I Am The Toxic Asset
This was originally posted on 2/28/12
There comes a certain risk involved with divulging one's personal troubles all over the internet where potential employers could read it and make all sorts of judgement. However without some risk, there is no return as everyone on here should know by heart. That being said, I'll take the risk to make the larger point.
I'm possibly getting sued over my student loans.
The specific details aren't what I want to get into, but know this -- I went to college, majored in finance, and after college couldn't find a finance job. I took a non-related job to just get by and got laid off right around the time those loans came due. Like Gecko said in Wall Street 2, I become a "NINJA", No Income, No Job, No Assets" and staggering student loan debt for a degree I dreamt would eliminate all of those problems even if I knew the risk that debt entitled.
High risk; high return.
Within the deep crevice of my own despair I've come to reflect on that high-risk decision with every nano-fiber of my being. To the point where I look at the world I live in and ask "why?" How many people are there who struggle with their student loans? I hear I'm not alone. I'm not the only one. It's systemic.
It's not you kid, it's your economy!
Our economy is based on people producing goods and services in order to sell to other producers. Steve produced more apples than he needs, so he sells them to bob who has more wood than he needs, which he sold to have money to buy apples. The more useful you are to others, generally the more money you find yourself having. You have the apples everyone NEEDS or more importantly, FEELS they need. Anyone who gets a college degree understands this on some level, whether they came to it through direct personal observation or instilled through the guidance of others, they know they have to be useful in some way.
And we are told or -- sold-- on the thought that you can't be useful to society without a college degree. You can't get a good thing called "a good job" and a better life, without going to college. Your teachers didn't tell you to make something of yourself by flipping burgers at McDonalds. Your friends didn't come back home telling you crazy stories about the party the assembly line guys threw.
Zuckerberg didn't make Facebook to help connect Wal-Mart cashiers.
So if you're eighteen and have an kind of ambition whatsoever college should be the your goal like any rational teen at the time. However whenever you're eighteen, they is a highly likely chance that you haven't necessarily come up with the tens of thousands of dollars it's going to take to fund those college dreams on your own. You can't even legally earn money until you're sixteen or casted on The Mickey Mouse Club. You've got two years to earn funding for those four, on minimum wage. Now if this doesn't happen for whatever reason, there is still hope, someone else could always pay your way. If you have two parents who saw this happening and planned accordingly, they might have your back. If not -- scholarships, grants for solving equations and throwing balls are all around and if all that isn't enough (and there is not enough for everyone) ... there is still hope for our ambitious youngsters.
You can always get a loan.
Always. Always because the federal government is even a provider of funds, as well as the major banks which employ much of this board. There is money in someone else's pocket who's willingly to take a risk on you. You take the risk of soul crushing debt; someone tasks the risk of losing money if you don't achieve you're dreams and a $40,000 write off isn't as bad as a $40,000,000 one so how much risk can there be?
College graduates always earn more income just like housing prices always go up!
It's a win/win right? No child left behind! If you're young, it's a pretty legitimate option to realize you're dreams; if you have millions of dollars to invest or create out of thin then it's a good return for yourself. Give a man a fish, feed him for a day. Teach a man how to fish, feed him for life. Tell a man in order to fish he needs to go through four years of fishing school he can't afford and loan him the money and charge him interest regardless if gets a job fishing or not... feed yourself for life.
According to Smart Money (http://www.smartmoney.com/spend/family-money/why-c...) states there is an "assumption that a college education is a good financial risk for lenders." However, "student loans recently eclipsed credit card debt" which should be chilling in and of itself, but "If costs outpace the ability of graduates to find jobs with good pay, and repayment rates on these loans slide, taxpayers could end up feeling the crunch." A crunch? What are we feeling now exactly? A crunch. What am I feeling? A crunch!
Just like with the housing crises, there is tons of easy money flowing into the hands of people who may not be able to continue paying it back. So what happens when they don't or can't? Unlike a mortgage, default isn't an option. The graduate who doesn't get the job they needed-wanted now owns an invisible, intangible car that he can't drive and still has to make payments on; the creditors can't seize that car so they seize their soul and anything else they can get their hands on instead. The horror stories are abound, CNBC did a documentary on it.
At what point does this all collapse like the housing market? When is the bubble going to burst? Maybe my inner bear is roaring on shorting this, but I smell another crisis in the air while fumes from are still fresh from the recent one. I fear for our cubs. As I reflect on my shared dilemma tonight, one question is going to ravage my dreams...
When did I stop being a young, ambitious student and start becoming a toxic asset?
What I see here is that you
What I see here is that you have the skills to go into journalism. Atleast start a blog. Very well written. Aside from that I thank my lucky stars that I don't study in the USA and my country has a solid university system.
