I write about law school debt, often and passionately, because at the end of the day there are real productive people who are getting ruined by taking out more money than they can reasonably pay back. Not all of these people are “deadbeats,” and not all of these people are too stupid to understand a loan agreement. Many of them are people who simply thought that in America education was the path to upward mobility.
But unfortunately, in America today, education is also the path towards financial instability, or even disaster. People who take the shot at bettering themselves through education can easily find themselves with bad jobs and a mountain of debt that will take decades to pay off.
It’s not just happening to kids. The New York Times had a big article yesterday that highlighted all of the parents who have taken loans out for their children’s education and now can’t pay off the loans. And since we’re talking about parents, we’re dealing with people who maybe don’t have decades to get their financial houses back in order.
In one shocking case, a man took his own life; in the suicide note, he said: “I can’t even answer the phone in my own home no more. I can’t live like this no more.”…
The New York Times brings us the story of Teresa Tosh, her son Jacob (who apparently has a different last name), and Teresa’s husband, George Tosh. Jacob took out $200,000 in federal loans to go to law school, and another $100,000 in private loans that his mother co-signed.
Jacob wasn’t able to pay off the loans because he couldn’t find a high-paying legal job, and the creditors starting calling him and his mother. Her husband, who I think somewhat obviously was probably already in some distress, didn’t handle the situation well:
George, a Vietnam veteran who worked from home, concluded that Jacob was lying about trying to work things out, deceiving Ms. Tosh, ruining her credit and leaving her holding the bag.
The household tension grew intense, and in July 2010, Mr. Tosh shot himself, leaving a note saying that he could no longer stand the incessant calls from Sallie Mae, one of the lenders.
“Jake has destroyed us. You can’t tell me that sally mae is getting paid when they keep calling all day, every day,” he said in a note to his wife. “I can’t even answer the phone in my own home no more. I can’t live like this no more.”
Ms. Tosh said she was “not naïve enough to think the Sallie Mae calls were the only reason” that her husband killed himself. “But they were adding a lot of stress,” she said. “They’d never stop calling.”
Again, this family didn’t borrow money from a loan shark to make big bets on the New York Jets. The family borrowed money from the government in order to send their kid to law school. Are we really okay with them being hounded like this? I’m not saying that debts are “responsible” for the decision of this man to take his own life. But if we’re going to live in a world where we’re worried about schoolyard bullies “causing” suicides, certainly we could do something about debt collectors hounding people to distraction.
And what about the law school? I don’t know where this Jacob got his degree from, but you don’t need to read Above the Law every day to know that borrowing $300,000 to go to law school is a colossally stupid idea. If a car company charged you $300K for a car that periodically blows up, the consumer protection agency would put a stop to it. But law schools are allowed to charge whatever they want for a product that periodically blows up the lives of the people who attend.
People who were just trying to get an education that they were told would lead to a good job and a good life.
Student debt isn’t just affecting deadbeats who shirk their responsibilities. It’s affecting a generation of young people — and their parents — who can’t even become productive consumers in this economy because they’re being price-gouged by institutions of higher learning.
Child’s Education, but Parents’ Crushing Loans [New York Times]