The College Fix

The Huffington Post has an article out about the little-talked-about link between student debt and suicide. It contains some wrenching anecdotes:

One evening in 2007, Jan Yoder of Normal, Illinois noticed that her son Jason seemed more despondent than usual. Yoder had been a graduate student in organic chemistry at Illinois State University but after incurring $100,000 in student loan debt, he struggled to find a job in his field. Later that night, Jason, 35, left the family’s mobile home. Concerned about her son’s mood, Jan Yoder decided in the early morning hours to go look for him on campus, where a professor she ran into joined her in the search. The two of them discovered his body in one of the labs on campus and called campus police at 8:30AM. 32 minutes later, Jason was declared dead due to nitrogen asphyxiation…

And if you thought $100,000 sounds rough, consider the story of 47-year-old John Koch:

Koch originally borrowed $69,000 in 1997. The majority of that money was loans for law school, seemingly, he says, to “better myself.” After he graduated from Touro Law School, Koch struggled to find steady employment and eventually he defaulted on his loans. He was immediately slapped with $50,000 in penalties. For years, he had been filling out deferment forms every six months to buy himself more time but in 2009, Sallie Mae declared him in default. At the time of this writing, Koch owes over $320,000. That sounds staggering but it’s hardly unusual. Once a person defaults on a student loan, the balance grows exponentially, with interest compounding on interest, penalties and fees. By the time he “retires,” in 23 years, Koch figures he will owe close to $1.9 million. He can’t get even sub-prime credit, he tells me, and it’s not like there’s any way out of his trap: student loan debt cannot be absolved through bankruptcy.

Koch struggles with suicidal thoughts and admits to self-destructive behavior, such as heavy drinking and cigarettes.

The less-than-sympathetic response here is to say that students who take on debt have to bear the responsibility for their decisions. While that may be true, it isn’t the whole truth in this case. There are systemic problems that need to be addressed. Questions that need answering. For example, don’t universities who constantly exaggerate the benefits of their degree programs (as if they were surefire paths to career success) bear some responsibility for false advertising?

And now that Obama has nationalized the student lending system, doesn’t our government-controlled student lending system bear responsibility for its unsound lending policies? Forking out hundreds of thousands of dollars in loans to a student without any real consideration as to whether he is likely to be able to pay back the loans, or whether the degree being pursued is likely to pay off for him–is that really “promoting the general welfare” of the nation?

The student loan crisis is a problem made of poor individual choices, magnified by poor government policies and near-fraudulent claims from the marketing departments at countless universities. Too often, colleges and universities get a free pass on this because many in our culture assume that educators are universally benevolent, altruistic and selfless “heroes.” Elite educators would never pursue their own financial interests to the detriment of young, hopeful, unsuspecting students, right?

Uh huh.

Higher ed is a business sector, just like housing and finance–two sectors that have come under intense scrutiny in recent years. And financial practices within the higher ed industry should be scrutinized just as closely. It might be a stretch to say that greedy colleges and an irresponsible lending system are responsible for student suicides. But it’s not much of a stretch to say that these problems have harmed young people gravely. Until Americans realize that, we won’t get the lending reform we need.

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