You might remember Matt Taibbi from such hits as “F@$% Goldman Sachs” and “Wall Street Trades Soylent Green.” He is a blistering critic of… everything.
In an upcoming Rolling Stone article, Taibbi has turned his withering gaze to the student loan industry. He criticizes Democrats, Republicans, and President Obama. Taibbi points out Obama’s hypocrisy on the student loan issue, something that I’ve been doing since 2009, but on this issue, the more the merrier.
While Taibbi’s article focuses on the crisis as it applies to college students, he can’t help but include some examples from the legal industry. I think that’s because no matter how much colleges and universities take advantage of college kids, law schools are worse….
Here’s the ending to Taibbi’s piece. Note how he finishes up by talking about a law school graduate:
We’re doing the worst thing people can do: lying to our young. Nobody, not even this president, who was swept to victory in large part by the raw enthusiasm of college kids, has the stones to tell the truth: that a lot of them will end up being pawns in a predatory con game designed to extract the equivalent of home-mortgage commitment from 17-year-olds dreaming of impossible careers as nautical archaeologists or orchestra conductors. One former law student I contacted for this story had a nervous breakdown while struggling to pay off six-figure debt. It wasn’t until he tapped into one of the few growth industries open to young Americans that his outlook brightened. “I got my life back on track by working for a marijuana delivery service in Manhattan,” he says. “I’ve had to compromise who I am . . . because I started down a path that I couldn’t turn away from. Student loans aren’t hope. They’re despair.”
When I talk to others who are interested in the student loan bubble for higher education, I try to explain why law school is the worst offender. Colleges soak up much of what little press there is, because college loans affect vastly more people. But where do you think many of these would-be “nautical archaeologists” end up once they realize Sea World isn’t hiring?
Most people who borrow money for a useless college degree aren’t going to medical school. They haven’t done the preparation in college to get into med school. They’re not going to business school because they don’t think that they have business sense and it sounds too much like math. And after spending four years and graduating with limited job prospects, many of them are loathe to spend an additional five to seven (or more) years getting a Ph.D. in a specialty that qualifies them to teach and end up in school for the rest of their lives (if they’re lucky enough to find an academic job).
Law school becomes the “what else are you going to do” option. It has shockingly low barriers to entry: just take the LSAT and apply. It’s relatively short (compared to a Ph.D. program). And law school deans live to promise people marketable skills and employment options. How many times have your heard “you can do anything with a law degree.” And if you don’t understand the bi-modal salary distribution curve, law school looks like pretty much the only thing you can do to pay back your debts — not just your law school debts, but the debts you already have from four years studying nautical archaeology.
If college debt is The Pit (the prison in the latest Batman movie), then law schools are the stairs that give prisoners a false sense of hope that they can climb out of the hole and back to financial security. “There can be no true despair without hope.” Which is what Taibbi’s pot-delivering subject was trying to say.
In any event, there is more than enough blame to go around, and Taibbi blames everybody:
There are powerful reasons for both the left and the right to be willfully blind to the root problem. Democrats — who, incidentally, receive at least twice as much money from the education lobby as Republicans — like to see the raging river of free-flowing student loans as a triumph of educational access. Any suggestion that saddling befuddled youngsters with tens of thousands of dollars in school debts is somehow harmful or counterproductive to society is often swiftly shot down by politicians or industry insiders as an anti-student position. The idea that limitless government credit might be at least enabling high education costs tends to be derisively described as the “Bennett hypothesis,” since right-wing moralist and notorious gambler/dick/hypocrite Bill Bennett once touted the same idea.
“It is wrong to suggest that student aid is a cause for growing college costs, in any sector,” David Warren, president of the National Association of Independent Colleges and Universities, wrote in The Washington Post last year, bemoaning the “re-emergence” of the Bennett theory. “To argue so is counterproductive to the goal of making higher education accessible and affordable.”
Conservatives, meanwhile, with their usual “Fuck everybody who complains about anything unless it’s us” mentality, tend to portray the student-loan “problem” as a bunch of spoiled, irresponsible losers who are simply whining about having to pay back money they borrowed with their eyes wide open. When Yale and Penn recently began suing students who were defaulting on their federal Perkins loans, a Cato Institute analyst named Neal McCluskey pretty much summed up the conservative take. “You could take a job at Subway or wherever to pay the bills,” he said. “It seems like basic responsibility to me.”
In fairness to McCluskey (whom I’ve met), he thinks that the government should completely get out of the student loan business. Increasingly, I’m forced to agree with him. Despite my progressive instincts jerking me in the opposite direction, it seems to me that the people in charge of educating young people are too greedy and untrustworthy to be trusted with unlimited government credit.
Obviously, I think that student loans should be able to be discharged through bankruptcy without needing to show undue hardship. And I think that the Department of Education should seriously look at regulatory oversight over the price of higher education instead of just focusing on K-12 issues. But I just don’t know how this problem gets fixed so long as schools can charge whatever they want and students can just borrow the money. Schools have no incentive to compete on price when the government guarantees loans taken out by their students.
My kid will be one year old next month. When he’s 18, I can’t imagine we’ll still have a system of financing college education that is based on guaranteed government loans to universities who can charge whatever they want. I just don’t know how many more students we will hobble between now and then.
Ripping Off Young America: The College-Loan Scandal [Rolling Stone]