Tuesday, November 9, 2021

College students: Don't Take Out Student Loans to Pay for a Luxury Apartment

 When I was a child, my parents were poor. That was OK because almost everyone in my little Oklahoma town was poor, and we all told each other that we were in the middle class.

By the time I graduated high school, my parents had clawed their way into the actual middle class, and they sent me off to Oklahoma State University to be "educated."

I moved my stuff (a few clothes and an electric popcorn popper) into Cordell Hall, an enormous and depressing men's dorm. I could have signed up to live in a newer dorm--one that had air conditioning, but that would have cost my parents more money.

Reflecting back on that experience, Cordell Hall wasn't so bad. My roommate and I installed a window fan that kept our dorm room temperature down to a comfortable 85 degrees, and I became friends with dozens of guys who were sweating it out with me in Cordell Hall.

Today, college kids have more housing options. They can live in a university dormitory or move into a "luxury" student apartment complex.

What is a luxury apartment complex? Based on the advertising, it is an apartment building with a "resort-style" swimming pool, a fitness gym, in-unit clothes washers and driers, granite kitchen counters, and big televisions. 

What does that cost? A lot. A one-bedroom apartment with a bath can cost $1100 a month or more. Older apartment complexes are cheaper, and students can always cut their costs a bit by sharing a unit.  In Baton Rouge, the luxury apartment complexes have lots of five-bedroom apartments for rent.

Millions of young people from low-income families arrive on their college campuses with access to more cash than they've ever seen before--cash in the form of federal student loans.  If they use some of that loan money to rent a luxury apartment, they can live better than their parents.

What does it matter how much an apartment costs if students take out student loans to pay the rent? And if they max out on the amount of federal loan money they need, they can get their parents or grandparents to take out Parent PLUS loans.

But hear these words of caution. Students should not take on more college debt just to live in a luxury apartment complex with a swimming pool and a fitness gym.  

Why? Because it is easy to get used to so-called luxury living while in college. And students who take out loans to pay for a classy address may graduate to find they can't get a job that pays enough to support their upscale lifestyle.

If that happens, these hapless students will wake up to the shock of seeing their standard of living go down after they graduate.  They may wind up having to vacate their luxury apartment to move into a dump on the wrong side of town--the dump where they should have lived while they were in college.

The Vue: Another Luxury Student Apartment Complex is Coming to Baton Rouge







Thursday, November 4, 2021

Thinking About Going to Law School? Read ABA's Report on the Impact of Student Debt on Young Lawyers

 If you are thinking about going to law school, you should read a recent report titled "Student Debt: The Holistic Impact on Today's Young Lawyers."

According to the ABA's Young Lawyers Division, 90 percent of young lawyers who responded to an ABA survey said they had taken out student loans to finance their legal education. On average, these young attorneys reported taking on $108,000 in student debt.

The debt level for young Black lawyers was even higher--on average, young African American attorneys had accumulated student debt totaling more than $200,000.

Did any of these young lawyers feel regret about their indebtedness? You bet. 

Ninety percent of the respondents said that "their debt impacted their advancement toward major life milestones, and a majority of borrowers said they are anxious, stressed, regretful or guilty due to their loan debt" (as summarized by Insider Higher Ed's Alexis Gravely).

Did these young lawyers feel like they got good value for their law school tuition? Less than half (47 percent) said that their legal education was worth the cost.

How many respondents would still go to law school if they had the opportunity to live their lives over? Only about 6 in 10.  And only a little more than half of the lawyers surveyed (55 percent) said they would attend the same law school.

 In fact, more than half of the survey respondents who were dissatisfied with their law school said they wished they had chosen a school that charged lower tuition. About three out of ten said they wished they had chosen a school located in a better job market.

In essence, the ABA uncovered a high level of regret and dissatisfaction among young lawyers, feelings associated with their student debt.

Does the ABA have any suggestions for solving the problems that were identified by their survey? Not really. 

Here are the ABA's recommendations, which are mostly bullshit:

  • "Expand access to and awareness of, free financial and mental health resources for recent law graduates . . ." In other words, free psychiatrists and debt counselors!
  • "Continue to lead, sponsor, and support initiatives that holistically foster financial wellness and professional development of young lawyers."  I have no idea what that means.
  • "Improve the Public Service Loan Forgiveness Program . . ."  Lots of luck!  
  • "Improve financial literacy and awareness of the legal job market and the cost of law school attendance . . . ." In other words, law students should wise up.
  • "Reform the federal student aid programs . . . ." Again, lots of luck.
The ABA had some more vacuous suggestions, but I won't bore you with them.

Note, however, the ABA did not advocate shutting down all the second- and third-tier law schools that are charging their students out the butt for their law degrees and then turning them out into a lousy job market.

Nor did the ABA advocate lowering law-school tuition rates, which are north of $50,000 a year at many schools.

So--thanks for nothing, ABA.



