Stop Calling Student Loans “Good Debt”

For years financial advisors and experts have lumped student loans into the category of “good debt” calling it an investment that would create future value like a mortgage or business loan. Ok, guys, knock it off! As evidenced by the thousands of unemployed and underemployed professionals in the US right now, a college education is no longer a guarantee of employment. The degree that once opened doors may not be worth the fancy paper it’s printed on.

No one is more surprised than I am that almost three years after completing a master’s degree in management I am still woefully under-employed. Perhaps the many counselors and advocates who helped me apply for financial aid would be surprised as well … I don’t know as I certainly never hear from them—ever. I had a very frank discussion two years post graduation with the college recruiting folks when they called to ask me if I would send new students their way. After giving them a piece of my mind I had myself removed from the mailing and call list. I could not in good conscience send anyone down this road.

Once we face the fact that it’s not “good” but just plain old debt, let’s look at the pre-loan counseling process. Colleges and lending agencies need a different script for dealing with students who are over forty or do not already have an employer lined up. Professionals over the age of forty face huge barriers to re-entering the workforce after parenting breaks. They have difficulty changing fields or avoiding aggressive cost-driven downsizing. Older adult students could be taking on thousands of dollars in debt they will never, ever be able to pay off because of age discrimination or other issues beyond their control. Students starting their education in debt without the promise of a job may find they start their careers under a cloud of financial gloom that entry level jobs can never help them escape.

Since March of 2006 I have aggressively sought work throughout the United States. I’m registered with multiple job placement agencies, public and private. Have networked until my face hurts and as I describe in another article have taken any and all jobs offered to me. Still I remain underemployed, and thanks to this (and divorce), unable to pay my student loans. So every few months I go online and once again apply for a deferment … hoping it will be the last time and I will finally land a decent job. Recently I decided to contact Sallie Mae and ask them the unthinkable, what would happen if I could never find work? Was there anything else I could do, some other program to provide relief to people like me who were suffering in this nightmare economy? Here’s what they said:

DEAR KAREN S WATTS,
Thank you for your inquiry and for your business with Sallie Mae.
You are solely responsible for the repayment of your student loans as per your signed Promissory Note. There are no programs available due to nightmare economy and your unemployment record.
If we may be of further assistance, please visit our Web site at www.salliemae.com.
Sincerely,
Customer Service

Short of taking to the streets with torches and pitchforks, what can we do in the face of such callous disrespect, in the guise of customer service? Much of Europe still offers free higher education to citizens, though this system, which is supported by very high taxes, seems to be crumbling. The debate about whether or not a college degree is worth it has become more heated and pointed than ever before. The Internet is flooded with stories of bright college graduates who can’t obtain work, and certainly not the kind of salaries required to pay off the thousands it cost to become graduates. While a small segment of the population seems to be benefiting from accessing the technical school system—carving out careers in two years or less, those of us who already jumped off the higher education cliff can only send out a new pile of resumes and wait for the next nasty form letter from Sallie Mae.

Tags: cost of college degree, good debt, older-students, Sallie-Mae, student-loans, underemployed, unemployed college graduate

This entry was posted on Tuesday, January 13th, 2009 at 3:43 pm and is filed under blog, home. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.