier tackling the same subject. But never mind forgiveness, or deceitful colleges: Spiegel advocates refusing to pay back loan debt willfully accrued in the course of attending elite colleges. This, in fact, is precisely what he did:

Years later, I found myself confronted with a choice that too many people have had to and will have to face. I could give up what had become my vocation (in my case, being a writer) and take a job that I didn't want in order to repay the huge debt I had accumulated in college and graduate school. Or I could take what I had been led to believe was both the morally and legally reprehensible step of defaulting on my student loans, which was the only way I could survive without wasting my life in a job that had nothing to do with my particular usefulness to society.

I chose life. That is to say, I defaulted on my student loans.

As difficult as it has been, I've never looked back. The millions of young people today, who collectively owe over $1 trillion in loans, may want to consider my example.

It struck me as absurd that one could amass crippling debt as a result, not of drug addiction or reckless borrowing and spending, but of going to college. Having opened a new life to me beyond my modest origins, the education system was now going to call in its chits and prevent me from pursuing that new life, simply because I had the misfortune of coming from modest origins.

Siegel's op-ed has drawn considerable outrage—all of it deserved. The Washington Free Beacon called him a "sociopath." Slate's Jordan Weisssmann lamented that his advice was financially ruinous:

But tone-deafness is the least of Siegel's sins, in this case. The much bigger problem, and the reason the Times owes the world a mea culpa in my opinion, is that he spends about a third of the column dispatching criminally negligent financial advice. …

Astoundingly, Siegel never mentions, nor demonstrates that he understands, the fact that in most cases of default the government can simply start garnishing up to 15 percent of borrowers' disposable wages directly from their paychecks. That's more than the 10 percent they would owe if they simply signed up for the newest income-based repayment plan that the Department of Education offers. In other words, unless you're making a political statement like the debt strikers, there is virtually no rational reason to default.

Nevertheless, Siegel wonders if more debtors should follow his lead and refuse to repay the government (i.e., us). Deeply selfish thinking undergirds this philosophy, which amounts to little more than "I want a pony!" when stripped of its liberal pretensions about the intangible worth of a college education. The reason student loan debt is not generally dischargeable through bankruptcy is because college students are a risky investment—far riskier than the people who typically qualify for bank loans. Many students who attend college on a loan don't graduate. Others graduate but don't find jobs that draw salaries to justify the expense. Many default. The correlation between attending college—an increasingly expensive proposition—and becoming a highly-compensated, stable, successful individual is still strong, but by no means automatic.

College should be more affordable—and it would be more affordable if the government wasn't obscuring the true, hideous cost by paying it upfront and sticking students with the bill later. Refusing to pay back the loans is not a serious solution to this problem, and is extremely harmful to both debtors and taxpayers.