Saturday, June 4, 2011

Classroom Time For The Reader Who Said: "No 'solutions' are needed as there is no problem"

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A reader made this incorrect statement today (see the comments):
 No 'solutions' are needed as there is no problem. Do not borrow money that you cannot repay. If you do borrow money, pay it back per the agreed loan terms or bear the consequences. 
[Note that no change in bankruptcy laws is remotely possible with Republicans in charge of the House of Reps and 60 votes needed to overcome Senate filibusters. That said, those who wish to spin their wheels trying are obviously free to do so.]
When I first began researching and writing about the student loan debt crisis, I had readers say this all the time. Frankly, I'm surprised to see it again, because things have (a) gotten so much worse and (b) our hard work is getting noticed by major media outlets (I now write for several of them, including USA Today).

Since I am an educator, I think this reader needs to be educated on the topic. Here's my response:

@Anonymous 9:32 AM - Well, I beg to differ. There are plenty of experts who agree. I talk with them on a regular basis, too. 

It's really hard for me to take this comment seriously. I have to be honest. With outstanding student loan debt at over $900 billion and fast approaching $1 trillion, you can sit there and argue that there isn't a problem? Really?

It's a systemic problem, and there are complex reasons for why we're facing a student loan debt crisis.

As for blaming the debtors. Please stop doing that. It's boring. I've heard that argument so many times. It makes me yawn. If you spoke to any student debtor - and I've now spoken with thousands and thousands of them - you'd know that they WANT to pay back their loans. But there are reasons for why it has become difficult (if you checked the news recently, the creation of jobs for the month of May was PATHETIC. A 'whopping' 54,000 jobs were created. In April? It was 38,000!).  So smart, educated folks have all these degrees, want to work, and can't find anything. (Oh, read some Stiglitz to ponder this problem further. There's something called inequity, and that's another part of the problem).

On that note of inequity . . .  

When Wall St and the banks and the hedge funds stole everything and sent the economy sliding, millions and millions of jobs were lost. Most of those jobs aren't coming back. To make matters worse, the damned government bailed out the banks (that nationalization of the banks, mind you, began under a Republican administration. That's right. Bush and his cronies SOCIALIZED the banks. Who would have ever imagined? A Republican doing socialist-y things!). So the jobs are gone, but folks still have to make ends meet. They have families to feed, rent/mortgages to pay, etc., etc. Folks also find themselves getting sick. And since our health care system is a f^%&#in' joke, they can't manage their bills if, God forbid, they become ill. Those are the hardest stories to hear. 

Then there's this philosophical issue about the importance of education. I won't get into the fact that education serves a public good (that's a serious matter, and I'll table it for now. If you're interested in hearing my thoughts on the matter, you can read my recent interview with Henry A. Giroux - For now, I'll just talk about the economic side of it. If you read any recent reports/data on the matter, you'd understand this, too. For the time being, I'll just provide you a little tidbit to make this point. It comes from a recent study put out by the Young Invincibles. In Ohio, 37% of millennials without college degrees were unemployed. Conversely, 4% of millennials with degrees were unemployed. That's a pretty startling difference, don't you think? Of course, I am trying to determine if there is any data to show what sort of jobs the millennials with degrees have . . . because if they're flipping burgers or working as a maid at Hotel Corporate Crud, chances are, they aren't benefiting from their education in a tangible sense. That gets back to how silly your remarks are. Because if these folks are underemployed or working jobs that only pay minimum wage, then they're probably having a hard time paying their loans back. See, that's where people like you and me don't see eye to eye. It's clear to me, having studied sociology and history and all those 'pointless things,' that the problem affects the whole of our society. If we neglect education, scary shit starts happening (just pick up some books by good authors, and you'll find plenty of examples and case studies of what I'm talking about). If we stop educating people - and we're far behind now other countries when it comes to the percentage of folks with college degrees - then shit is just gonna get worse. It already is bad, and if you know a thing or two about uneducated countries, it ain't pretty. We're on a fast track down to third world status. Hell, in Detroit, for example, 50% of the city's population is illiterate. I don't know about you, but that's scary as hell. Study after study has shown that societies that have educated the majority of their people are healthier. Those societies are also more equitable. That means the distribution of wealth isn't out of whack. Oligarchies like Iran, Russia, and U.S. are inequitable, which means there's a whole lot of trouble as a result. 

