Attorney General Jim Hood has filed a lawsuit against student loan lender Navient alleging “widespread abuses across all aspects of its student loan business.”
Just last month the attorney general of California filed a similar suit. Prior to that, a handful of other states had taken related action against the student loan management corporation formerly known as Sallie Mae. With some $1.5 trillion in student loan debt nationwide, expect to see more states getting involved in the lawsuits.
The lawsuits may or may not be successful, but they simply deflect blame. Neither Navient, nor any other student loan provider, is responsible for students not being able to pay back their loans.
For a few decades now, the belief that every child must attend college has been pushed on students from the moment they enter kindergarten. If you want to be successful, you need a college degree. Any degree will do, just get a college degree the message went.
And for students who were unable to pay for the rising cost of a college education, the government was there to help. By guaranteeing student loans, lenders are at no risk when students take on a loan; just the taxpayers. No 18-year-old, without any collateral, can walk into a bank today and ask for a $100,000 loan so he or she could get a degree in…something. But that is what taxpayers guarantee every day with student loans. At very low interest rates.
As a result, colleges annually raised their tuition, fees, and other expenses, just because they could. When you are receiving student loans, it is as if you don’t see the money. It just passes through like monopoly money and you often don’t realize how expensive everything is. Or how much it has gone up year-over-year.
Colleges can do this because there is no incentive to do otherwise. They gain nothing by lowering their prices. The government has created an incentive to raise tuition without any fear of repercussions. And colleges and universities, for the most part, are only growing.
Unfortunately, student loans are just another area where the government gets involved with noble intentions. This time it was to help people pay for college. But as a result of government involvement, college became a lot more expensive and a college degree lost value.
Of course, part of the reason a college degree may not have value is because of the degree you receive. It seems all too often that those who complain the loudest about their student loans, while asking the government (i.e., taxpayers) to forgive their loans, are those who have degrees in fields that have no application in the marketplace.
Education is valuable. But it is only valuable if your degree prepares you for a career field. And if somebody else actually cares about that field. Too many degrees simply prepare students to be professional baristas at Starbucks.
In a free market society, personal responsibility is imperative. That means you need to decide if college is or isn’t right for you. And don’t just do what the world says. Maybe you’d be better off in trade school. Maybe you start out in community college for two years, where tuition will be nearly free. These are choices everyone should make before enrolling in college.
But in the end, each individual is responsible for his or her actions. And that includes signing your name on student loans. Because lenders aren’t going to stop giving out student loans as long as the government is guaranteeing those loans.
Sarah Ulmer
