Why I Defaulted on My Student Loans

No, but the guy's default (after gladly accepting loans to acquire an undergraduate and two Masters degrees) certainly isn't justified by declaring that the student loan system is "a social arrangement that is legal, but not moral."

 

Bankruptcy isn't morally dubious behavior? He didn't walk away from debts there? What was the point of the bankruptcy then?

You, too, are awesome.

It's the way the world is now. People look at the agreement and the consequences, and if the consequences are something they can live with, it's their right to do it. It happens every day in the banking industry, where, I don't know, currency manipulators get away without prosecution. It happened when they played the mortgage game, and there probably has never been a clearer example in all of American history of people selling something they knew was bad -- the textbook definition of criminal fraud. It happens every day in the corporate world where companies pull inversions -- that is highly immoral in my opinion, yet legal.

The only people whose misbehavior you ever seem to have a problem with are poor people.

 

Play it out this way, Ragu.

Guy looks at his mountain of debt and decides not to pay it.

"You have to."

But why?

"Your credit will be ruined."

OK, I'd rather have the cash than the credit.

"But you have to."

Will I go to jail?

"No."

Will I be stay employed?

"Yes."

Can I afford the life I want without that credit?

"Yes."

Then why would I keep paying that bad debt?

"You have to."

Or what?

"You'll be a bad person."

And?

 

Don't forget that it will retroactively alter his intent at the time of signing. That's not an insignificant factor here.

 

He agreed to either pay it back or suffer an established set of consequences.

 

The debts of Donald Trump (corporate) could be at least partially settled from the funds of Donald Trump (individual). Yet they aren't.

We could go beyond Trump and start listing dozens of corporate bankruptcies that didn't touch the individual holdings of the billionaires at the helm.

As I said, it appears your main beef with this writer is that he didn't funnel everything through an LLC.

 

Then he got three degrees, then he discovered he wasn't sufficiently skilled in his craft to earn enough to repay his loans, and then he wrote an op-ed piece for the NY Times in which he tried to portray his actions as justified because he had reached the conclusion "the social arrangement" is immoral.

 

Yep. He got over on the system. Good for him.

I'd never want to live like that. I like knowing that basically I can buy whatever I want whenever I want, at the middle-class/upper-middle-class level. (Sorry to spoil the fantasy, Ragu!)

But I know people who live or have lived like this, particularly after the mortgage crisis. The scolds would have been telling those people they owe it to society to chase that underwater mortgage. Instead they walked away, rented, worked and saved, got their kids to and through college, and are now living the good life. As long as they can find a little bit of credit until they die, they'll be all right.

"Moral hazard" understandably ranks low on their list of day-to-day concerns.

 

It amuses and yet saddens me at the same time to find so many people here who seem to be arguing that it's OK to just quit paying your debts because you just don't feel like paying them anymore.

 

What was your opinion when Brian Kelly decided he didn't feel like coaching Grand Valley State any more?