The Three Roads

The book I’m supposed to be plotting resembles a vast desert sprinkled with various artifacts — a couple of characters here, some dialogue over there, an enchanted swan in the distance — with nothing but echoing emptiness between. The part of my mind that’s supposed to be dedicated to writing seems to be skittering merrily around, pulling up bits of old stories and chattering about current events. Hence this irrelevant and probably unimportant meditation on Thomas the Rhymer, the Wise and Foolish Virgins, and what I am reliably assured is a college loan crisis.

My favorite bit of Thomas the Rhymer is where the Queen of Elfland points out the three roads to him:

“O see ye not yon narrow road,
So thick beset with thorns and briers?
That is the path of righteousness,
Though after it but few enquires.
“And see ye not that braid braid road,
That lies across that lily leven?
That is the path of wickedness,
Though some call it the road to heaven.
“And see ye not that bonny road,
That winds about the fernie brae?
That is the road to fair Elfland,
Where thou and I this night maun gae.”

I’m not happy with the notion that many recent college graduates are struggling with a debt burden that may preclude their ever achieving financial security or buying a house. Who could be? And it’s all very well to say, “They shouldn’t have made the stupid decision to go hundreds of thousand dollars into debt just so they could get a degree in international ecological puppet theater studies.” Eighteen-year-olds make bad decisions, and this crop of kids had a lot of helpers leading them down the braid, braid road; government, banks, and college administrators, for a start. Perhaps those of us who were always, from the beginning, committed to the bonnie road to fair Elfland should not be too critical.

But I’m equally uncomfortable with the idea of wiping out those debts by fiat. Doesn’t that effectively mean that the losses will be made good by people who had nothing to do with the original bad bargain? People who decided to settle for a college they could afford, or decided they didn’t need to go to college at the current prices? People who majored in a subject that would lead to a decent job after graduation even if being an accountant hadn’t been a lifelong dream, and pursued their interest in astrological divination studies only as a spare-time hobby? Or the overwhelming majority of taxpayers for whom the question never even came up?

It’s as if Jesus had commanded the wise virgins to fork over half their supplies of oil to light the lamps of the foolish virgins.

So… what is appropriate to do? Is there any way to help the kids who made dumb decisions without penalizing those who were more responsible?


  1. Maybe there could be some kind of public service that people could do in their spare time, like Habitat for Humanity, and there could be debt-forgiveness associated with the service. Don’t make it too easy or too onerous, and make it something that people can still do if they work at odd hours or have to move to another town at short notice.

    Of course, it would have to be something that wouldn’t take bread out of anybody’s mouth.

    1. There is a program for loan forgiveness for “public service” providers (teachers, firefighters, nurses, etc.).

      However… it requires 120 straight on-time payments on the loans before the remainder is forgiven – which, for those right out of college, means the loans are essentially paid off; maybe a couple thousand gets forgiven (ten years from now, when it is worth much less than right now).

      Surprise! Even that program is seriously mis-managed by the Department of Education. There’s a lawsuit going on now…

  2. How about going after college endowments? There is some serious money in some of them. How about insisting that a college with grads in debt has to cut the position of some administrator and devote the saved salary to paying some student’s debts. An administrator with a salary of … 150,000 …. You could get a student to two out of trouble every year.

    I know. I’m laughing hysterically too.

    1. How about taking $10K off of every Congress-critter’s annual salary? That’s another half a million…

      (Yes, I am quite aware that I am being horribly racist by suggesting this. AOC might have to move again, and decide whether she can give up the private gym or the spa when looking for her new digs.)

  3. this crop of kids had a lot of helpers leading them down the braid, braid road; government, banks, and college administrators, for a start.

    And of course the “debt forgiveness” programs let these bad actors off the hook as well, the college administrators in particular. They’ve already got the money of the current generation and wouldn’t be required to give it back, and the “forgiveness” program says to the next generation of suckers students, “Yeah, go ahead and borrow the millions required to pay our ever-rising tuition and just hand it over. You won’t actually have to pay it back.”

  4. Fortuantely, the loans largely came from the Federal government, meaning the government simply printed the money. Cancelling the loans means that the money, which is already in circulation, will simply stay in circulation.

    Even well-endowed schools, except a very few, derive only a small part of their income from their endowments.

    Cancelling those loans will have dramatic political effects, namely the part of the population that did not get them will tend to go ballistic.

  5. Part of the problem is that colleges and universities aren’t on the hook for the loans. Right now, both students and colleges are encouraged to see these loans as free money — the colleges even more than the students, since they pay no price if the student obtains a worthless degree or washes out entirely.

