Incentives matter

Chad Haag considered living in a cave to escape his student debt. He had a friend doing it. But after some plotting, he settled on what he considered a less risky plan. This year, he relocated to a jungle in India. “I’ve put America behind me,” Haag, 29, said.

He now lives in a concrete house in the village of Uchakkada for $50 a month. His backyard is filled with coconut trees and chickens. “I saw four elephants just yesterday,” he said, adding that he hopes to never set foot in a Walmart again.

His debt is currently on its way to default. But more than 9,000 miles away from Colorado, Haag said, his student loans don’t feel real anymore.

“It’s kind of like, if a tree falls in the woods and no one hears it, does it really exist?” he said.

The philosophy major concedes that his student loan balance of around $20,000 isn’t as large as the burden shouldered by many other borrowers, but he said his difficultly finding a college-level job in the U.S. has made that debt oppressive nonetheless. “If you’re not making a living wage,” Haag said, “$20,000 in debt is devastating.”

Here is the full story by Annie Nova, with photos and video.  Via the excellent Samir Varma.


With a reporter named Annie Nova, I wonder if they also have a reporter named Reggie Gression.

Maybe Ray Gression or Gresham?

Seriously; move to the jungle to avoid a mere $20k of debt? And seriously borrow money to het a philosophy degree?? Grow up!

No reason this man needs to default on his loans. Just enroll in IBR/PAYE.

He can only make $100K if he is the marginally best employee. I have doubts. My prior is that employing him would decrease the value of a Texan oil operation. Same if they employed me.

You’re missing the point, but that’s your point, I guess.

Nah, man, I think the point is that YOUR point is about as realistic as Clive Cussler.

Here You go. It’s a tedious task showing up the dummies, but it’s necessary from time to time.

The only 100k jobs I see on that site require a CDL. The entry level stuff is $12 an hour. But please continue being tedious for our entertainment.

"He can only make $100K if he is the marginally best employee. "

Haag has $20K in student debt. He could pay it off in 1 year working for $50K in a Texas oil field.

The recommendation to listen to "Dave Ramsey" is spot on.

It doesn't take an economics degree to figure out that the whole idea of giving everyone access to large loans to fund their college education will lead to really expensive universities, and a lot of degrees that aren't worth the loans.

The question is... why did it take this long for the education industry to manage to extract so much of the surplus?

Well, it took the Reagan era to remove the idea that education was about creating informed citizens, but was instead a business. Much like how the view of our national parks was changed from shared heritage for all Americans.

It takes a lot of small steps towards a much better world for the rich to get richer, after all.


Yes, he does get tedious.

Isn't it amazing how everything bad started with Reagan and is always due to a Republican and how they're pure evil?!

Whoa there, don't start jumping to conclusions. I'm sure that the Koch brothers, the Mercatus center and George Mason University are all part of the problem true.

"The philosophy major...graduated from the University of Northern Colorado...then went back to school to pursue a master's degree in comparative literature at the University of Colorado Boulder."

I think we've indentified the issue. The system works great...if the goal is to subsidize humanities TAs and faculty at non-elite universities.

Yes, I often remind myself that if it weren't for all of the fake students that fill fake colleges I wouldn't have a job. It's unpleasant to have to participate in a massive lie (humane education for the masses -- turn 'em all into bourgeois liberals) but perhaps people with other kinds of jobs also feel that they're playing a phony role.

'It's unpleasant to have to participate in a massive lie'

No it isn't - you just have to learn to profit from it. It helps to be able to lie to yourself, for example by being convinced that you are actually making the world a better place, and not actually participating in a massive lie. After enough time, it becomes really easy to do, apparently.

Only 20 grand for 6 years of college in Colorado? Hell, that's the steal of a lifetime!

Alternative title: A price is a signal wrapped in an incentive.

And yet the price of a humanities credit = engineering credit.

I would think the better title would be "The absence of price signals matters."

Every federal subsidy or program designed to make college more accessible & affordable has in fact led to ever-greater increases in tuition & fees. And federally-guaranteed loans can't be discharged by bankruptcy, no matter how long he hides in a cave

'difficultly finding a college-level job'

What does this even mean?

A job that requires a college degree and pays at least $40K pa rather than the average non-degree jobs at about $30K pa. Philosophy graduates tend to be fairly high IQ but the discipline has high under-employment rate. Will get bore with grunt level jobs.