"a degree I dreamt would
"a degree I dreamt would eliminate all of those problems"
I think I figured out your problem. A degree can't get you a job. Only your skills, experience, and network can do that. And even then, only if you work at it.
Also I found it amusing on my
Also I found it amusing on my recent visit to USA and seeing my cousins insane college entrance requirements and fees that in your country the one thing (education) that freed people from social classes and gave them the freedom to be who they wanted to be has been capitalised. To the point where entrance into college is also stigmatised by the social class you are in. It is a very vicious cycle. Whilst the solution to most problems in third world countries and our society as well is education, I guess the education system in USA is over saturated. Hope things get better for you. I never thought I would see the decline of USA the great which was miles ahead of every one else in my own lifetime, let alone whilst I am so young.
Excellent post - good luck,
Excellent post - good luck, OP
Impossible is nothing
I think everyone should
I think everyone should understand the risk/reward of taking on student loan debt. You should not blame your lenders for being cavelier by lending too much money, in my opinion. It is the responsibility of each person to evaluate the prospects of paying off debt and implicit risks that come along with that. This is probably not something that is sufficiently communicated to young students about to make an extremely large financial committment - it certainly was not explained to me.
That said, there are lots of options for student debt repayment including graduated payments, income-linked payment plans, deferral, and forebearment. I'm sure the OP has explored all of these options, but it is worth mentioning that there are a number of mechanisms available to distressed borrowers.
Well written post, but I'm
Well written post, but I'm not sure I get your larger point. Are you just trying to point out that student loan debt is out of control or is there a bigger point that I'm missing? If your point is that student loan debt is out of control, I think most people agree with you.
One thing I will say is that you are a good writer. You come off as fairly intelligent and I'd assume that you'll be a hard worker once you get through this tough time. Smart + Hard Working is a combination that can get you really far in this world. Don't quit on yourself yet.
Also, while I'm sure you're not looking at more debt as the answer, if you get a graduate degree you can stretch your payment out to 25 years. I'd assume that this is true even if you go part-time (although I'm not sure). If you can get an entry-level role and go to grad school part-time you may turn your situation around. If you can build a career and stretch out those payments the monthly cash flow situation will become more tolerable.
Have you looked at entry-level analyst roles at large corporations? When we have an open FA role we typically fill it with anyone with a finance or accounting degree. There is no formal recruiting process, we basically post the positions as they open up and fill them with the best candidate that applies. If you can't find that, do temp work. It'll probably suck, but you'll build a skillset.
BOTTOM LINE: No one forced
BOTTOM LINE: No one forced you to sign loan papers. You signed them, you owe them money.
Whatever happened to honor in this country? You keep your end of contracts, that's how life works.
GentlemanJack wrote: BOTTOM
BOTTOM LINE: No one forced you to sign loan papers. You signed them, you owe them money.
Whatever happened to honor in this country? You keep your end of contracts, that's how life works.
I think he fucking realizes that. What would you have him do at this moment in time?
"Social cohesion and puritanical morality place roughly on my list of concerns between whether I'll pick up jock itch at the gym this week (not likely, since I don't go the gym) and whether it'll rain in Christchurch, New Zealand next Tuesday."
-Eddie
duffmt6 wrote: GentlemanJack
BOTTOM LINE: No one forced you to sign loan papers. You signed them, you owe them money.
Whatever happened to honor in this country? You keep your end of contracts, that's how life works.
I think he fucking realizes that. What would you have him do at this moment in time?
It's hard to say. For most loan companies, you're just a fucking number. You have to be special to stand out. So I'm guessing the kid owes a boatload if they're threatening to sue. Having said that, we would need more info, because these companies threaten to sue all the time and don't actually do it. So we would need to know how far along in the process he is.
The reality is that it costs these companies a pretty high sum to sue you, win and then collect on you. So, there's costs involved there that they would like to save themselves. You can almost always talk them into a settlement of your loan minus these projected costs and maybe a small premium like 5% or whatever. But they would only be agreeable if you're talking about a small-ish number. Its much harder to talk them into this if you owe 100K or something like that. I'm also making the assumption that the kid can pay off any amount at all and then company will take that into consideration.
Absolutely great post - 2nd
Absolutely great post - 2nd what Cluelessfromoz said about the blog. Good luck to you OP
This post and its comments
This post and its comments are a microcosm of the macrocosm. While you have some good ideas OP, your grammar is poor, and you clearly couldn't be bothered to revise before posting. I couldn't read beyond this "sentence":
"So if you're eighteen and have an kind of ambition whatsoever college should be the your goal like any rational teen at the time."
