Earlier this month The New York Times ran an Opinion piece by Lee Siegel, who tells his story of committing to expensive student loans for two degrees and what it did to his family. When faced with the choice of what to do, he decided to default on his loans rather than pursue a job/career in a field that was not his passion.

He describes his experience with mounting interest and collection fees, the death of his mother (the co-signer), the bankruptcy of his father, and the fact that the banks that made the original loans 40 years ago are now long out of business. He explains that the Department of Education has been pursuing him for years and he was finally led to actively pursue default in order to move on with his life. He then offers advice to those who would want to do the same thing:

  1. Before your credit is ruined, get as many credit cards as you can
  2. Find a stable housing situation and pay your rent on time so you have a good record in that area
  3. Live with or marry someone with good credit

Last Friday in the New York Times columnist Ron Leiber wrote about the trend of taking on student debt, and then refusing to pay. He opens with the notion that colleges and grad schools make their sales pitches as compelling as possible, convincing students – and quite often their parents – to sign on the dotted line. And then he raises questions about the wisdom of trying to get out of the deal by simply refusing to pay the debt.

He references Siegel’s piece and offers his opinion on the three step plan. Notwithstanding the action taken earlier this month by the Department of Education to forgive the loans of students at the now-defunct Corinthian Colleges, Leiber highlights the flaws in Siegel’s plan.

As for the concept of getting as many cards as possible, he notes that card issuers now constantly check credit of their existing card holders, and may lower limits or close accounts of those who have become high risk.

As for the stable rent-paying idea, he points out that it’s a bit of a crapshoot, as many landlords do check credit and not just references of past landlords. And then there is the complication that would be caused if, God forbid, you ever wanted to buy a home.

Third, the idea of marrying into good credit. Leiber says this isn’t foolproof either, as some lenders require both spouses to apply for a mortgage.  Finally, he raises a host of other complications caused by having a default on your credit history.

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