Why I Defaulted on My Student Loans

We've gone through this whole argument before, during the mortgage meltdown. "Moral hazard" was a big part of it then too as scolds tried to say people had an obligation to follow that $150K they've already lost in their house.

The people who walked away from that debt are unquestionably doing better.

 

Why does it matter what they call it?

To-ma-to, To-mah-to.

 

Yeah, but they can sleep at night knowing they were nice to Ragu's treasured 0.1 percenters.

 

I'd imagine it's the same planet where a group of traders can rig currency markets, have their employers plead "guilty" and pay a small fine, and face no real legal consequences.

 

The difference is that the student loan guy apparently entered into student loan agreements with absolutely no intent of honoring the agreement. It wasn't a case of circumstances drastically changing.

 

Not owing anything to anyone used to be a sign of good character.

Now it's the earmark of a poor businessman.

Sigh.

 

Why is that worse?

I owe student loans. Lots of student loans.

It was, undoubtedly, a prudent business decision.

I grew up lower middle class. I could have stayed that way. Instead, I guess I sacrificed character, in your estimation, for an education.

 

Correct. He spotted a loop hole in the contract.

 

"Neither a borrower nor a lender be."

I'd say the country followed that principle completely until poor people started mucking it up, yes.

 

Is this true? I don't know that it is or isn't. Honestly. But this feels like one of the ways we idealize the past that isn't necessarily the reality.

 

By the way, I'm unlikely to ever pay back the full amount.

After I started paying, Congress passed a "pay according to your income" option, in which I pay about 10 percent of my income, and after 20 years of payments, the remainder of the loan is forgiven.