    I suspect if colleges stood to lose when a student defaulted on a student loan, they’d take steps to guide students into majors that had at least some chance of leading to a career that paid enough to pay back that money.

    1. What?!? You think allowing free market forces to act on the problem, instead of insulating all involved from the natural consequences, would help? What a radical idea.

  6. Making student loans subject to the bankruptcy laws would cut the number of future bad loans.

    Making the universities the kids graduated from responsible for half the original principal of loans in bankruptcy might make them a bit less cavalier with their advice to the students.

    Tax credits for companies who have student loan repayment benefits might help the students in debt both get a job and pay off the loan.

    1. they used to be subject to them and were specifically removed a decade or so ago during one of the fits of ‘financial reform’…

  7. You’ve put your finger on the big issue–18 year olds make bad decisions. This is why banks won’t usually lend 18 year olds large sums of money. Lenders are in the risk evaluation business and left to themselves they will weigh the risks of any particular loan against the return in terms of the interest rate.

    I was 50 years old when I financed a car for the first time in my life. I made some very bad choices (including marrying a woman who had even less financial savvy than I) and my credit was terrible, I paid for my lack of a track record in a higher interest rate than someone with a good credit history would,

    An 18 year old entering college is a terrible credit risk, and banks treat them accordingly. A professional financial institution wouldn’t give a college student a loan for a 15,000 dollar automobile without a fairly serious down payment and a cosigner.

    So it simply doesn’t make financial sense to give that same student a 60,000 loan with no collateral and no cosigner.

    1. Except that they do have a cosigner – supposedly the best one possible, the Federal Treasury. Which, when presented with the bill for the defaulted loan, simply sells some more Treasury bills (and then seeks a tax increase).

      That is the problem with the entire system. There is nothing there – for the would-be student, the college, the bank, or the government – to perform any kind of due diligence.

  8. Permit me to point out that “hundreds of thousands” is the outliers. The mean is about 24 thousand. The median is about 12 thousand.

    This is important to factor in.

    1. That’s interesting. All the horror stories are about much much larger loans. I suppose I could have looked for some actual data…

    2. I believe a lot of the $100K horror stories involve graduate school….
      and another problem area is the creeping requirements for MA/PhD’s…

      But to lighten things up, what’s the ideal German career path?
      To stay in school until you’re 36, and then retire at 42!

      1. Also, private colleges charge much more then land grant universities.

        But those numbers seem very off.
        That was about my experience of where they’d be for an in-state student at a land grant state college in the early ’90s. Tuition has multiplied several times since then, and the prospects of high school students working and saving for college have been getting worse since then.
        (And even back then, the college administration was aggressively pushing students to borrow more than necessary. )

        1. I even had faculty asking why I was pushing so hard to escape, er, graduate. Um, because I want to start making money and doing other things?

          Grad school was worse. Tuition was $100/hour when I started at Flat State U in 2003. When I finished my graduate program in 2009 it was $650/hour. In state tuition.

        2. define ‘land grant universities’- do you mean public universities? not true, then, at least in CA.

      2. No, they don’t. My undergrad loans totaled over $60k, and my school was self-regulated to just under what people could get in standard financial aid packages (perkins, sub and unsub stafford). The schools I thought i couldn’t afford and thus didn’t apply to would have cost considerably more… and I had classes with hundreds of dollars in .. well, call it ‘lab costs’ and at a ‘good school’ they were higher.

  9. this crop of kids had a lot of helpers leading them down the braid, braid road; government, banks, and college administrators, for a start.

    I’d start with their parents, actually. A lot of kids, particularly from blue collar homes, were warned by their factory-working parents that even menial jobs at McDonald’s would be impossible to come by without a college degree. This warning would be particularly dire in Rust Belt areas, where factories closed left and right, and the only people who seemed to land readily on their feet had some kind of college degree. Jobs with degrees didn’t seem so readily outsourced (until you find out about H1-Bs). And of course, teachers all throughout K-12 would harp about the necessity of a degree. Consider how many high schools quit offering vocational tracks, and insisted on college prep instead. My high school still offered voc ed, but a lot didn’t. I strongly agree that the 18-year-olds are the very last people who should be blamed for their predicament.

    I’m on board with putting the colleges on the hook. I have long wondered what is the point of those billions in endowments, if they’re not being used to offer generous financial aid packages? If the point of college is to broaden the mind; why not offer scholarships to ensure the maximum amount of mind-broadening funds available?

