Author and culture critic, Lee Siegel, created quite a stir on social media in early June in an op-ed in The New York Times. Siegel admitted that he defaulted on his student loans. The part that had everyone talking is that he willfully did so.
In the article, Siegel recounted his story of how he, at seventeen-years-old, and his mother went to the local bank and took out his first student loan. He recalled how, when he was finished with the paperwork, the banker congratulated them. Siegel described this congratulation: “as if I had just won some kind of award rather than signed away my young life”.
He explained that, later in life, he realized he had a decision to make. He could either find a job that could repay his huge debt that had accumulated from college and graduate school – a job that had nothing to do with his degree – or he could choose “life” by doing the job he had always wanted and worked through college for. In the end, Siegel chose to default on his loans so he could become a writer, doing what he had always wanted and worked towards doing.
Despite Siegel’s claims that he felt it was the moral thing to do, defaulting on student loans is still a bad idea. While many experts agree that America’s higher education system needs much reform, those who default on their loans will struggle with it for the rest of their lives. Even Siegel admits this fact in his article by stating that you will need to “get as many credit cards as you can before your credit is ruined”, “find a stable housing situation”, and “live with or marry someone with good credit”.
In truth, the government has the power to collect on student debt. Your credit will be in a terrible state if you fail to pay back your student loans. The government has the ability to claw back your wages, tax refund and social security benefits. Overall, it is a bad decision that will negatively affect your life in so many ways.
Starting a business, for example, could be extremely difficult if not impossible. Banks are not willing to work with those that have bad credit. In their eyes the individual/company is “high risk”. Alternative lending sources like First American Merchant Funding, on the other hand, specialize in working with those that suffer from bad credit. With FAM you can find a solution to your needs with a bad credit merchant account with instant approval. If you suffer from a history of bad credit, it does not have to prevent you from starting something you have dreamed about.