Dear Hypocrite: An Advice Column
“Dear Hypocrite” is a monthly advice column, with questions answered by a rotating cast of hand-picked counselors. Got a problem? Send it our way: hypocriteadvice AT gmail DOT com. Discretion guaranteed.
I have been considering defaulting on my student debt. Should I do it? Will it do good? Will it do direct harm to a bad system? Or is it just self-aggrandizing and myopic? I have okay credit right now.
Any information and advice is appreciated.
First of all, congratulations on the credit.
I cannot emphasize this enough: if you can possibly avoid it, DO NOT MAKE THE INDIVIDUAL CHOICE TO DEFAULT ON YOUR STUDENT DEBT. With all due acknowledgements to readers from Greece, Spain, or any other countries struggling under the European Central Bank, IMF, and co., there’s hardly a creditor in the world more willing -- and legally empowered – to pursue you to the bitter end than the U.S. Government.
If you’ve even considered defaulting then I’m sure you already know all this, but it bears repeating: student-loan debt collectors are a bloodthirsty lot. Late fees, mounting interest, and third-party collectors’ fees will make your balance due skyrocket, and meanwhile, the government will aggressively garnish your income, whatever it may be – wages, non-wage income such as grants, tax returns, disability checks; even Social Security, which makes it alarmingly clear that the law expects a lot of us to still be paying off our undergraduate tab when we’ve reached our sixties. This isn’t small change, and unless you’ve discovered the Fountain of Eternal Youth and never plan to have an unexpected medical bill, it can wreck your life. Bankruptcy offers no relief, either: a bankrupt ex-student has fewer options to discharge their debt than a bankrupt pathological gambler does theirs (though it must be said that American millennials’ haunting debt burdens have yet to produce any deadline-fueled literary masterpieces worthy of Dostoevsky’s Gambler, which is a generational failing we have yet to acknowledge).
As for whether it harms the system, the White House consistently projects a recovery rate of above 100% from Stafford Loan defaults – in other words, the government expects to turn a profit from defaulters. And with all that power to garnish income, how could they not? (If you factor in private collectors’ costs, then the government’s return rate drops below 100% - it’s no longer so high as to be outright profitable - but it’s still vastly higher than expected returns from defaults on practically any other kind of debt in existence.) Any blow you might strike against the system in this way would be entirely symbolic, the significance of which your creditors would be unlikely to appreciate as they siphoned up all your money.
If you were being pushed into default by personal hardship – which happens to many – I’d tell you to put together a defense strategy and call your collectors immediately to explore loan rehabilitation or consolidation options. But it sounds like you’re contemplating default as a political statement instead. Is that, as you put it, self-aggrandizing and myopic? Maybe or maybe not, but it’s profoundly ineffective.
In a country that can’t bring itself to even slap a financial penalty on most of the middle-aged bankers who drove the world into crisis seven years ago, the student loan system’s asphyxiating, authoritarian extraction of money from the rest of us is an apt but unsettling figure for the age of austerity. Is fighting that system your goal? Then there are some other avenues worth pursuing.
Defaulting might even have a role to play as part of some really well-organized mass debt strike – but it’d have to involve a lot of us, enough to be statistically significant, and it’d have to be a lot more public and involved than “a bunch of people going into default at the same time”. But it can happen. The Debt Collective just pulled off a successful and debt strike by former students of Corinthian Colleges, culminating in actual debt forgiveness from the Department of Education, to a totally unprecedented extent. While there are reasons not to generalize from that particular case – the debt forgiveness came because Corinthian had explicitly defrauded its students – it does tell us that debt strikes can be effective in the right place and time.
Otherwise, though, I’d recommend we all focus on the shadowy underside of debt: tuition. The fact that higher education is a commodity, and the competitive nature of the education market, has buoyed tuition higher and higher; so has the fact that colleges have taken on more and more responsibility to care for their students as the economy and the social safety net crumble further into dust with each year. To banish student debt, we need free education. Voting for Bernie “free public education” Sanders would be a start, but our efforts shouldn’t end there. The point needs to be made, publicly and often, that the government is already subsidizing higher education, public and private, on a massive scale – that’s literally what student loans are! So there must be a way for America to make education publicly affordable without ruining students’ lives in the process. Logistics and practicality aren’t our obstacle, the system is, so let’s drum up some political pressure.
If defaulting in protest even crossed your mind, then you’re obviously willing to endure some discomfort for the sake of pushing back against the system. My advice: start by organizing your friends.
"Happy Birthday!" Photograph by Rebecca Rau
My grandmother lives pretty near me, but I don’t have a car and it takes me a couple hours in transit to go visit her (four hours round trip). For the past year or so she’s been trying to be less dependent on an anti-anxiety drug and it’s been making her anxious (duh). Because of the anxiety, she has trouble sleeping if she knows she has a big day the next day. A few times I’ve made plans to go see her, and she’s gotten so anxious about the visit the night before that she can’t sleep and has to cancel the visit in the morning, including one time when my girlfriend had specially gotten the day off from work for the visit. As a result, my grandmother has asked me not to let her know when I’m coming to see her until the morning of my visit (at which point she may have made other plans). But she often sends me emails and leaves me voice messages saying she misses me and asking me to come visit. I’m busy for a little while, and I’m not free to go see her for a couple of weeks. I feel stuck: I can’t write back saying I’ll visit her soon, because that’ll make her anxious and she’ll have to cancel the visit yet again. But I feel terrible continuing to ignore her emails and voice messages, or only responding vaguely. I’ve brought up the problem, and she says she knows it’s inconvenient but it’s the only way. This catch-22 is seemingly endless, and as a result I haven’t gotten to visit her in several months. The whole affair has been making me feel guilty and angry, and she has no perspective on how what she sees as her suffering has an adverse effect on me and her other loved ones. Talk about anxiety! I have really come to see that the ability to make and keep simple plans is the mark of a sane person! What should I do?
This indeed sounds like a conundrum. To frame the situation in slightly callous terms, your grandmother is making two demands on you – do visit me, but don’t tell me when you plan to! – that can’t be practically reconciled.
In fact, they’re so contradictory, and their result – you feeling guilty and unable to visit – is so foreseeable, that I can’t help but suspect her of being aware, on some level, that this would happen. Maybe she feels lonely, and is testing you to see whether you’ll still want to visit her even if it involves tremendous inconvenience on your part, or means that you trek out to her even if she doesn’t have time for you. Or maybe she misses you, but is also afraid of seeing you, whether because of anxiety or for some other, more specific reason (though I don’t doubt that the two of you have a warm and loving relationship).
She’s elderly and has anxiety, which means you’ll have to be relatively more flexible than her, probably no matter what. But in the long term, it’s clear that this arrangement isn’t sustainable. Some kind of renegotiation needs to take place over how to handle future visits, and in my experience, that kind of conversation is best had face-to-face. You say that your girlfriend had to get the day off work to go visit, which implies that you’ve got a more flexible schedule than your girlfriend does: one of these long summer days, bite the bullet and make an unplanned-til-the-morning visit to your grandmother. If she’s not there, leave a card or a note, which will show her you care and may make her more aware of inconveniencing you. If she is there, then sit down with her and talk things out.
Yours in sanity,