I love this chart. It’s from 2008, but it really does give a nice window into who exactly is filing bankruptcy? In my world of student lending that’s a hot topic because in most cases you can’t get rid of a student loan by filing bankruptcy.
That may be slowly changing with the state of the economy and the plethora of predatory lenders who have saddled heedless borrowers with huge debt. That’s not to say the borrowers didn’t have their eyes wide open when they jumped into that swimming pool of molasses and then couldn’t get out.
I just read an essay called “The Frivolity of Evil” in a book called “Our Culture and What’s Left of It”, by Theodore Dalrymple. Dalrymple takes a dark view of society and he’s a little on the crispy side in his observations, but I took away an important point. A lot of humans make choices, really stupid choices when they know the outcome will be bad. They do it In The Moment. It’s easy to think about NOW and let the future sort itself out.
That pivotal place is where a lot of factors intersect. Dalrymple interviewed a lot of women in terribly abusive relationships who had multiple children and multiple partners. In every case the women knew the man was a very bad choice as a father and partner and still chose them for immediate gratification, hoping blindly things would work out.
In this instance, the subjects were all low income and coming through his clinic in England for treatment, but if we take that same thought and apply it to people who know on some level the loan they are taking is a bad choice, it makes sense. Personally, I have talked to many students over the years who are desperate to finish their educations at any cost. They are just sure that diploma is the magic bullet that will make their dreams come true. Sadly, I don’t think that is the case in many instances and definitely not in this economy.
In my days at a university, I knew a 400 pound woman who got a teacher’s degree to teach first grade when she couldn’t climb a set of stairs to get to her classes. Of course she couldn’t get a job teaching rambunctious kids, yet the school eagerly took her promise to pay and didn’t counsel her on her prospects as a teacher. The dilemma: It was politically incorrect to mention her weight but it was morally indefensible to leave her in debt to the tune of $30,000.00 she could never pay.
Things like this happen all the time. We live in an ivory tower in academia, we are proud that we welcome students, change lives and make dreams come true. Still, I don’t think we do a good job of explaining to our students that reality has some nasty bitey teeth that never let go of your leg if you don’t get a job and worse, default on your loans.
Personally, I think schools are culpable in students’ failures if we don’t accept responsibilty for teaching them fiscal sense and counsel them on the reality of the jobs they want in the workplace that exists today. Like anything else, some students will show up on the door step knowing already what money is and does, and others will be lost and clueless, ready for that dip in molasses and a swim in the sea of bankruptcy.
I think thousands of us in the campus based lending and collections areas of schools know exactly what has to happen, but getting anyone to listen is a whole other fish fry. I’m seeing more and more about financial literacy these days and I’m really glad after being one of the voices yowling in the wilderness for years.
How does it happen? Who is successful? I intend to find out…