Tuesday, November 2, 2021

105 Organizations Want Biden to Cancel All Student Loan Debt: It Ain't Happenin'

 More than one hundred public interest groups sent a letter to President Biden this week urging him to cancel all student debt. How much are we talking about? Close to $2 trillion.

I will say upfront that I support wholesale student-loan forgiveness. As numerous studies have pointed out, burdensome student debt has kept millions of Americans from buying homes, having children, and saving for retirement. 

If the President were to cancel all student debt, 45 million college-loan borrowers could pour approximately $5 billion a month back into the economy.  That would be good for everybody.

Nevertheless, I don't think President Biden will wipe out $2 trillion in student debt. As Betsy DeVos, President Trump's Education Secretary, pointed out in a 2018 speech, student loans make up one-third of all federal assets

What will be the consequences if the federal government removes one-third of its assets from the national balance sheet?  I don't think anyone knows.

Also, the President surely realizes that forgiving all student debt undermines the integrity of the federal student-loan program.  If all student loans are forgiven this year, how can the Department of Education expect to collect on the student loans it makes in the future?

Moreover, I don't see the wisdom of wiping out $2 billion in student debt unless American higher education is fundamentally reformed. Tuition rates have reached an insane level--$25 thousand per semester at most private colleges. Colleges are cranking out worthless degrees in the liberal arts and social sciences, not to mention vapid graduate degrees in law and business.

And we have far too many colleges. Does it make sense to grant wholesale student-loan forgiveness while the government continues propping up the for-profit college industry and small schools that are losing enrollment and teetering on closure?

I think everyone who calls for massive student-loan forgiveness is sincere. I believe our President and most members of Congress really want to grant relief to millions of Americans who are saddled with unmanageable debt levels.

But when we look closely at the federal student loan program, we see what a monster it has become. We can't fix the loan program without fixing higher education on a massive scale.  And no one has a clue how we can do that.














Tuesday, October 26, 2021

LSU buys out football coach's contract: What's $17 million among friends?

 A few days ago, LSU announced it is getting rid of Ed  Orgeron, LSU's football coach.  Orgeron coached LSU's football team to a national championship in 2019, but what has he done for us lately?

What will it cost to buy out Orgeron's contract? Almost $17 million. Orgeron gets the cash in installments, but he gets the first half a million in December.

LSU will also buy out several members of Orgeron's coaching staff. What will that cost? Another $9.5 million.

And the university is still paying for some earlier buyouts. In 2020, LSU bought out defensive coordinator Bo Pelini's contract. That cost LSU $4 million. 

It also bought out a passing game coordinator's contract. But that was chump change. It only cost LSU $1 million.

Money, money, money. LSU renovated the football team's locker room in 2019.  That cost a cool $28 million. Each player gets his own sleeping space in case he gets tired while studying for exams.

College sports is big business. Everyone understands that. But does it have anything to do with the students?

Apparently not. Every time LSU's athletic department spends a ton of money, its PR people remind us that LSU's football program is a moneymaker and that students don't have to pay a dime to support it.

I'm not sure I believe that line. LSU football wasn't a moneymaker in 2020 when the COVID pandemic virtually shut down college sports.

In any event, students probably aren't paying attention. On any given day, students walk across the LSU campus with their eyes fixated on their cellphones. Many don't bother to use the crosswalks. They just meander across the streets anywhere they choose.

Just a few days ago,  two cars collided on Highland Avenue, which runs right through campus. As you can see from the photo, one of the cars flipped over and was totaled.

The speed limit on Highland Road is 30 miles an hour. Maybe LSU should spend less money on football coaches and devote more resources to traffic control.


Look both ways before you cross the street on the LSU campus.


There are no cold guns: Alec Baldwin shoulda been an Oklahoma Boy Scout

 I learned about gun safety from the Boy Scouts. Every year my Scout troop went to Summer Camp at Camp George Thomas, and we kids spent one hour every day on the rifle range.

Our gun instructor was a grizzled Army sergeant on active duty at Fort Sill, and he was all business. He assigned each Scout a  bolt-action rifle and a punchboard that held ten little bullets--.22 shorts. 

Sarge gave us strict instructions to always point our rifles down-range and not shoot until he gave the order. 

And then he would boom out these majestic words:

"Ready on the right? Ready on the left? Ready on the firing line. Gentlemen, you may commence firing."

Gentlemen? He called us gentlemen! Just like we were grownups!

Our rifles could only hold one bullet--the ammo magazines had been removed. We all fired one time, ejected the tiny shell cases from our rifles, and then inserted the shell cases in the pegboards the sergeant had given us.

At the end of each exercise, the sergeant collected the pegboards and made sure no shell casing was missing. Thus, it was impossible for a bullet to go astray.

I don't recall being hectored by anyone about gun safety when I was a Scout.  We were told the two cardinal rules of gun safety and expected to follow them.

And what were those rules? 1) Every gun is loaded; 2) Never point a gun at anyone you don't intend to shoot.  That's all we needed to know to avoid a gun accident.