On a more practical note, the statistics make it clear, that the most assured path to financial security is to earn a degree. It's a shame that education was invaded by corporatists (and I'm not using that in a lame, conspiracy theorist way). Education should not be a part of the market. Period. 

You're missing another key point here, too. Tuition has skyrocketed over the years, while wages for majority of Americans have stagnated (in fact, if you read anything by Robert Reich, you'd know that wages are going DOWN. They've been stagnant since the 1970s. That's pathetic when you realize that households now have two earners, and not one as they commonly did in the past). So what's the leave people with? Nothin' . . . that's why people BORROW money to go to school!

Moreover, these loan sharks have full control over the conditions of the loans, i.e., they have NEVER been regulated (because the U.S. Government gave birth to them). Because the money is guaranteed and the lenders don't have to worry about bankruptcy claims on the part of borrowers, they have no incentive to negotiate the terms of repayment. They have all the power. How's that for free market ideology?  Moreover, they mislead people - there are also many examples of lenders making deals with financial aid offices to defraud students (Cuomo busted up a few in NY, and uncovered kickbacks that financial aid officers were receiving from lenders). Not only that, they have defrauded American taxpayers (look up the case that former researcher for the DoED - Jon Oberg - just recently won for the U.S. Government. The case was settled for $58 MILLION, because the bastards figured out a loophole and got away with it under the Bush Regime). 

Do your research on the subject, and then we can talk. 


Nando said...

Those the piece of trash who wrote the following:

"No 'solutions' are needed as there is no problem. Do not borrow money that you cannot repay. If you do borrow money, pay it back per the agreed loan terms or bear the consequences.
[Note that no change in bankruptcy laws is remotely possible with Republicans in charge of the House of Reps and 60 votes needed to overcome Senate filibusters. That said, those who wish to spin their wheels trying are obviously free to do so.]"

Do you feel the same when we allow corporations to evade taxation? Do you support allowing those with credit card debt to discharge their purchases in bankruptcy? What are your "thoughts" on Hideous Toupee Donald Trump - and his numerous business bankruptcies?!?!

Liz said...

If I repay my $15,000 bar loan by making the suggested monthly payments as scheduled, I will end up repaying $41,000 during the next 20 years.

I only needed the loan, which was in addition to my school loans, because, after three years studying a school that charged me tens of thousands in annual tuition, I still had to pay thousands to Bar Bri and find a way to live without working for at least six months while I studied for the bar and tried to find a job in an over-saturated legal market, one which my professors NEVER EXPECTED all, or even most, of my classmates at a top-25 school to be able to enter.

I think there's a problem.

Anonymous said...


Donald Trump sheared off the riding end of a crusty old witch broom, and then crazy glued it onto his craven and dull pate.

He did it so as to adorn his lifeless Kewpie doll, doll face, with puckered lips and lifeless, greedy eyes.

He is, a Willie Stark. He is. A nothing.

Ah, Bartleby. Ah, humanity!

Anonymous said...

You hit the nail on the head. The problem is that individual incomes have declined in real terms since the early 1970s when the post-war boom ended. Ironically, when the USA had more income redistribution and higher marginal income tax and corporate tax rates (I realize there were a lot of deductions for high-earners and that is part of the reason they put in the AMT), the USA's economic growth was stronger. Conversely, the American economy has been much more poorly performing since we switched to a paradigm of restricting social programs, cutting taxes and focusing on monetary policy over fiscal policy. And the progress in reducing inequality during the postwar era has been reversed over the past three eras. Lower inequality has been associated with better economic performance overall. Allowing more people to participate in the fruits of the American economy helped everyone, including the high-income groups.

On the other hand, more and more data will emerge over the next few months and years indicating that student loan borrowing and debt is much smaller (less of a problem) than the press has indicated and is restricted to small sectors, such as for-profit education. The problem with law school is not student loans. Student loans are just one of the smaller symptoms of the larger problem. In addition, the available, loan-related solutions on the law school end are relatively straightforward and limited -- repeal the Grad PLUS loan, whose introduction in 2006 removed loan limits and thus tied sticker prices much more closely to borrowing and largely removed institutional incentives for controlling net prices.