    The Habitat for Humanity option sounds promising, too. It seems like a modern version of the Year of Jubilee, without any modern moral hazards to go with it.

    1. And then you have the problem that in order to get what was a high school level of education, many students need another year or two of remedial classes, which are now given in college. So alas, yes, because of watered-down public schools, college is almost a necessity, just not for the reasons often claimed. *kicks soap box away with hind foot*

      1. You beat me to it!

        The degree of ignorance displayed by those of my friends’ children who’ve graduated from college in the last ten years leads me to think that in many cases they needed four solid years of remedial classes… which they did not get. But if you think two years would do it, I yield to your expertise.

        1. I was thinking about very basic, moderately-skilled job level of information. Things someone who is starting an apprenticeship would need – literacy, math up to algebra, earth and life science. Not “to be a good citizen of Western Civilization and the US” levels of historical and cultural knowledge.

          Yes, I’m aiming low.

  10. First, stop issuing new federal student loans.
    Second, determine if the colleges engaged in false advertising such as IT degrees pay $100,000 per year without specifying location of said job and number of jobs, estimated, available to students each year, within two lines of text of the salary amount in the same size or larger font. If the school did advertise thus, they are liable immediately for all outstanding balances for all students enrolled in any program so advertised. They have physical structures and/or endowments they can use to repay, which were probably paid for by the loans anyway. An eighteen year old has no way to guess that a college in Wyoming is talking about NYC wages, not local, when they pull that stunt, nor that there are only ten percent the number of jobs as there are graduates in the field.
    Third, make the remaining handful of existing loans bankruptable after a certain number of years, maybe seven, of the loan holder being unable to afford payments. We can use the real estate formula for that-mortgage equals 1/4 income, total debts equal 1/3, so if the loan payment does not fit in 1/3 -1/4 income, then the loan was not appropriate to offer.

  11. University = wedding.

    Kids think six-figure debt for the college EXPERIENCE!!! will be life-altering and totally worth it. Exactly the same as brides think five-figure debt is totally worth it for the Perfect Wedding Experience!

    In other news, did y’all know that the Department of Education has a SWAT team? Yes, they do. If you Duckduckgo “Dept. of Education SWAT” you’ll see some interesting shit.

  12. First, technology and the economy are changing rapidly enough that even if the kids had the exact same affinities and aptitudes as the parents, the parents could not simply assume that the kids would be fine following in their footsteps.

    So, what do they do? Most assume that the education system is the only option. A bunch of different subtly wrong processes might get somewhere, because of stuff randomly canceling out, and because of the economic value of differences. The whole public system has been captured by federal regulation and funding, and the processes are all very similar. Starting with hiring education majors, and said training amounts to a technocratic theory, treating people as widgets. On that foundation, a lot of research within the discipline is epicycles on the basic framework of age/subject specialization. The kids are learning from people whose major life experiences are a bunch of nth graders, and a captive job market they have access to via training that truly observant and analytical people would see the holes in. So the kids go looking for training that will give them access to a captive job market, expecting to coast calm waters on a silver platter.

    Then the second mad technocratic scheme comes into play. We have a lot of poor kids, who haven’t had a lot of chances. If they pass training that previously led to successful people with jobs, they will be successful people with jobs. (An intelligent person with ‘previously valuable’ education can still fail to find work. No training can teach all the skills, so every training has necessary supplemental skills, required for success, but not in the training. Furthermore, supply can exceed demand.) Professors and administrators likewise have an unusual job market, but perhaps not quite so distorted a background. The wiser ones will get into trouble if they try to pass on common sense decision making, because it looks like resistance to the mad scheme to cargo cult the poor into the upper middle class. So, kids are primed to coast, and then are not aggressively weeded out in undergraduate even if it is fairly clear that they don’t have the drive, ability and goals to make money after getting a graduate degree.

    This, without resorting to deliberate intent to cheat, merely blinders and wishful thinking.

    As full a disclosure as I can afford at the moment: I have been entangled in this. I am not disinterested. Some of this thinking probably benefits me. I may have made, am making, or will make in the future, quite serious mistakes. I should not make any policy recommendations here, and that is only partly because I am a recovering technocrat. Technocracy is literally rule by experts, but in actual practice a technocrat recommends simple solutions that will not work in reality. (I did recently have a guerilla education proposal that I meant to write up for ATH. Basically, it proposed fighting big education by systemically providing one on one mentoring. It was not a proposal to fix things with the right bureaucratic intervention.)

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