How’s this for a business proposition? I owe you $17,000. If you forgive my debt, I won’t use Uber or Lyft for my transportation needs. Or, how about I agree to give up texting and mobile messaging for a year in exchange for debt forgiveness? Doubt I’d get any takers.
I received an email about a recent survey, “Survey Reveals What Millennials Would Rather Deal With Than Paying Student Loans”. The sender suggested, “The insights would be a great fit with your audience.”
They questioned 500 millennials, age 18-34. At first, I thought it was a joke:
“We’ve … compiled some key findings:
- A staggering 49.8% of all respondents said they would give up their right to vote in the next two presidential elections in order to have their debt forgiven
- Ride-sharing services like Uber or Lyft don’t seem to matter to millennials quite as much… According to the results, 43.6% were willing to give up these services forever in exchange for debt forgiveness
- Interestingly, 42.4% of respondents would also give up traveling outside of the country for 5 years, while only 27.0% said they would be willing to move in with their parents for 5 years
- Millennials seem to value texting more than the other options – only 13.2% reported being willing to give up texting and any mobile messaging equivalent for the next year in exchange for having their debt forgiven
- Only 8.2% of respondents chose to select none of the above and said they would rather keep paying off their student debt”
I asked the sender, “… My generation was faced with a choice. The rich kids went to college, the poor kids joined the military (gonna get drafted anyway) and then came out and used the GI bill to help fund their college. Were there any questions about trading military time for debt reduction? I received a polite response saying that was not part of the poll. Did it even dawn on them to ask?
The survey sponsor appears to be in the loan business, promoting refinancing student loans.
While I passed on the idea, I soon changed my mind. The survey appeared on Facebook, generating some brutal feedback. Many called respondent’s snowflakes and much worse. They felt the respondents had no clue about sacrifice and the real world.
Might part of the problem be the survey itself? If respondents were only given those silly choices, they would check the ones they felt most appropriate. Perhaps student loan debt is not that much of a problem. They are not willing to sacrifice much to make it go away.
Here’s one example. Survey says…49.8% would give up their right to vote in the next two elections to have their debt forgiven. The article also mentions less than half of the millennials voted in 2016.
What some consider sacrifices doesn’t cut it with many Americans.
OK Millennials, listen up!
When you took out a student loan, you entered into a contract, borrowing money to complete your education. You felt your education would lead to a better job and you could repay the debt from your earnings.
The government was a co-signer, guaranteeing repayment of the loan. By doing so, the banks offered YOU very low interest rates.
Today, paying off your debt is an inconvenient challenge. In my article, “Student Loans – A Multigenerational Curse” I outlined you are not alone:
“Since the 2008 recession began student loans have skyrocketed to over $1.4 trillion.
The Wall Street Journal reports, “Revised Education Department numbers shows that … at least half of students defaulted or failed to pay down debt within 7 years.” Many young people (not all graduated) owe several hundred billion dollars they have been unable or unwilling to repay.”
The survey says, “…The Federal Reserve puts the median student loan debt balance at $17,000, with monthly payments of $222.” More than half are failing to honor their contractual obligations.
| Government guaranteed student loans are a deal with the devil. |
With some very limited exceptions, you cannot discharge student loans in bankruptcy court. As a taxpayer, I LOVE that provision. In 2012 Marketwatch reported:
“According to government data … the federal government is withholding money from a rapidly growing number of Social Security recipients who have fallen behind on federal student loans. From January through August 6, the government reduced the size of roughly 115,000 retirees’ Social Security checks on those grounds.”
What is debt forgiveness?
Unlike bankruptcy, debt forgiveness is when a lender voluntarily agrees to allow the debtor to forego payment of the remainder of the debt. It’s a gift, plain and simple. If student debt is forgiven or defaulted, the government pays off the bank.
Unfortunately some politicos, pandering for votes, are promoting the concept, willingly giving away billions of our tax dollars.
Let’s cut to the core. Asking for debt forgiveness is asking taxpayers, your friends and neighbors, to pay for decisions YOU made for YOUR benefit.
The Student Loan Debt Clock tells us the current total is over $1.5 trillion. Reference.com says there are approximately 138 million US taxpayers. If all student loan debt were forgiven, the cost would be approximately $10,870 per taxpayer.
It’s no wonder the feedback on Facebook was so negative. Taxpayers work hard and don’t want to pay off someone else’s debts.
What to do?
Student loans should be a last resort when it comes to financing an education. Students should be educated about debt and the consequences before they take out the loan.
