Free your campus

I've spent the week mad as hell about the wretched bankruptcy bill the credit card companies are pushing through our Rent-a-Congress.

It's encouraging to see how broad and bipartisan popular opposition to this bill seems to be. Anyway, to keep up to the minute on bankruptcy bill developments, check out the special edition of Talking Points Memo. Once this bill is signed into law, the following gains an added degree of urgency.

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By my junior year of college I'd had enough of the credit card advertisements.

They were on every bulletin board on campus. They were on the boards in the mailroom, in the dorms, even on the boards of the various academic departments.

Back then a year at Eastern University cost about $15,000. The theory, apparently, was that anybody who could afford to pay for school must also be a worthy credit risk. So we were all "pre-approved" -- even though most of us had little or no income that wasn't already dedicated to paying tuition, not to mention thousands of dollars in educational debt already piled up and waiting for us after graduation.

One of the problems with all those student loans is that they limit graduates' options. Maybe you want to use your education in the nonprofit sector, or in social services, or the arts -- those options aren't available to you if repaying your educational loans requires you to seek a bigger paycheck.

Yet as burdensome as student loans can be, they're nothing compared to the indentured servitude of many of the students who responded to those omnipresent credit card advertisements.

I didn't like the way those ads were luring so many of my friends and classmates into perpetual debt. And I didn't like the way all this increasing debt was changing the nature of higher education into a kind of glorified vo-tech system that was meant to do little more than enhance your future earning potential.

So like I said, I'd had enough.

I took down the ads. Every last one of them. I recycled all the posters, the fliers, the business reply envelopes.

They replaced them, of course, but I got rid of all of those as well. It became a weekly ritual. I'd make the rounds regularly. I carried a staple remover wherever I went.

So the point here is, if you're a college student, or a college professor, or even if you're the parent of a college student: Get yourself a staple remover.

Buy two and give one to a friend. But when you buy them, pay cash.

Comments

[laughingman]

Nice piece of guerrilla politics! If only I knew some college students...

[Andrew Cory]

Whenever we Students for an Orwellian Society go on a fliering rampage, we are faced with the unpalatable choice of having to poster over something on an already overcrowded board. Down come the Kaplan ads, up go the good stuff...

[Stan]

That's funny.

Back when I was in college (1979-82) I was approached by credit card companies with offers of cards, but I passed on all of them because I thought it was more prudent to wait until after I graduated and had a real income. But then I discovered that being an engineer with a decent salary made me a *worse* credit risk than as a college student with *no* salary. It took me four years of working before I was able to get a credit card. Just one more reason why the credit card world is 'through the looking glass'.

[Fade]

When I was in college, I applied for a credit card so that I could establish a credit history. I used it exactly once, to buy a monitor for my new computer, and paid the bill off the same month. I've had a credit card ever since, but I've had maybe...what, five bills? Maybe that many. And never paid interest on any. Always paid it off immediately.

I don't mean to brag; what I mean is that I thought this was reasonable, normal, mature behavior for a young adult who was already piling up loads of debt from financial aid loans and the like. People my age and older keep telling me now that I should be aware of how lucky I am to not be surrounded by crushing credit card debt. Maybe I am lucky. But...it always seemed to make sense. With interest rates like that, it would be stupid to spend money I didn't have, in anything sort of an emergency. Wouldn't it? Wouldn't this be obvious?

Maybe I'm just lucky I never had the emergencies other people had.

[Andre]

I've been doing something similar at the campus where I teach. I was outraged they were advertising in my classroom--they wouldn't want me to post my syllabus (never mind teach) at their bank. And the business reply envelopes? Those I put in the mail!

[Shag from Brookline]

"Back then a year at Eastern College cost about $15,000." (I assume this included tuition, room and board.) The cost now can range from $25,000 to $40,000 at non-State colleges. The most tuition I paid as a commuting law student back in 1953-54 was $400. Working hard summers, a student back then could save enough for tuition and possibly still be claimed as an exemption on his parents' income tax returns. This is of course virtually impossible today. So student loans, financial credits and credit cards are necessary for many. I started practising law without any debt. I find it hard to imagine how a law school graduate who has piled up debt over college and law school can cope with it. For some lucky young lawyers who get huge starting salaries at the big law firms, they may be in a position to pay off this debt. But think of how these huge salaries are passed on to clients who pass them on to their customers. I don't know where I am going with this other than to suggest that the public ends up subsidizing, eventually, in some manner all this debt. Does this smell of an unintended Ponzi scheme?

[Jesurgislac]

Fade: With interest rates like that, it would be stupid to spend money I didn't have, in anything sort of an emergency. Wouldn't it? Wouldn't this be obvious?

I agree. I didn't get a credit card till I had to (which was some years after I graduated). But I got through college without any debt, thanks to help from a grandparent and generally a more helpful financial atmosphere for students.

My sister, who went to college just a few years later, acquired a truly unavoidable shedload of debt. She said that one of the worst things about it was that - since you already owed unbelievable amounts of money that it was hard to believe you'd ever pay off - it made acquiring more debt seem relatively painless. She fought the temptation hard, but she could see why students ran up big debts over their basic survival needs - when your survival pushes you deep into debt, it seems silly to give up the small good things in life, too.

