student loan argument

Student Loan Advocates and Borrowers have a Message Problem

Michael Lux Blog, News, Student Loans 2 Comments

This week the Washington Post ran a story about one woman’s struggles with student debt and her fears about the possibility that the Public Service Loan Forgiveness program might one day be eliminated.  The article itself was rather unremarkable in that it told a fairly common student loan story faced by many borrowers.  The comments, however, were both alarming and illuminating into the viewpoints held by many Americans not currently paying student loans.

According to one commenter:

“She made her decisions.  Let her live with them.  I’m tired of 50% of my income going to support people like her.”

Added another:

“[S]he is morally obligated to pay off the loans.  If her loan is forgiven, why should I as a taxpayer be on the hook.  I got a state university education because that is all I could afford, so I really don’t what to pay for her private school foo foo degrees.  She can still get a higher paying job.  I hope she gets her head out of the sand and starts living like a grown up.”

These two comments are representative of the more than 4,000 comments that the article received.  They are also representative of how many taxpayers view the student loan crisis.

The Message Problem for Student Loan Advocates an Borrowers

The subject of the Post article is worried she won’t be able to get PSLF.  Many readers see this from only a taxpayer perspective and conclude that, I shouldn’t have to pay for her college.  The issue is being framed wrong by borrowers and advocates.  Students working towards PSLF have a deal with the government.  The government agreed to forgive certain student loans if people agreed to work in public service for at least 10 years.  Many started careers in public service based upon that promise.  They made decisions that cannot be undone.  Now the same US Congress that created this deal is thinking about backing out of it before it has to live up to its end of the bargain.  How is that fair?  

Making the discussion about basic fairness helps people have an easier time understanding the perspective of student loan borrowers.  Most everyone has a basic understanding of what is fair and what isn’t.  Individuals, companies, and the government should be held to the terms of the deals they strike.

The Post clearly set out to tell the story of an average borrower with legitimate concerns about her future.  Unfortunately, the way it was presented left many people with the impression that the subject of the profile, and other student loan borrowers, were undeserving of the government honoring the terms of the original deal.

An Issue In Living Rooms Across the Country

This issue is not confined to the national media.  The 30 million plus Americans who have student debt need to take a second look at how they communicate student debt grief with their friends family and colleges.  Telling people how hard things are won’t change minds.  Everyone has challenges and everyone has bills.  Many people are incapable of offering any sympathy for financial woes.  The key is to focus on how unfair things are.  Student loan servicers say one thing than do another.  Some colleges make grand promises about jobs and future salaries, but fail to deliver.

If the argument for addressing student debt is about the hardships faced by borrowers, nothing will be done.  The fact is groups ranging from the homeless to military veterans are facing much greater hardships.

The argument for student loan reform needs to focus on the fundamental unfairness and corruption of the system.  For-profit colleges and lenders like Sallie Mae are making a fortune off the hopes and dreams of young people in this country.  Many students are duped and stuck with a lifetime of debt to show for it.  If the discussion is about holding large corporations and the government accountable for their promises, borrowers will garner far more support.

The Message Problem Applies to More than Public Service Loan Forgiveness

The same arguments used in opposition to Public Service Loan Forgiveness are used in response to proposals to restore bankruptcy protections to student debt.

Here again, arguing that borrowers are struggling will not convince people.  The discussion needs to go back to fairness.  Why are people able to declare bankruptcy if they get in over their head on mortgage, business, or credit card debt?  If businesses trying to further themselves and the economy get this protection, why shouldn’t students who are doing the same thing?

Why is it that a billionaire real estate mogul is able to declare bankruptcy when his casino loses money, but an 18-year-old whose college debt didn’t pay off doesn’t have the same option?  How is that fair?

Bottom Line

Student loans are a real problem in many homes.  Convincing both the public and the powerful that student debt needs to be addressed on the national level requires more than just showing financial difficulty.  Borrowers have been wronged in many ways, and that is the argument that should be made.

  • dougm

    It is frustrating when the rules change. Unfortunately, there are many examples of that. For example, people have paid into Social Security for decades and now there are rumblings about reducing benefits. Those counting on full benefits at 65 are being bumped up to 67, with talk of 70. A number of Enron employees saw six-figure 401(k) balances wiped out. We have been told over the years that we should not depend on SS; that we should diversify our investments—including 401(k) accounts. I would not be surprised that at some future date, our politicians decide that distributions from a Roth are taxable. Remember when we got to deduct interest on auto loans and credit cards? That changed in 1986. The result was a shift to home equity loans. Now, those deductions have been eliminated in 2018. If people are borrowing money to attend expensive colleges, they should be smart enough to figure out that rules can change. They should have taken an approach where loan forgiveness might be in the cards, but don’t bet the farm on it. They should have planned to pay their loans off, and if they end up benefiting from forgiveness, it’s a bonus. I would advise those with Roth accounts to take the same approach—if they get tax-free withdrawals at retirement, it’s a bonus. Otherwise, consider them to be regular, taxable accounts. Financial rule #1: Don’t count on the government. Rule #2: Expect rules to change. Rule #3: Never borrow more than you can afford to pay back, even if you think somebody else (government, parent, employer, spouse) is going to pay it for you. Why See Rule #2.

    • I couldn’t agree more with regards to not being able to rely upon Social Security. I hadn’t thought about the Roth rules changing, but I suppose it is a possibility.

      Even if smart financial planning dictates not relying upon government policy, does that justify Congress going back on its word? I feel like we as citizens put up with way too many lies and deceit. Shouldn’t we demand more from our leaders? Expecting some accountability for the promises they make isn’t exactly setting the bar high.