As I outlined in my previous article, college costs should be minimized. Four-year graduation should be expected, 36% of incoming freshmen get it done! Students are making adult decisions, many times at an early age, and parents need to guide them so they don’t end up with a huge debt burden.
I checked out the Army ROTC website:
“Scholarships and stipends in Army ROTC help you focus on what’s important. Namely, getting that college degree – not how you’ll pay for it.”
A college degree and a few years as a military officer have worked well for many young people. If you are not willing to do so, that’s fine, just be responsible and honor your contractual obligations.
27% of the respondents said they would be willing to move in with their parents for student loan debt forgiveness. That’s a bass-akward solution for sure!
A recent US Census Report tells us:
“More young people today live in their parents’ home than in any other arrangement: 1 in 3 young people, or about 24 million 18-to 34-year-olds, lived in their parents’ home in 2015.
… At 24.2 million people, the population of 18- to 34-year-olds living at home is a large and diverse group. …About 81 percent are either working or going to school.”
If you are going to live at home, do it while you are going to a local junior college, saving a tremendous amount in educational cost. The goal is to transition into adulthood easily with no debt burden.
While many parents want to help their children, having them move back home after college for extended periods of time is an economic and emotional burden. Parents must move ahead and get their retirement in order.
Plan B
Based on the survey and available choices, it’s easy to conclude that student loan debt is more an inconvenience (average $222/month???) than a real burden. If debt consolidation will help reduce monthly payments, investigate the option. However $222/month is not the case for many millennials.
My granddaughter and her husband married in their senior year in college. Their combined student loan debt is significant. They both work, husband got a second job and they are responsibly working to pay off their debt and raise a family. Yes it is difficult.
Debt Forgiveness
There are ways to legally obtain some debt forgiveness. Military.com highlights many Student Loan Forgiveness and Discharge Programs. It involves more sacrifice than promising not to text. Here are some options:
“Public Service Loan Forgiveness Program
Under this program, members of the military who have been employed by the military or a qualifying public service job for the last 10 years may have their federal student loans FULLY discharged.
Public service qualifying occupations include:
** Emergency management
** Military service
** Public safety
** Law enforcement
** Public interest law services
** Early childhood education (including licensed or regulated childcare, Head Start, and state-funded pre-kindergarten)
** Public service for individuals with disabilities and the elderly
** Public health (including nurses, nurse practitioners, nurses in a clinical setting, and full-time professionals engaged in health care practitioner occupations and health care support occupations)
** Public education
** Public library services
** School library or other school-based services
You need to be employed in these positions at least full-time, which is considered to be at least 30 hours a week or what the employer considers to be full-time.”
If you have student loan debt, sacrifice and do what it takes to get the loans paid off as quickly as you can. If you are in college, or headed in that direction, get a good education in four years with minimal student loan debt. Work your tail off so you can easily transition to your next step in life.
Decisions and behavior have consequences. Welcome to the adult world!
And Finally…
“If you always protect your offspring in a cocoon they will never learn how to fly…”
For more information, check out my website or follow me on FaceBook.
Get your FREE Special Report:
10 Easy Steps To The Ultimate Worry-Free Retirement Plan
Until next time…
Dennis
www.MillerOnTheMoney.com
UNemploy[able] debt-serfs – with the OPPORTUNITY to [freely, finally] operate in “System-D”, for those that have repented and then able to see/access the “Blessings from the Beginning” – hoo-wah!
This is bullshit imo. What business does the government have in backing student loans anyway? A student loan should be an unsecured debt no different than a credit card.
People with student loans should use every tool they have available to them. Get a loan to pay it off and then walk away from that loan if possible.
Wip, you are correct. The government has no business backing student loans. And student credit should be no different than any other credit in bankruptcy. Most kids are too stupid to figure that out. All you need to do to get out from under that student debt, is sign up for a bunch of credit cards, cash advance on them all, pay off the student loan with that money and then tell the credit card companies to suck your ass. I’m not a fan of anybody defaulting on debt. But the idea that we can take a generation that’s having a hard enough time with family formation anyway, and sacrificing them to the gods of debt servitude is bullshit. A prosperous society is a simple proposition. Low cost of living and abundant employment. Starting kids out, promising them education as the key to it all is a fraud from the beginning, when there are no jobs to place them in after they paid for that education. We can’t afford to sacrifice a generation to that kind of fraud, so the fraudsters are the ones that need to eat shit. Not a bunch of gullible kids who in most cases thought they were doing the right things.
