Stop Giving Everyone a Student Loan

Megan McArdle:

A group of student-loan borrowers has declared that they’re not going to repay their student loans, and they are asking the Department of Education to cancel their debt.

They are former students — perhaps I should say “victims” — of a for-profit college operator that lost eligibility for federal student loans last year and has been purchased by a company that specializes in … collecting student-loan debts. The students claim that before the denouement, the school did everything but turn them upside down and shake the loose change out of their pockets. They’re now deeply in debt, with degrees that don’t seem to be worth much. And that’s those who graduated; those who didn’t are in even worse shape. So they want the Department of Education to forgive their loans and allow them to get back on their feet.

I feel their pain acutely. Years ago I paid a five-figure sum in today’s dollars for technical training to a for-profit school, financed not by student loans but by my day job as a secretary and my credit card. That’s how I discovered what too many students have learned since then: My impressive-sounding certification (CNE, for tech types who want to cringe in sympathy) was basically worthless without work experience. Happily, I lucked into a job that was mostly secretarial, with a bit of network admin thrown in, and that gave me just enough experience to get a full-time job in tech consulting when that company went out of business. But most of my classmates were not so lucky. They basically paid a lot of money, much of it borrowed, for a credential they never used. It was a terrible scam, and it has permanently tainted my view of for-profit education services. But I still have to ask: Should the government really have made us whole?