An Insider's Look at Mormon Culture

Student Loan Bondage

Our daughter Aroo finds her job as a financial aids officer at a community college frustrating. Students visit her office seeking money for college—first step toward getting a good job and living the American Dream. Unfortunately, many of her applicants miss the steps that come between filling out the loan forms and getting that good job. Aroo has actually had students whose grades made them ineligible for further loans tell her they didn’t understand that E grades were failures. “In high school they give you Fs if you fail,” one student said.

When I was teaching Freshmen Comp at SUU in Cedar City, Utah a few years ago, I assigned an essay about student loan defaults to my students. The essay suggested testing applicants and evaluating their chances of academic success before granting loans. My students were appalled at the idea. “We can’t afford to help our kids,” a non-traditional student said. “If they didn’t pass the test, they’d never be able to go to college and get a good job.” I refrained from asking this mom how her kids would graduate and get good jobs if they couldn’t pass a test evaluating their likelihood of graduating.

Aroo tells me it’s not uncommon for community college students whose tuition is about $1300/semester to rack up $18,000 in debt before getting an associate degree. Helping them fill out the living expense section of their forms, Aroo lists tuition, books, food, housing, and transportation. “But you didn’t include my phone bill,” students often complain. “No, a phone is a luxury, not a necessity. You don’t want to borrow money for luxuries,” she tells them. She lists the price of a bus pass for transportation, and the students object. “I’d have to transfer if I took the bus.”

Unfortunately, Aroo has no authority to limit loans to necessities, and most students borrow to the hilt—even when she warns them that these loans are exempt from bankruptcy. Borrowers are bound to student-loan debts—with or without graduation and a good job—until the debt with interest is repaid or they die–whichever comes first.

Recently, our server at a local restaurant identified herself as one of my former 9th grade students. Now in her 20s, Shelly told me she has graduated from Utah State with a major in photography. She invited me to a show of her work and mentioned that she also waits tables at another restaurant. Now, I have nothing against majoring in photography, interior decorating or clothes designing—if a person doesn’t have to borrow money. But Shelly is working two jobs to pay off loans for a degree in photography unlikely to result in a paying career.

At this point rules for guaranteed student loans are heavily tilted to benefit banks making those loans.  Rules against loans for majors in subjects for which the chance of gainful employment is slim would help. Limiting loans to accredited state institutions would also keep young people from signing up for private cosmetology or massage therapy schools that charge over $20,000 a year tuition. Most courses offered by for-profit schools are available at community colleges and state and county technical schools for a fraction of the cost.

Sure, 18-year-olds should be wise enough not to take on debt that will enslave them for the rest of their lives. But laws and rules to protect the unwary from being preyed on by the unscrupulous benefit everyone. People forever stuck in minimum wage jobs to pay off loans that were too easy to get hurt us all. Hopeless poverty has huge social costs.

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