Wednesday, January 15, 2014

The Year 2013: Smoke and Mirrors

It has been an interesting year, 2013, and I can't say I'll miss it. That is especially the case when it comes to the student loan debt crisis.

As we get wiser, we learn a thing or two about smoke and mirrors, whether it's in our professional lives or our personal ones. This is particularly true if we become committed to living a rigorous life dedicated to moral integrity, honesty with one's self and others, and just trying to be an all around decent human being each passing day. If we live this way - or in the very least attempt to live this way - we begin to see through the smoke and mirrors quite quickly. Even better, it doesn't even disturb us when we see the clowns who are busy creating the plumes of smoke and putting up all the silly mirrors. In fact, the healthier we become, the more grounded we find ourselves, the more empathy we have when we see the destructive nature of those who are scrambling to create the illusion with smoke and mirrors. (Clowns are pretty funny, once you realize they are just sad people with lots of make-up on, wearing bad wigs).

This has certainly been the case with my work on the student loan debt crisis and its own fun house filled with smoke and mirrors. Over the course of these past four years, I have spent a great deal of time reflecting upon the nature of the crimes that have been committed in order for clownish people and foolish, thieving institutions (under people in power) to rip off millions and millions of Americans. These clownish people wittingly turn their fellow Americans into permanent indentured debtors! And they do it through smoke and mirrors! They have turned higher education into a demented fun house! Can you believe it? What a gas, right?

I will openly admit that I have been too close to the anger of these debtors, that I have seethed with fury, that it has brought me to tears, that it has caused me sleepless nights. But through those moments of anger and sadness and pain, I have been inspired to write and to research and - most importantly - to reach out to people about the problem. I have reached out to so many of you, I have asked you to share your stories with me, and you have in turn told me your stories, and for that I am most grateful.

I have also reached out to Congressional leaders, and so far, that hasn't gotten me very far. Which brings me back to smoke and mirrors. This year has been all about smoke and mirrors, another type of smoke and mirrors, something created by our leaders and the media. We have heard so much about the student loan debt crisis from our leaders that many of us - including myself - have been fooled into thinking that something might be done, that something is being done to solve the systemic crisis that is swallowing up more and more people as I write this short essay. But you see, that's how smoke and mirrors work, and we've all fallen victim to it, because ultimately nothing is being done to solve the crisis. It's festering and worsening.

Oh, yes, the power of smoke and mirrors. Just when you think you've seen through all those tricks, you find yourself right back in the fun house. This is a different fun house, one created - as mentioned - by our leaders and perpetuated by our media.

Does that mean I think it's hopeless? Nope. But I do think this situation needs some serious reconsideration, especially when it comes to solutions at the policy level. Just because there is a lot of jabbering about a topic doesn't mean there is any headway being made. In fact, it can actually serve to diminish the enormity of the crisis. It is the illusion of solving a problem. It is a form of smoke and mirrors, and it is dangerous, because it is disingenuous, and a disservice to the American people. After all, if you are going to talk the damned talk, you better walk the walk.


Anonymous said...

"This is a microcosm of the greater economy - an economy that has produced the "lost generation" of young Americans (18-34 year olds) with an unemployment rate of nearly double the national average. A generation for which underemployment is the norm. A generation often burdened with tens of thousands of dollars in education debt, and unable to secure employment and compensation commensurate to their skills and education despite doing all the right things, doing what almost ensured success for prior generations of Americans."

Anonymous said...

Amen, Cryn. I have said this all along. They think that by talking about it, the public will be appeased because they'll assume something is being done. They think that by promising to warn new students of the dangers of student debt, somehow, all previous students with six figure shackles are suddenly all able to manage their burdens. This is why I wasn't excited, for one second, when Barack Obama admitted that this was, indeed, a "crisis." Did he not commit to dedicating the remainder of his office tenure to eradicating this problem? We all applauded him and stood down for a few months and yet nothing has changed.

Michael Crow, the president of my Alma Mater, Arizona State University, recently sent out a mass E-mail in which he was thrilled to announce that the school was about to embark upon a $210 million project to renovate their already profitable Sun Devil Football Stadium. This is coming from a school that cries, every year, that they're about to go broke and therefore must exponentially increase their tuition once again. When I graduated in 2010, my tuition was $3,000 per semester as a full-time, in-state undergraduate. As of 2013 (3 years later) students were paying $5,000 per semester. Again, tuition raised over 50% in just 3 years. So I guess it is perfectly acceptable to bury kids in a lifetime of debt as long as your fans can be provided with an "outstanding game day experience," right? Is this a school with a football team, or a football team with a school?