Others' comments are mere cheerleading for your bruised ego, yet others blowing smoke up your @#$ does nothing to help you.
I'm not trying to be offensive, but you come across as entitled, narcissistic, and not nearly as ambitious or competent as you think you are. Classic millennial.
What did you major in and
What did you major in and what type of school did you go to where you took on all this debt and are now unemployable? I understand that a lot of people go to ivy league schools and then aren't able to find great jobs because they have, for all intents and purposes, a degree that doesn't qualify them to do anything from a skill set perspective (not to say by any means that they aren't incredibly intelligent). However, if you take me for example, I have a shit ton of student loan debt and I am working my ass off as an analyst with the hope of paying that off, but I routinely work 90-100 hours per week to earn analyst salary. If someone were really that motivated they could certainly get the equivalent of 2 full time jobs and work roughly 80 hours a week and bring in what I would estimate at around $80k. That's essentially two full time jobs that pay around $20 an hour, which is completely feasible if you work as an administrative assistant or some office job, or Walmart during the day and then work as a server / bartender at night. The reason I know this is because I have tons of friends from back home that never went to college that do this and that's roughly what they bring home.
While I realize that the above scenario isn't ideal, you have two options... you can either A) Try to find a job that pays you a solid salary for working a normal week and pay the debt down over time, or B) Try to expedite the paydown schedule through the build-up of sweat equity (i.e. doubling down on your work hours at two shitty jobs or working as an analyst slave).
I'm not saying that the situation isn't bullshit, it definitely sucks, but there are definitely people besides yourself who are going through this. I likely have a similar, albeit marginally lighter student loan debt to yourself assuming yours is pushing 6 figures and I can say that it definitely wears on me and is very frustrating when I just see all of my money going out the door with very little staying to improve my quality of life.
But there is a silver lining in all this and that's the fact that if you can accelerate your paydown schedule such that you are cutting in to the projected interest that you owe on your loans, you are saving yourself income that will compound as time goes on. Keep after it and try not to get discouraged. I completely agree that our education system is bullshit and is something that needs fixed.
Bottom line, the gov't needs to stop subsidizing and guaranteeing loans.
1/2 of the WSO Bash Brothers
"Licensed to Ill It"
We all know Bro J did it...
Obvious answer is to take the
Obvious answer is to take the LSAT and go to a Tier-Three Law school.
Not to mention that the cost
Not to mention that the cost of college is rising faster than the price of healthcare--
I'm sorry to hear your story, but it is one that needs to be heard by all the seniors who are going to loan up on 150K for law school. More and more I hear it everyday.
See my WSO blogs here.
A bit off topic but one
A bit off topic but one commenter suggested accelerating the payment schedule on student loans. Want to point out this is not always the best idea. Depending on when you graduated your rate may be super low, especially if you are eligible for tax deduction of the interest. I think my effective rate is around 3%. At that rate pre-paying doesn't make much sense as your money is better put into maxing out your 401(k) and/or other investments with preferable tax treatment and greater rates of return than 3%. I am essentially borrowing at 3% to invest at a higher rate.
Cluelessfromoz wrote: What I
buybuybuy wrote: "a degree I
Anything more than 50K in
PetEng wrote: Anything more
It's called going to state
I am fairly convinced there
GentlemanJack wrote: PetEng
GentlemanJack wrote: I went
Kiddo I'm a capitalist. So my
Angus Macgyver
Boothorbust wrote: A bit off
Just go work for a non profit
MSF Website
MACC Website
MSF Twitter
adapt or die wrote: I am
monkeyc wrote: Boothorbust
GentlemanJack wrote: adapt
BigBucks wrote: It's called
1/2 of the WSO Bash Brothers
"Licensed to Ill It"
We all know Bro J did it...
No way, he must have gone to
If you can't kill them with kindness, just kill them.
It seems that the original
-Andrew
Student loans are a pain to
The Four E's of investment
"The greatest Enemies of the Equity investor are Expenses and Emotions."- Warren Buffet
GentlemanJack wrote: BOTTOM
I recommend you join the
adapt or die
GentlemanJack wrote: Kiddo
I have a 67K student line of
OP: You are the symptom of a
Leadership can be defined in two words: "Follow Me"
Boothorbust wrote: I think
You're pretty close in age to
"WSO is like the 300 for anti spamage. None shall pass." -happypantsmcgee
"You stop being an asshole when it sucks to be you." -IlliniProgrammer
illiniPride wrote: OP: You
accountingbyday wrote: Well
With the cost of education
This system is really
I sympathize with the OP
^ That would be called tax
So by your argument, highly
Twigga, You make an