The banks are figuring out a way around that. The last two credit card offers I had from my credit union included the fine print that if I failed to pay they would attach my savings or checking account to make the minimum payment. I argued that it was not then a credit card as those have unsecured credit. It was a secured credit card like that given to people that had been bankrupt or just starting out in the credit world. I told them forget about it as it was not in my best interest.
I agree with you about discharging it in bankruptcy. But before that law is passed, the government has to get out of the student loan business. Otherwise, people will just borrow money to their gills, live it up on credit, and default as soon as they graduate. If you do this at 23, it’s off your credit history at 30. People would plan their college time around that. Student loans aren’t mentioned in the constitution, therefore the federal government has no authority to be involved in the student loan business.
Hi,
The real purpose was social engineering. They wanted to make it easy for minorities to go to college. Of course, like a lot of government programs, the unintended consequences overwhelm the system.
Best regards,
Dennis Miller
No question, Dennis. But the longer you keep kids in school, it also kept them from realizing there were no real world jobs. And the problem with educating a bunch of unqualified people is, you end up giving them credentials instead of education which makes them suitable for nothing except, you guessed it government work, where the price of admission is that credential. And as you reach the limits of government hiring you end up starting to retire people at 45 years old to make room for the next wave. Like they always say sooner or later you run out of other people’s money to spend. My father worked for NOAA for 45 years. I knew exactly what my dad did for a living. He was paid enough to support a family in a modest lifestyle. His pension has been enough to keep my mom in her house after he passed away. My brother-in-law works for Freddie Mac. He makes considerably more than my dad ever did. I piss off the whole family when I challenged them to tell me what he actually does for a living. He’s worked there now for almost thirty years. Nobody has a clue what he does. I’m not even sure he knows. It’s got to change. It’s going to change
The student loan nonsense that exploded during the Obama years was done to keep more people out of the employment stats. Loan unlimited amounts of Monopoly money to morons to pursue their masters in underwater basket weaving keeps people from entering the work force until they are almost 30.
Hi,
I have some friends who retired from the Federal Government with very nice ($150,000+) pensions, plus health care. Most don’t “get it”.
At current interest rates (I’ll use 2.5%), you would have to have a $6 million nest egg to fund that kind of income. I was self-employed. For me to fund something like that, I would have to earn around $12 million, pay around half in taxes, and bank the rest – on top of having to feed my family.
The government pensioners are living as well as many millionaires without a money worry in the world. A friend, who is a cruise regular, mentions that a large percentage of people they meet on cruises today are retired government. I can understand why.
My friends acknowledge this; however they counter with the idea, when they die, they don’t get the money, which is true. Price the cost of an annuity that would pay $150,000 in annual benefits and it is very expensive.
I’m starting to see (and feel) a pushback on the part of the private sector that is having to fund both all levels of government pensions. I think a lot of it has to do with things you mentioned and have mentioned in the past.
While those who retired from the federal government may be safe, because they own the money tree, I think a lot of state and local pensioners will be hurt. Taxpayers are revolting at the idea of having to bail out others while the middle class in particular is really hurting.
I also have friends who retired with Illinois pensions. They rightfully say they fulfilled their part of the bargain and expect to be paid. I can understand their feelings, but there will be a day of reckoning….
Best regards,
Dennis
There will be days of reckoning. You can bet on that. Always enjoy your stuff, Dennis.
Once the currency collapses, what good is a pension, government or otherwise? Did the Weimar pensioners do well when the Deutschemark collapsed after WWI?
It’s good NOW; it’ll be OK until the Crunch (loss of confidence in the currency); then it will SUCK, like anything else tied to fiat.
We are printing currency by the TRILLIONS; Dennis, do you see any way to AVOID a Crunch / collapse? When dollars are dust catchers, what good will a government pension be? Or any other?
How do you plan for retirement when NO ONE is acting responsibly?
“A staggering 49.8% of all respondents said they would give up their right to vote in the next two presidential elections in order to have their debt forgiven”
Not unexpected, at most 25% of them vote anyway so they are not giving anything up.
(I think Obama pulled something like 50+% of them, but that still leaves almost half that don’t vote anyway)
“A staggering 49.8% of all respondents said they would give up their right to vote in the next two presidential elections in order to have their debt forgiven” Then in a few years when the gov goes back on that promise too….
All the power and influence of the government should be used to collect deadbeat dumb asses debts. They thought they were getting free money from me and to screw me out of it was ok. Fuckem.
All benefits from the fed government should be withheld until their debt is paid.
I see “I will stop masturbating for 2 years” didn’t make the list.