Student Loans and Personal Responsibility
People keep looking around asking themselves, “What got us into this financial mess?”. People blame the banks, they blame this group of people or that group of people, but never have I seen a better example of who is at fault than the WSJ article trying to elicit pity for people ‘over-burdened’ with student loans by parading out a doctor with $555,000 in student loan debt.
When Michelle Bisutti, a 41-year-old family practitioner in Columbus, Ohio, finished medical school in 2003, her student-loan debt amounted to roughly $250,000. Since then, it has ballooned to $555,000.
It is the result of her deferring loan payments while she completed her residency, default charges and relentlessly compounding interest rates. Among the charges: a single $53,870 fee for when her loan was turned over to a collection agency.
“Maybe half of it was my fault because I didn’t look at the fine print,” Dr. Bisutti says. “But this is just outrageous now.”
I love this quote. It’s the very beginning of the article. The author explains all of the things Dr. Bisutti did to get herself into this predicament, then she quotes the good doctor taking half the responsibility and complaining that her situation is ridiculous. I think her situation is ridiculous also but I suspect we are finding the ‘ridiculous-ness’ in different places. I find it ridiculous that this doctor defaulted on her loans. I find it ridiculous that she didn’t look at the fine print. Frankly, if she can’t be trusted to read the fine print for one of the most important documents in her own life then how can she be trusted to read all of the fine print when it only matters of her patients life?
The article goes on weaving a tale of sadness for people who co-signed for loans and ‘didn’t read the fine print’. There are a few more gems in this article.
In 2005, the bill for the Wells Fargo loans came due. Representatives from the bank called her father, Michael Bisutti, every day for two months demanding payment. Mr. Bisutti, who had co-signed on the loans, finally decided to cover the $550 monthly payments for a year.
The author writes as if this is some terrible injustice done to the father. Th author says Dr. Bisutti’s father “finally decided” to pay the bill. Apparently, neither the author or the father in question realize that this is *his* debt. By co-signing for this loan he made it his debt. He told the bank in very specific terms, ‘If my daughter fails to re-pay this obligation I will pay it”.
After completing her fellowship in 2007, Dr. Bisutti juggled other debts, including her credit-card balance, and was having trouble making her $1,000-a-month student-loan payments. That year, she defaulted on both her federal and private loans. That is when the “collection cost” fee of $53,870 was added on to her private loan.
The quote above is, I think, the most important. What it shows is someone who is not suffering financial hardship but rather is woefully irresponsible at handling her finances. I’m paying back student loans right now and my bill is well over $1000 a month. I assure you my household income is less than that of the good doctor, but my wife and I have made sacrifices so that we can re-pay the money we obligated ourselves to pay back.
What are our sacrifices? Our cars are 10 and 20 years old. Our house is 60% empty; we have no furniture. We don’t eat out often. We don’t go to the mall. I haven’t bought a new pair of pants in about 2 years, and the pants I wear to work have been patched where they have worn all the way through. We save up slowly for the things we want. We don’t have a credit card. And when it is all said and done we are able to spend $2000 a month on school loans, $1400 a month on a mortgage and have some money to save for an emergency and for things we’d like. If the doctor can’t manage that perhaps she should change her lifestyle. I suggest she, and you, read “The Total Money Make Over” by Dave Ramsey. Dave’s book isn’t a get rich quick scheme, it’s a get rich slow, and painfully, scheme. Derek Clark, the other fellow that posts things around here, has written a review of “The Total Money Makeover” over at Geek Book Reviews.
I’d like to thank Mary Pilon at the Wall Street Journal for showing us one of the many people we can blame for the financial problems in the U.S. Though, I think I’d rather she try selling this sob story to someone else. Maybe she can find someone too lazy and irresponsible to pay their loans back to be sad and angry along with Dr. Bisutti. As for me, I’m too busy working my tail off and scrimping to pay my student loans to waste time being angry with her.