Here is the letter that has caused me to lose sleep for the last few nights:

Sun Devil Family,

Tonight, Arizona State University is pleased to introduce an exciting future for one of its most iconic and visible facilities, Sun Devil Stadium.

Since its opening in 1958, Sun Devil Stadium has been the site of many of our university's most historic and memorable moments. Generations of fans have enjoyed the excitement of Sun Devil football while millions of television viewers across the country have been introduced to ASU with Sun Devil Stadium as the backdrop. In addition, our stadium has welcomed national and international dignitaries, hosted legendary performers and celebrated scores of ASU graduates.

Sun Devil Stadium continues to serve ASU well, but to continue our football program's momentum and provide our fans with an outstanding game-day experience, we are set to embark on a $210 million renovation project that will require an "all-in" approach from university administration, Sun Devil Athletics, ASU football and our extended university community.

I am fully committed to this project and ASU is prepared to make its largest financial investment in the history of the institution to provide the essential infrastructure changes needed in the stadium. To complete the project, we are launching a $50 million fundraising effort to help make Sun Devil Stadium a top-tier sports facility that is a point of pride for us all.

To learn more about our plans, please visit More information will be shared at a town hall meeting in the near future, so look for an invitation in a few weeks.

I hope you share our enthusiasm as we undertake this new and exciting chapter for Sun Devil Stadium. Please know that your longtime and enduring support of ASU is appreciated, and we look forward to sharing our progress going forward.

Michael M. Crow

Anonymous said...

With 75 to 80 percent of students attending state programs, the states have a huge role to play in student affordability. Unfortunately, with many/most states shifting to a high price/high aid model, students and parents are put off by the sticker price, even if very few actually pay it.

More importantly, state funding for postsecondary education has been squeezed out over the past few decades by medicaid and other state priorities. State colleges in many cases have been asked to become more self-funding, which means more from the federal government in Pell Grants and more from students and parents in cash tuition, loan debt and donor contributions.

I'm not hearing from Cryn or others that the state legislatures and governors are considering shifting back to covering significantly more of the student's college costs. We at least need a legal and binding commitment from the states limiting how much they can shift to the student.

One reason the states don't want to be transparent is that many of their institutions, similar to the private non-profit institutions, are taking money from the full payers to use for financial aid for needy students. Unfortunately, there is also a lot of so-called tuition discounting for non-needy students as part of enrollment management. I think, Cryn, that the need-based aid is legitimate but the tuition discounting should be eliminated through simply reducing sticker price -- which will make the process more transparent for students and families.

Will we ever get back to twelve dollars per credit? No. Nor should we, due to the worsening of American inequality over the past three decades. It would be extremely costly and wasteful to return to a situation where the one percent is paying the same price for college as the child of the coal miner or waitress. The amount of that subsidy to the one percenters can instead be used for need-based aid.

Anonymous said...

As a woman in her 30s with a husband in his 40s and a combined student debt of just under have a million dollars, it frustrates me to no end when proposed solutions address only future students. YES, we need to be proactive, the way that society should have been proactive for us. The truth of the matter, however, is that the people who are in a REAL crisis right now are the people who have already graduated, been out of college for 10-20 years and still can't buy homes or cars or start families because they're so crippled by the costs of their educations. Hell, I consider it a good day when I can put 3 meals on the table.

When is someone going to address the crises of current debtors? Warning future students of the dangers of student debt is not going to make my loans easier to repay! We were homeless for the better part of 2013. How much worse does it have to get?

I am so very tired of our crisis falling on deaf ears. The only reason I come back to this blog time and time again is because I feel like there is someone out there who actually gets it. Thanks, Cryn. Here's to hoping that one day, our country will be entirely free of debt slavery.

Anonymous said...

@7:23 Schools will stop spending lots of money to renovate their football stadiums and jacking up tuition to pay the bills when young people quit buying their shoddy over-priced product. Community colleges generally lack athletic programs, dormitories, and student recreation facilities. If you don't want to pay for things like stadium renovations and rock-climbing walls go there.