Poor Alec Baldwin killed a woman on a movie set a few days ago. Believing his weapon was a prop gun that shot blanks, Baldwin pulled the trigger. Unfortunately, the gun was loaded with five live rounds.

I do not blame Mr. Baldwin for this tragedy, and I hope no criminal charges will be filed against him. Someone put five lethal bullets in the pistol that he fired, and someone shouted "cold gun" just before the accident--an affirmation that the gun was safe.

Nevertheless, if Alec Baldwin had been an Oklahoma Boy Scout when he was a child, I think he would have assumed the gun he was given on that New Mexico movie set was loaded with live rounds. I think he would have checked the gun himself.

The Boy Scouts have fallen on hard times. The Scouts took bankruptcy recently to get out from under a deluge of sexual abuse lawsuits.  They changed their name. They're not Boy Scouts anymore; they're just Scouts.  Girls can be Scouts too.

And that's a good thing.

But the Boy Scouts of my childhood was a noble organization. I learned to build a fire, sharpen a knife, and cook a meal over a campfire. And I learned the basic rules of gun safety.

America now has almost 400 million guns in private hands. Since there are only 330 million people in the U.S., there's a gun for everybody--even toddlers and infants.

Unfortunately, most of these gun owners weren't Boy Scouts in Oklahoma when they were children. That's a shame.


"Gentlemen, you may commence firing."







Sunday, October 24, 2021

We're Number 1! LSU signs deal with Caesars Sportsbook to promote sports betting

 Is it just me, or have Louisiana State University's administrators lost their friggin' minds?

Last month, LSU announced it's teaming up with Caesars Sportsbook, a big-time gambling company, to promote sports betting.

Under the deal's terms, Caesars will get the naming rights to the Skyline Club at Tiger Stadium and can put its signs up in the football stadium, the basketball arena, and the baseball field. 

Will people be allowed to bet on sports inside LSU's football stadium? We don't know yet, but it's "one of many options being considered," an LSU official revealed.

Scott Woodward, LSU's athletic director, assures us that the gambling deal was brokered with the fans in mind: "LSU has always taken pride in providing fans with unique, innovative, and world-class experiences, and our new partnership with Caesars Entertainment will do just that," Woodward explained.

What lovely bullshit! But that's what we would expect from a guy who makes $1.2 million a year.

What about the students? Should a public university promote sports betting to impressionable youngsters?

Not to worry. Caesars promises not to market to students under the age of 21 or “highlight gaming offers inside campus facilities.”

That's a relief!

And, of course, some of the revenue from this gambling deal will go to student scholarships, which makes everything OK.

What's next? Will LSU open a brothel in the Skyline Club? Now that would be a "world-class" experience. Fans could drink, gamble, and fornicate to take their minds off LSU's abysmal football season.

And that would be fine because some of the prostitution revenue would surely be reserved for student scholarships.

Not that it's relevant, but LSU dropped 19 spots in the latest survey of top universities that U.S. News and World Report released last month.  LSU now ranks next to last among colleges in the Southeastern Conference. 

Who cares? LSU is the first SEC school to promote sports gambling, and that makes it number one in my book.


Bummer! You can't bet on LSU football in the Skyline Club.








Wednesday, October 20, 2021

Take this student loan and shove it: Will student debtors start making payments on their college loans when the government's payment holiday ends?

When we go on vacation, most of us sleep late, basking in the luxury of rising in the morning whenever we wish.

 Then our vacation ends, and we have to set our alarm clock again. And we find it damned difficult to pop out of bed at 6 AM to get to work on time.

 Something like that will happen when the U.S. Department of Education ends its pause on student loan payments. Student debtors enjoyed a grace period on their loan obligations during the COVID pandemic. They could skip their monthly student loan payments without penalty and spend that extra cash on other things—a new car, maybe.

 Millions of student borrowers benefited from this loan-payment holiday, but nobody knows how many will start making monthly payments again when the holiday comes to an end in February.

According to Politico, Education Department officials have instructed loan services to create a "safety net" for borrowers for the first three months after payment obligations begin:

 Borrowers who miss a payment during the initial 90-day period will not take a hit on their credit reports. Those borrowers will instead be automatically placed in a forbearance and be still considered current on their loans.

Student borrowers will appreciate the safety net, but will they start making their monthly loan payments again when the government's loan-payment pause finally ends?

Even before the pandemic, the default rate on student loans was considerably higher than the default rate on credit cards and car loans.

 And this pattern makes sense. Overburdened debtors who stop making car payments lose their cars. If they quit paying on their credit card balances, their cards get canceled.

 But if student-loan debtors stop making payments on their student loans, nothing happens--at least not immediately. 

 predict that student loan defaults will spike upward this spring. Millions of student-loan debtors got permission to stop making payments in the spring of 2020, and they will find it challenging to start writing those monthly payments again, even when they are legally obligated to do so. 

To paraphrase a great country singer, I think many college debtors will take their cue from Johnny Paycheck and tell the Department of Education to take their student loans and shove 'em.