jenny: 1, student loans: 0
That’s right, I can claim victory over my [private] student loans, which I paid off this week. That is one huge nothing in the ‘Current Principle Balance’ column:
I haven’t called them yet to see if I’ll get a letter of congratulations and confetti in the mail or something (isn’t that how it works?), but it’s definitely over. Now if only those federal loans would go away, too…
Speaking of student loans, that’s kind of what I do now. At least, I read a lot about them: how many people stay out of college because they don’t want loans (and who)? how many loans is too many? what’s the role of government in all of this? The second two are more subjective (still, economists have their theories), but the first question is the most interesting, I think, because we really don’t know. That is, sociologists have some qualitative evidence, and humans in general have an inkling, that it tends to be lower-income students who are more likely to be dead-set against taking out loans, even if it would benefit them to do so (i.e. they’d get an education, a job that uses that education, pay off the loans no prob, and have a higher standard of living than if they didn’t take the chance on loans). It makes sense: they tend to have more ‘horror stories’ of people they know not being able to pay back a loan.
Economists tend to be very skeptical that a person would be so irrational as to not consider marginal costs and benefits, so they want some kind of hard evidence that a person who appears to have stayed out of college because of an aversion to loans really made the ‘wrong’ choice. Because I tend to get defensive toward people who hate on economists, I will hasten to add that the ‘wrong’ choice doesn’t just mean the ‘financially wrong’ choice. Getting more education (especially going off to college) has nonmonetary costs and benefits that [good] economists will point out, even if they can’t measure and account for them.
As you can imagine, it’s pretty nearly impossible to say what a person’s life would be like if it were completely different (although economists try so hard!). It’s also impossible to capture a person’s values, or what they want out of life, in a dataset. Thus arises a heated debate about why college access in this country is so skewed toward higher-income kids. Some say ‘eh, those kids who don’t go to college know what’s best for them’; some say ‘yo, something is keeping a bunch of smart kids out of college, and we should really try to fix that.’
Anyway, that’s just a tip of the student loans iceberg. But it keeps me busy.