Let’s say that instead of taking on huge debts while I was in law school, I had taken up a wicked cocaine habit. Let’s say I had done loads and loads of blow from 2000 to 2007 and then went into a 12-step program. If I had been lucky enough to avoid an overdose or jail, you could argue that things would be better for me right now — even if I had a really serious cocaine problem where I spent my all my disposable income on the drug, and even if I put a good job and a good marriage straight up my nose. If I had been through all that and then wrote an essay about the highs and the lows of doing cocaine throughout my legal career, if I was telling kids that they could overcome a wicked cocaine habit even though the consequences were severe, if I was truthfully telling people that even though I’m trying to stay clean and sober now I’m not “ashamed” of my past life, I’d have nearly everybody in my corner.
Instead, I didn’t have a cocaine habit in law school and beyond. I defaulted on my student debts.
Really, the smart thing to do would have been to default on all my loans, then blame it on the cocaine that I was “powerless” to stop. But instead of playing the victim, I marshaled what autonomous power I had and chose not to pay back my loans in a timely manner. I decided to go down on my own terms, not the terms set out for me in a promissory note.
That seems to be what has really pissed everybody off…
I chose the cocaine thought experiment on purpose. If I had done all that coke and law and been a cute little white girl who also enjoyed lots of sex too, I’d have a multi-book deal and famous attorneys desperate to hire me.
Sadly, I’m not a pretty little white girl and, dumbass that I am, I didn’t do any cocaine in law school. Instead, I’m an overweight, surly black guy who borrowed a bunch of money and didn’t pay it back in a timely manner. I don’t have a book deal; instead, I’ve got Megan McArdle in the Atlantic analogizing my behavior to stealing from Macy’s.
Which is fine. Because at the end of the day, I’m the guy who wants prospective law students to understand that taking out a huge amount of money in educational debt isn’t always the right choice. I’m the guy who thinks recreational drug use for three years might be an economically intelligent alternative to three years of law school at today’s prices.
I’m the guy who wants everybody to see the reactions from the Megan McArdles of the world — and think about that before they sign up for three years of post-graduate education simply because they can’t think of anything better to do.
Since my last response to McArdle, she’s written three posts about defaulting on student debts. The first one misspelled my name and involves her once again questioning whether anybody has ever been able to settle their student loans for significantly less than the principal. I don’t know how many ways I can say yes to this question. My collection agency has offered me a deal for 35% of the principal (which is still about three times more than I can afford). A close friend of mine recently settled hers for just over 30% of the remaining principal. I don’t know what else to tell you.
Her second post on the subject focuses on the moral obligation one has to pay back their debts. And her third post, incredibly, tries to draw a parallel between defaulting on your educational debts and stealing from Macy’s.
I’ve never stolen anything from Macy’s, and I’m assuming McArdle hasn’t either. But I wouldn’t be surprised if McArdle ever bought something from Macy’s… and then returned it. Hey, if she really was a girl living in NYC on $40K a year while owing over $100,000 that she was diligently paying off, I’d bet McArdle has (or knows somebody who has) bought something from Macy’s, worn it once, and then returned it.
Of course, Macy’s runs like most things in America. They sell you something, and if you don’t like it or it doesn’t work out the way you expected it to, then you can take it back and get your money back. That’s how consumerism is supposed to work.
But I can’t give my student loans back, can I? I can’t throw up my hands and say, “Whoa, actually I have no desire to be a lawyer, here’s the J.D., can I have my money back?” Hell, I can’t even trade it in for store credit. I can’t say: “Hey, can we put that $150K towards a Ph.D? Or better yet, can I instead use that as seed money to start my own business? It turns out somebody else in my family got the J.D. package; we don’t need two.”
No, student debt is one of those things from which there is no escape, no return policy, no opportunity to say, “Wait, this was not at all what I thought I was signing up for.”
Don’t get me wrong, there are a lot of people who know exactly what they are doing when they sign up for student loans. I applaud those people. I envy those people. I am trying to become one of those people. When I put $0 into my 401K (’cause I’m using that cash to make monthly debt payments), I think, “Wow, this might really screw me later.” Trust me, that’s a huge improvement over what I knew when I was waiting for my financial aid non-scholarship “award.”