Anonymous said...

Does anyone believe that the bankruptcy laws will be changed with Republicans in charge of the House of Reps? I don't think it will happen. The time for making a bankruptcy law change expired when the Republicans took control of the House in 2010. The Dems had the White House, the Senate and the House of Reps for two full years from 2008-2010 and STILL didn't make student loan debt dischargeable. That was when the Dems had the political power to make the change and chose not to even try. It was not and is not a high priority. And those who think the Republicans will pass a law making student loan debt dischargeable are fooling themselves.

Just one person's opinion and I could be proven wrong; so any who feel strongly should pursue the change they want. That's how the system works and it works beautifully.

Anonymous said...

Uh-oh, someone forced Liz to borrow $15,000.

Now the lender expects repayment and Liz thinks there's a problem...with everyone except her.

Nando said...


If you have a college education and actually believe ANY of the filth that you wrote above, then you should seek a refund from the institution you graduated from.

Cryn Johannsen said...

@Anonymous 11:58 AM -

I am just as cynical as you are about this bill succeeding. As you're probably aware, there is a bill that has been introduced by Sens. Franken, Durbin, and Whitehouse with Reps. Cohen, Miller, et al. to restore bankruptcy protection rights for student debtors. See here:

I've been working on other policy initiatives for borrowers as well as articles, so I haven't taken a look at the language or provisions of this bill.

If they could get support from Republicans, that would be great. But I'm not holding my breath. On my last trip to DC in January, I had a grim discussion with a sympathetic and understanding Congressman - we discussed the problem with his new (ahem) colleagues. It's so bad right now, that one of these new you-know-whats wants to make it impossible to discharge MEDICAL bills in bankruptcy. The two of us agreed - the student loan debt problem isn't going away, and chances of a bill like this succeeding are slim.

Cryn Johannsen said...

@12:27 Please tell me you actually read the post. I was hoping to educate folks about this issue. You're missing Liz's point. She's illustrating the problem on a micro-level. That doesn't diminish the crisis on the macro-level. That's the damned point. (Nando - good one!)

edublogger said...

Oh so you don't think there's a problem? Hmmm... you must have been born to a rich family and didn't have a care in the world... that makes you not only ignorant to what's going on in the real world today but also clueless as to how it's affecting those borrowers... it seems the only institution you graduated from was your daddy's wallet... Come back when you have something concrete and factual to discuss because $900 billion dollars in outstanding debt sure sounds like a big problem to me and don't put all the blame the students... it's the majority of the lenders and schools who go after them with their deceptive ways and practices just to make a buck and that IS a fact!

Cryn Johannsen said...

@Anonymous 5:20 AM - thanks for your comments. I fully understand the points you reiterated from my piece about the overall decline in wages, growing inequality over the past 3 decades, etc., etc. However, I am curious as to why you think that the student loan debt crisis isn't significant? I get your point about it fitting into larger problems( i.e., societal/institutional/structural issues, not to mention the triumph of neoliberalism that obviously coincides with the death of the state). But I think the issue of education being undermined, overall, is enormously important. (In saying that, I'm not suggesting you don't agree). Getting back to the financial and economic repercussions, how can you argue that it's insignificant when we are fast approaching the $1 trillion amount in outstanding student loan debt?

Anonymous said...

There is nothing especially significant about the $1 trillion level. What matters is the amount that is never repaid. That's why we must continue to empower debt collectors - to ensure full repayment. I support reform of the FDCPA to strengthen the rights of both direct creditors and secondary buyers of student loan debt. This is the kind of discipline which will help all wayward debtors become useful members of society in the long run.

Cryn Johannsen said...

@Anonymous 6:04 PM - your remark doesn't even warrant a response. You are sorely out of touch, and just a symptom of how this country is filled with ethically bankrupt 'things' with poorly articulated thoughts.

Anonymous said...

6:04 is a troll.

Cryn Johannsen said...


Anonymous said...

Did you see this? Scary:

Cryn Johannsen said...

I did - I just blogged about it. It is very, very disturbing.