Cryn Johannsen said...

@Jan. 28th - this is a good point. However, in order to be considered for most employment in this country, you must have a BA, and that means you have to attend a school that pours unnecessary funds into stadiums, overpriced dorms, glitzy workout facilities, etc. So, sadly, people don't have a choice. Instead of placing the blame on the students, let's turn our fingers towards the institutions that do these things, and also take a look at the lax form of regulation that allows for it to happen.

Anonymous said...

Cryn, there are plenty of well paid jobs that require only an associates degree. You can read more about that here:

A BA is a luxury good that an increasing number of Americans can no longer afford.

Anonymous said...

January 29, 2014 at 12:37 PM,

I checked your website and it is as I suspected. In theory, people can competently execute the skills required for these jobs with associates degrees and probably even less (i.e. on-the-job training). However, the problem is that the market has become so flooded with credentialed professionals, one must have the BA/BS to compete with other job applicants.

Let me use nursing as an example. I worked in the field for 8 years in many different settings and states, so I'm intimately aware of the profession's inner workings. Yes, you can technically become a licensed RN with only a 2 year degree. However, once the public heard the term, "nursing shortage," everyone and their dog enrolled in nursing school. The community college route is obviously the most cost-effective and many pursue it in the interest of saving money but the problem is, with the market flooded, the AAS is no longer enough. Positions once filled by 2-year degreed nurses are now requiring 4 year degrees + experience, simply because they can. The application pool has become an employer's candy store. They can set any requirement they want and pay as little as they feel because someone somewhere can meet the standard and is desperate enough to accept the pay.

This brings me to my next point. The salaries cited on the website are deceptive. The RN salary of $65,470 is reflective of a mid-career, 4 year degree holding nurse, not of someone with a 2 year degree. While I understand that the source of this information comes from the BLS, the real-world reality is not so pretty.

I happen to be closely connected to people in other professions that are listed on the website: sonographers, dental hygienists, radiology technicians, physical therapy assistants, mechanical engineering technicians and nuclear engineering technicians. I am telling you, these salaries are highly exaggerated and it is nearly impossible to enter most of these professions without a 4 year degree. To be fair, I have a cousin who just finished radiology technician training. She was able to find a job with her 2 year degree, but she is making $13/hour, which is a far cry from the listed $54,620.

I would like to tell you that I appreciate your willingness to civilly discuss this matter rather than leaving rude, uninformed comments. I approach you without confrontation and thank you for your perspective. The reality is that our system has morphed into a society of highly regulated professions to a point where it is literally a pay-to-play scam that must be engaged if one is to survive. Young people's financial (and resulting social, physical and mental) lives are destroyed and they spend them, many times to the grave, trying to repay something that is designed to not be repaid. Too many bad people in high places profit handsomely from this scam for anything to change. We tell our representatives that we're dying out here (literally), but the banks that hold our loans have the deep pockets to lobby and pay off our politicians (using the money we gave them), so our cries fall on deaf ears.

When did our country decide to condone pyramid and ponzi schemes? Why are we okay with this? For the life of me, I cannot understand it. I feel like I'm the one taking crazy pills because it is just too ridiculous and unfair to be true in the Land of the Free. It is quite literally debt slavery disguised as opportunity - opportunity that does not really exist.

You are correct in saying that the BA/BS is becoming something that few can afford but I would argue that it is no longer the "luxury" it once was; it is now a necessity that is so financially difficult to tackle, that young people are gambling their very futures to obtain them. Not because they are rare, but because they are the tickets necessary to earn a livelihood.

Anonymous said...

I understand that the salaries listed in the article are median mid-career salaries, not median starting salaries. That $54,620 figure is how much your cousin can reasonably expect to earn after she has worked as a radiologist for like 10 or 12 years. I know the job market has been bad these last few years. I don't think a BA is as important as you think it is. Everything I read says that, while people w/o any post-secondary education generally do badly in the job market, people w/ associates degrees and certificates do nearly as well and sometimes better than people w/ 4 year degrees. You can find some interesting information about that here:

I think people keep going to the overpriced four year schools w/ the newly renovated football stadiums and the rock climbing walls in the student rec center because they enjoy the traditional residential college experience. Then when they finish they blame society for their decision to mortgage their future for what amounts to a four year party.

Anonymous said...