At 22 years old, when I was signing all the papers and contracts that would result in me graduating with more $150K in educational debt, I didn’t really know what I was doing. Maybe I should have. A smarter 22-year-old would have, but unfortunately, I made a series of poor decisions during my 22nd year on the planet. Here are just a few of them:
* I decided to attend Harvard Law School instead of Yale Law School — despite Yale being smaller, more prestigious, more liberal, and less grade-obsessed.
* I rented an apartment that had exposed electrical wire in the only room of the house that needs water to function, the bathroom.
* I bought a used Cadillac which ran beautifully, but you had to “pump the brakes” because the brakes wouldn’t always “catch” on the first try.
* I did the Century Club on a rooftop on a foggy night where the bathroom was the ledge of the roof.
* I accompanied a white friend to his confrontation with a random black dude who my idiot friend bought oregano from, thinking it was something else.
* Oh, and I filled out a bunch of forms that said something about me owing more money than I had ever seen before at some distant point in the future when I assumed I’d be old and responsible.
You know which one of those decisions I spent the most time thinking about, researching, and considering all available options? Of course it was the car.
You know who the first person was to sit me down and really talk to me about the seriousness of my debt exposure and the years of hard work I was going to have to put in to even begin to pay them off? A partner from my law firm, during the dinner my firm was having to convince me and others to accept their summer associate offers. That’s right, the first time an adult even attempted to explain to me what I had done to my future happened 18 months after I’d done it and as part of his attempt to sell me on being an indentured servant to my debt at his firm instead of somebody else’s.
The second serious conversation I had about my debt load was during my exit interview for law school a week before I graduated.
I’ve had to jump through more hoops to purchase a cell phone! I can’t smoke a cigarette in the park without the government stepping in to “save” me from my own choices. But I went from a happy college graduate to a person who will be in debt for the rest of his life on the advice and counsel of a form and two conversations over a three-year period.
Excuse me if I feel like my creditors maybe took advantage of me and my admitted stupidity, just a little bit. Excuse me if, when I list the things that are important to me in my life, paying these particular people back isn’t exactly on my top ten list of things that determine my moral citizenship. The moral difference between the student loan industry and racketeering is what, exactly?
Well, when you default on your debts to the mob, they send people like Paulie Gualtieri after you. When you default on your student debts, they send people like Megan McArdle after you. People who will tell you it’s “immoral,” people who will tell you to be afraid, people who know that white-knuckle fear is enough to keep most people following most of the rules most of the time.
But, as most of you know, manatees are the only mammals that are completely unmoved by terrorist threats. I don’t expect McArdle to understand this, but you people who have actually been in one of these Biglaw jobs will understand what I’m talking: by the end, there was no amount of money my law firm could have paid me to stay. America could have been taken over by a fascist government and I could have been ordered to work at the firm, and I would have Von Trapp-ed my family over the Catskills into Canada. I know so many of you know what I’m talking about: when you are done with the particular job of being a Biglaw associate, you are D-O-N-E.
So here’s my question. How come in Megan McArdle’s world, it’s perfectly okay for my creditors to figure how best to take advantage of me (and thousands of ignorant twenty-somethings every year) in a way that maximizes their profit, but it’s not okay for me to grow a brain and figure out a way to (temporarily) take advantage of them for my own rational self-interest? How come it’s okay for my creditor to sell their bad investment in me to whoever will buy, but I can’t sell my bad investment in legal education to anybody, forever, even if I declare bankruptcy? How come their actions are somehow amoral, while my actions are immoral?
I didn’t steal anything. I entered into a contract I could not perform. I am paying the consequences for that non-performance, and unless something extraordinary happens, I’ll be paying those consequences for the rest of my life. All I’ve been saying since the start of this series of posts is that these consequences are survivable, and for me at least, preferable to spending years and years as an indentured servant to your debts.
Of course, if I had to it do all over again, I’d know that cocaine or alcohol addiction is much easier to get out from under. Think about it: Obama had a mass of educational debt, and he had to write a best-selling book to pay it off. Bush had an alcohol problem, and all he had to do was “find Jesus” to move on from that.
But then again, Jesus just died for sins. He didn’t say anything about absolving people from their debts.