Like ladders, college loans need warning stickers

I recently read of a young woman who graduated from college with accumulated college loan debt in excess of $200,000.  I also recently purchased a ladder.

Pasted on the ladder were twelve (!) prominent warning labels.  They had three varieties of headers in red, yellow, and orange, with bold, black capital letters: WARNING, DANGER, CAUTION.  Below the headers were printed long and detailed warnings and cautions.   Who would have imagined that by climbing a ladder, one might be in danger of falling off?

But the young woman's plight — apparently, upon graduation, she became anxious about the prospect of having to repay in excess of $200,000 — made me wonder whether student loan applications carry appropriate warnings.  Given the huge outstanding collective student loan debt — Forbes reports aggregate student-loan debt outstanding at $1.5 trillion — I suspect that prospective borrowers are not being given adequate warnings and cautions.  Since the college experience is often touted as a ladder to success, yet the dangers of student loan debt are less obvious than the dangers of climbing a real ladder, student loan applications should have warning labels.  Below I hazard a few warnings as an earnest payment on what a full set of pertinent warnings would be.

WARNING: Student-loan debt must be repaid with after-tax dollars!  When you receive a paycheck, the net amount of your pay is less than the amount you earned.  Among the various "deductions" will be Social Security taxes, federal income tax, and possibly state and city income taxes.  Even at low levels of income, these taxes combined may amount to 20% of your earnings.  What this means is that for every $100 you earn, you receive only $80.  This in turn means that to pay back $100 in student loans, you must earn $125 ($125 times 80% = $100).  If you earn a little more money, the combined marginal tax rate of these several taxes can easily reach a third, and this means that to pay back $100, you have to earn $150 ($150 times 66.7% = $100).  The upshot is that you will have to earn a lot more than the face amount of your student loans to pay them back, and this is without even taking interest into account.

WARNING:  Most student-loan debt is not dischargeable in bankruptcy! 

WARNING: Persons encumbered with large amounts of non-dischargeable student loan debt may find it difficult to attract a mate!  It may take considerable charms of person to overcome the disinclination of many to marry a large amount of non-dischargeable debt.

WARNING: The "educational" services you purchase with borrowed money may have little or no value!  The median annual earnings of graduates of prestigious Bennington College ten years after starting college are $29,500.  That means that half of Bennington graduates earn less than that.  Cost of attending Bennington: approximately $54,000 per year.  Regardless of the college, unless the student is careful, the "education" received is likely to be an indoctrination into false ideologies, together with the inculcation of bad emotional habits such as resentment, blaming others, and claiming victimhood.  Habitual resentment, victim mentality, and constant anger can do more to reduce future earnings than the lack of a college degree.

A complete set of appropriate warnings about college loans would exceed in number the dozen on the ladder I bought.  Such warnings might save many young people years of heartache.

William Marbury is the pen name of a lawyer who works in the arts.

I recently read of a young woman who graduated from college with accumulated college loan debt in excess of $200,000.  I also recently purchased a ladder.

Pasted on the ladder were twelve (!) prominent warning labels.  They had three varieties of headers in red, yellow, and orange, with bold, black capital letters: WARNING, DANGER, CAUTION.  Below the headers were printed long and detailed warnings and cautions.   Who would have imagined that by climbing a ladder, one might be in danger of falling off?

But the young woman's plight — apparently, upon graduation, she became anxious about the prospect of having to repay in excess of $200,000 — made me wonder whether student loan applications carry appropriate warnings.  Given the huge outstanding collective student loan debt — Forbes reports aggregate student-loan debt outstanding at $1.5 trillion — I suspect that prospective borrowers are not being given adequate warnings and cautions.  Since the college experience is often touted as a ladder to success, yet the dangers of student loan debt are less obvious than the dangers of climbing a real ladder, student loan applications should have warning labels.  Below I hazard a few warnings as an earnest payment on what a full set of pertinent warnings would be.

WARNING: Student-loan debt must be repaid with after-tax dollars!  When you receive a paycheck, the net amount of your pay is less than the amount you earned.  Among the various "deductions" will be Social Security taxes, federal income tax, and possibly state and city income taxes.  Even at low levels of income, these taxes combined may amount to 20% of your earnings.  What this means is that for every $100 you earn, you receive only $80.  This in turn means that to pay back $100 in student loans, you must earn $125 ($125 times 80% = $100).  If you earn a little more money, the combined marginal tax rate of these several taxes can easily reach a third, and this means that to pay back $100, you have to earn $150 ($150 times 66.7% = $100).  The upshot is that you will have to earn a lot more than the face amount of your student loans to pay them back, and this is without even taking interest into account.

WARNING:  Most student-loan debt is not dischargeable in bankruptcy! 

WARNING: Persons encumbered with large amounts of non-dischargeable student loan debt may find it difficult to attract a mate!  It may take considerable charms of person to overcome the disinclination of many to marry a large amount of non-dischargeable debt.

WARNING: The "educational" services you purchase with borrowed money may have little or no value!  The median annual earnings of graduates of prestigious Bennington College ten years after starting college are $29,500.  That means that half of Bennington graduates earn less than that.  Cost of attending Bennington: approximately $54,000 per year.  Regardless of the college, unless the student is careful, the "education" received is likely to be an indoctrination into false ideologies, together with the inculcation of bad emotional habits such as resentment, blaming others, and claiming victimhood.  Habitual resentment, victim mentality, and constant anger can do more to reduce future earnings than the lack of a college degree.

A complete set of appropriate warnings about college loans would exceed in number the dozen on the ladder I bought.  Such warnings might save many young people years of heartache.

William Marbury is the pen name of a lawyer who works in the arts.