January 30, 2014 at 12:07 PM,

Your perspective is entirely logical and I can certainly see what you are saying. I actually have a brother-in-law who happened to get lucky getting a job with the city that didn't require a degree (to be clear, he DID have a connection which obviously helped - gotta love nepotism!). Despite not having the credential, he has been able to move up the chain and while he isn't exactly rich, he's able to support his family and he has no debt, other than the mortgage that he was able to qualify for thanks to his lack of student debt. It is true - there ARE exceptions. There always will be.

Honestly, I wish I would have had that opportunity and could have forgone the university route. I made some serious mistakes. I was young and working graveyards as a nursing assistant (making about $10 per hour), which is a very physically taxing job. I was exhausted and I needed to get out. I tried getting jobs in other fields but nobody wanted me because I had been a CNA since high school. I had no problem getting hospital jobs so it seemed at the time that I had pigeon-holed myself into nursing, even as a very young person. I saw college as an opportunity to still be able to help patients, but to do so with fewer backaches and body strains. I reasoned that if I could be the RN charting and passing out the medication rather than the assistant lifting people and wiping behinds, maybe I could continue this work for years to come.

My situation was different than the partying types. As I said, I worked graveyards and went to school during the days. I took as many online classes as I could so that I could try to get some sleep at some point. I was also on my own. I did not have time to party. Like I said, I went to Arizona State. It is allegedly the most reasonably priced university in the state and the only one that was near me and my work. I didn't choose it for the football stadium - I actually hate sports and think they have no place in higher education. It seemed like the best option at the time. I was doing everything I had been taught to do and I was proud of myself.

I agree with you - there ARE students who blow their student loan money on alcohol and the "high life." It's unfortunate, but after decades of this kind of thing going on, you'd think some full-grown adults in the system; the universities, the loan officers, the DOE, SOMEONE would have said, "Wait a minute, these kids aren't mature enough to handle these loans - they are not able to foresee the future consequences of their actions. Rather than exploiting their innocence and allowing them to destroy their futures, maybe we should loan money the way we loan it to car and home buyers - based on the likelihood of their ability to one day repay it."

They don't think this way, of course, because they have paid off congress to bend the laws in their favor. If a student defaults in the future, the loan company is allowed to tack on a literally unlimited amount of penalties (sometimes increasing balances over 50% overnight) AND they make money doing it. It's in their best interest to irresponsibly loan your tax dollars to people who probably cannot pay it back.

The whole system is a disaster and you and I and the rest of the country should be angry about it because whether or not we went to college, we're all going to end up paying for this scam. Sure, some teenagers/young adults have made some terrible choices, but I think the greater blame should be attributed to the people who knew better. I'd much rather use my money to bail out someone who made some mistakes as a kid than bail out a bank who deliberately behaved unethically for decades and lost money as a result of their greed.

Again, you are an incredibly delightful person. I hope you'll continue to come back here and have these conversations with us. Thank you for your civility.

Anonymous said...

@ 12:54 If you don't mind my asking, what is your employment/financial situation now? It sounds like you did everything right.

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Anonymous said...

@ February 1, 2014 at 12:49 AM,

I apologize for the delay in my response. Despite doing everything the "right way," I still ended up heavily in debt. As a full-time CNA, I earned anywhere from (if I recall) $6.50/hr (my first job) up to roughly $10/hr (my last CNA job). It was tough to make it on my own. Since i was not married and did not have children, I didn't qualify for grants. I was under 24 and had to report my parents' income on my federal financial aid forms, even though they never contributed a dime to my education. Therefore, my FAFSA showed that I could expect a ridiculous "family contribution" that I never enjoyed so again, no grant qualification. I maintained a 3.85 GPA, but since I did not belong to a minority group, I did not qualify for most scholarships. In a nutshell, I had to take out loans to afford my tuition, fees and books. Oh, and I think I used the money a couple of times for car maintenance and groceries when times were extra lean. I know people tend to criticize students who have cars. I needed it for work and school. Like I said, I worked graveyards. Buses do not run all night (sometimes you are on-call on your days off and can get called in at 2,3,4 a.m.) and taxis are absurdly expensive.

I am not trying to make anyone feel sorry for me. These are just the facts.