[Fade]

I can see the temptation to just keep gathering debt when you're already tens of thousands of dollars in debt. I was fortunate in that all of my loans were through the college, so they had very low interest rates; it was easy to compare that to the ridiculous rates for credit card bills, and back away fast.

My little sister, on the other hand, had to grab bank loans for some of her college expenses, and I can see how she's been having so much more trouble staying out of credit card debt. Maybe that is a part of it; the further you are in the hole, the less it seems to matter if you dig yourself further down.

[Brad]

Have to agree with Stan here. I avoided credit cards in college and was lucky enough to not need student loans either. When I started working and wanted to establish a credit history to make future borrowing possible, I found that getting an unsecured credit card for even 3% of my income was a near impossibility because I was an unknown quantity. I wished I'd gotten one of those cards when I was a student and used it responsibly.

[syfr]

I usually use my credit cards and pay them off every month. I've decided to go with cash when possible, to prevent the credit card companies from getting their cut. This bankruptcy bill has made the credit card a necessary evil for me.....

[SadPunk]

When I was in college, I applied for a credit card--ONCE--so I could get whatever t-shirt or some such they were giving away. My income at the time (1992ish) was about $250 a month, and so when the card arrived, I somehow summoned the maturity to call them up and tell them to cancel the account, and then I cut the card up and threw it away.

At least once a month I kneel facing Fort Knox and say a prayer of thanks that I didn't use that card. In hindsight, I know for certain that I'd have been in hideous, massive financial disaster in a short time.

[Athena]

I have a new mission on my campus! Get rid of these "free" monsters lying in wait. Next time I'm on my way to class, I'll know what to do.

My daughter, set to start college this fall, just got her first offer in the mail.

Luckily, she already knew what to do with it.

[patchmonkey]

I use/used credit cards all the time, both now and in undergrad.

The secret - and it shouldn't be - is to always pay it off, and don't buy too much. I use my AMEX now almost exclusively, but I pay it off immediately.

You know how you can tell the card companies hate you? AMEX keeps trying to get me onto one of their Annual Fee cards, since I have a blue. They lose money every time I pay my bill, so they are trying to make it somewhere.

[Paul]

patchmonkey: They don't lose money every time you pay your bill. They still make money on the fees they charge merchants every time you use your card.

[TalkieToaster]

I've put up a site you might want to check out its in beta but its an attempt to coordinate the effort.

plasticrevolution.org

[drieux just drieux]

I think you folks are clearly missing both the marvel of the bankruptcy bill, as well as the clearly positive upside of the project.

No sooner did congress close down the option of bankruptcy for persons who had racked up unmanageable debt due to massive medical expenses than congress decided that since there were still persons credit worthy the Terri Schaivo case was the new cause celebre to show the new compassionate conservativism. I mean why call them back from heaven when someone can still be nailed with the medical expenses. A proposition they had clearly established in the last session when they passed the unfunded mandate of Medicare. The budget busting bomb that makes the so called SSI crisis of faith look like, well, gosh a well funded trust program.

So it is very important for the modern college student to learn early how to do cash flow analysis and the value of currency speculation. The problem in most college credit cards is that they have high APR's and limited credit lines. So it's not like the typical student in the first year can do the simple straight ahead process of cashing out their credit line and investing it in T-bill's or Euro's. But think about the great lesson it would teach young persons - rack up six plus months of 'expenses' at the 0% APR, and use the current cash to buy a six month T-bill at 3% - that way when the next credit card offer comes in they can do a balance transfer to the new low credit offer and roll over their T-Bill.

The gamble of course is that one will move from the low end of the wage scale and get one of the few high paying jobs as a media pundit on the government payroll shilling government policies. At which point one can weasle their way into one of the more protected 'asset preservation trust' so that if one needs to take a 'poison pill' and roll over on the outstanding debt it's not like one is going to lose their shirt in the deal.

The alternative is that one follows the current federal budget policy of borrowing as much money as one can grab, based upon potential payments in the Future. This means racking up debt in 2005 dollars that one does not expect to pay back until the dollar tanks and is an order of magnitude less than the current value! It's really a great and exciting strategy folks really should be looking seriously at this.

Back in the day I was making $6K a year - decide that the per annum cost to go to a private college was $6K a year - so why not? Let the Fed carry the college loan float while I was a student - and then work off those college debts with a bit of cash flow majik. I figured that on the far side the deal would pay off, as it was not like I was going to have to pay those off in Pre-Nixon Dollars where an Ounce of Gold was only $35, rather than as we notice now, that it is around $428 per Ounce.

So don't deprive your children of the basic economic education they can gain by learning how to do creative financing with cash flow manipulation, currency speculation, and with any luck, they may even beable to gain some experience with insider trading. If nothing else it will give them a small introduction to the value of a black market system where there is none of that incumberance of courts, contracts, the useless overhead of a government system...