Student Loan Forgiveness is Terrible for Millennials

I got an email last week asking if I needed “student loan forgiveness” and urging me to
“call now for this once in a lifetime opportunity.” This made my day, though maybe not for the reason you think. It was a phishing email, but I wasn’t looking for “loan forgiveness” anyway — mine was paid off two years ago by my husband and me.

“Wow, great job, Georgi!” you must be saying. “Before thirty? That’s amazing!”

No, dear reader, before 23. I paid off my debt right around when most students are only beginning payments, and that’s why that email made my day. After a hard few days, I really needed a pat on the back. Gleefully, I started typing a fake reply to the fake account phishing for my personal info:

Dear Dorothy (probably not her real name),

No, I don’t need “student loan forgiveness.” As a matter of fact, my husband and I both have completely paid off our student loans (totaling $55K) in less than three years because we are responsible adults who make good on our word. We don’t need any charity, and most of the young men and women who respond claiming that they do need “loan forgiveness” probably don’t either.

In fact, one of the worst things you can do for millennials right now, even if they’re teachers, nurses, or doctors (as most student loan forgiveness programs are for those professions), is give them an easy way out of a commitment — and a loan is just that, a commitment. Life, or what a lot of my peers call “adulting,” involves keeping your commitments even when it’s hard.

Keeping commitments also involves sacrifice — that means no road trips down the coast, new iPhones, financed cars, or regular orders of avocado toast until you can make sure you’re following through on your promises.

Most student loans are currently issued by the federal government. That means when one of my former university classmates bails on their promise to pay back what was lent to them, I and millions of other productive, responsible adults have to pay for the remaining balance with higher taxes — an estimated $108 Billion “forgiven” so far through PSLF (Public Service Loan Forgiveness Program), and about 67.5 Billion more in default. Millennials are pretty concerned about equality and fairness, but does that sound fair to you?

No, it isn’t. If a former college student is really struggling, perhaps let them defer for one or two years — there are deferment programs already in place. But for their own sake, don’t teach them it’s okay to get themselves deep into debt and then bail on repayment. Don’t send the message that promises aren’t worth the paper they’re printed on.

Sincerely,

Georgi Boorman,
Debt-Free Taxpayer”

As I wrote in this piece on money myths, millennials are pretty nonchalant about debt. We treat debt like acne — as a fact of life for virtually everyone, at least until you’re much older: “Consumer debt, including student loans, is ingrained in us from the time we are teenagers as a necessity, just like drawers full of zit cream and medicated face washes. You must take out loans to go to college, you must get a credit card to build your credit, it’s okay to finance your car, it’s okay to finance a hot tub, etc.

“Disturbingly, Reuters reports “A survey from Citizens Bank found that fewer than half (47 percent) of millennials, those in the 18–35 age group, who are college graduates, would be willing to limit their online food delivery in return for reducing their student loans.” In other words, their current lifestyle of lattes and prepared meals dropped into their laps is more important than paying back money they owe other people (most college-graduated millennials owe more than $40,000).”

The Australian real estate billionaire was absolutely right when he said millennials won’t buy houses because of “avocado toast and $4 coffees.” They don’t take their financial situations seriously enough. It’s not just that we are young and naive and too eager to brunch our money away; we are also have the government, which historically has been perversely interested in getting us easy mortgages, and, most recently, easy college debt, telling us that paying back lenders really isn’t that critical. It seems the federal government wants to get us all personally as deep into debt as the nation, but let’s hope millennials learn from its mistakes, not its programs.