Right now, my husband and I are barely getting by. I'd tell you our monthly student loan payments, but you wouldn't believe me (suffice it to say we could be living in a very nice home for what we're paying on student loans every month). We're at a crossroads where we need to decide to either throw caution to the wind and have children or not have them because if we wait any longer, it'll be too late. The only thing holding us back is the student debt. We're approaching middle age. We live in a 1 bedroom apartment and have 1 car between us.

Does that answer your question? It's crazy. Just crazy. Again, I wish I would have known. I'd give up my degrees if it meant that I could be debt-free, but I made some mistakes as a very young person and as much as I wish I could take it back, I can't. Some bad people who knew better set it up so that after they had conned me into believing that college was the "responsible thing to do," it was actually a trap with no way out. Now I, the other 40 million student debtors and everyone else will have to pay. It isn't fair for you or for me or for anyone else, but that is where we find ourselves today. :( I'm sorry. I really am.

Chris said...

I am always amused when nobody mentions the elephant in the room: emigrate. The USA and its student loans will be unenforceable in any other jurisdiction.

Cryn Johannsen said...

@Chris - we have discussed emigration numerous times here. Have you done that? If so, I would appreciate you sharing your experiences with us. Thank you!


High Arka said...

To return to the second Anonymous' lament, a more obvious solution is that we could stop watching football games. Turning off the television for good strikes a powerful blow to the financial and educational scams that we all hate so much--and yet, most of us keep watching our favorite shows, and participating in mass media entertainment culture, funding the same vultures we say we have a problem with.

Look at us, now, even, using Google to communicate, rather than speaking in person with the other living, breathing human beings who share this planet. Until we're willing to stop pumping attention into all these trinkets, we'll continue empowering those who rob from us.

John Peter said...

As a lady in her 30s with a husband in his 40s and a combined student debt of slightly below have 1,000,000 bucks, it frustrates American state to without stopping once projected solutions address solely future students

Anonymous said...

Here's a fun fact:

If you thought that part-time, minimum wage jobs for people with graduate degrees wasn't bad enough... employers are now scheming their way out of paying employee taxes...

I have a master's degree with a whole lot of work experience. I was just hired a month ago for a part-time customer service job paying $8.00/hr. (No, this is not enough to live and pay my student loans but I took it because some money is better than no money).

It was not disclosed to me until the first day of work that I would be required to consider myself an "independent contractor." This means that the employer has no tax obligation, but gets to write me off as a business expense. Secondly, it means I pay the portion of the taxes that the employer should have had to pay.

I spoke to an accountant. I have to pay federal self-employment tax + regular federal taxes + my state's taxes. Since I'm married, I have to pay the tax rate of my pay and my husband's combined.



Let's not forget that I have the fun of now having to make estimated tax payments 4x per year.

Before you tell me I can write off my office space, my phone, my internet and my computer... I spoke to my accountant. She said that since I'm an individual and not a big business making big money, I'd be guaranteeing myself an audit if I attempted to write off anything.

So I guess they don't even want to pay us minimum wage anymore.

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Anonymous said...

One of the most uncomfortable things about the student loan crisis is that so many of the people affected and in misery are aligned politically with the Left. This group is of course largely correct in thinking that the Right will not be of any particular help to them. But what they miss is that the policies of the Left is what has put them in their misery. Doubt what i say? The academic industrial complex votes Democratic to the tune of 90%. They live largely comfortable, insulated lives immune from the vagaries the labor market in a way private sector employees can scarcely imagine, with the exception, of course, adjunct personnel, who are also big carriers of debt and who get terrifically exploited, all for the benefit of the industrial academic apparatchik leftist class.
It is so difficult for someone raised to think of the evil right wing capitalists as the problem when indeed it is the progressive Left, acting in concert with an every yawing and outsized government, who finds it so easy to live comfortably off of the backs of students, err...student loan conduits. Yes, I get that people want loans dischargeable in bankruptcy and so on, and I concur that at some point the student loan debt problem will become even more monstrous where that will happen. But the Government needs to quit subsidizing the activity to the point where it has grown and fed on students. Severely cap the amount of federally backed loan money, subject those caps to very reasonable terms with no hidden fees or punitive interest accruals, and let the tuition market rationalize to where prices are cut by 70% or more. That is the solution. There is no way that Democrats will do this - the progressive academic elite is influential - but that is the answer. These are not easy things to discuss.

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