Not a very philosophical person if he couldn't wring out something meaningful from a grunt level job.

Boss: “you seem distracted, everything ok?”.

Philosophy grad worker: “I’ll have you know I’m writing a novel in my head while working!”

Philosophy degrees don't get you a job doing philosophy, unless you get a Doctorate, stick to Academia, and get very lucky.

(Source: BA Phil., but never tried to work in the field, obviously. But this was back when a degree with good grades and skills on the side could get you in the door.

And a Phil. degree shows you can show up, do work, write, read, and think, probably even today; and that's worth something to a number of careers.

Just not something to go into serious debt for.)

Ah... but then then there is the lead singer of Bad Religion with a phd. Millionaire punks and according to OkCupid data analytics, users who list Bad Religion as their favorite band have more sex with more people by far.

Brian May of Queen went back to school to finish his PhD in astrophysics. But Greg Graffin has been a college lecturer while simultaneously leading a rock group. Bad Religion is a good group, and their song "Los Angeles is Burning" is the best song yet about Los Angeles, but I wonder if he's made more income from his lecturing or from his music career.

An administrative position, or a job screening the movies in the student union, or working in the library? Do callow youths who've earned BAs typically segue into philosophy professors out of the gate?

Clearly he liked college and wanted to stay there forever. Surely he might have adjusted his expectations and gotten a job teaching 14 -18 year-olds instead.

He's easy to mock, but he may have been lucky in his mistakes and stumbled into a richer and more interesting life. Nonetheless, his Indian in-laws will expect him to provide for his wife: perhaps he mentioned a job there and I didn't get that far.

If his philosophy coursework included a lot of analytic philosophy, which emphasizes rigorous thinking, then he should have been able to find a decent paying job somewhere:

Comparative lit: not so much.

I don't know the curriculum at UNC, but a BA Phil would normally require reading the Canon, which is mostly Analytic.

His real problem is things like "not being willing to move away from the Denver area" and "thinking a comparative lit Master's would somehow help" and "not being willing to buckle down and pay off debt for several years before Going Out With His Friends A Lot".

And "you don't normally get serious money real career stuff right after graduation".)

Why on Earth did he think getting a masters degree in "comparative literature" would help his situation at all?

I'm always amazed at the people who make terrible decisions like this and then double down.

He should at least have been able to land a basic business analyst job somewhere. $20k is just not that much.

At 20000 in debt, he would owe at most $15/month in a federal PAYE plan. I can believe he thinks he shouldn't pay anything, but it is irresponsible journalism to pretend that his only reasonable option is to move to India.

$15 a month on a $20k loan??

PAYE is a "pay as you earn" (thus the name) plan.

It's capped at 10% of discretionary income, as far as I can tell.

If he's not making any money to speak of, he won't be paying much.

Thanks for clarifying! I wondered about that. I can hardly believe all the kids conned into attending college in my state are managing $300/month.

Graduate student loans are at a 6% rate.

$20,000 * 6% / 12 = $100.

But fundamentally, he could pay off his debt in 10 years for $250 per month. Which comes to $1.25 per hour.

Key detail: Philosophy major.

Conclusion: Loser who left us with the bill for his poor decisions.

Well, that's life in AmeriKKKa ain't it Arnold Layne? When I was working overseas, I paid zero tax on the first 80k or so, and since I was in a sales-tax only and foreign income not taxed country (Greece) I effectively paid nothing on my income. It's up to you to close those loopholes.

As for this American in rural India guy, I bet he's a big fish in a small pond and loving the attention. Overseas, every white man is considered a "handsome man". Just like many whites cannot distinquish what makes an Asian handsome, the same goes the other way. I've been compared to George Clooney even though I don't look anything like him, and to Garry Kasparov (ditto). Admittedly, I'm not reprsentative since in the USA I was considered handsome, but my point is the Asians don't make the fine distinctions they do in the States. Roman nose, tall height and fair skin = handsome. My gf half my age saw a rather ugly, 'cow-looking' German girl and thought she was so pretty since she was blonde, whereas I almost gagged. Very common.

After seeing his picture, I realized I recognized this guy from years ago on YouTube when I was searching for videos on certain topics in philosophy. His YouTube handle is "chadafrican". He's a very smart and articulate guy and responsible for some of the only videos on YouTube for certain philosophical topics. Here's an example of a very good presentation and discussion from him on Hegel's "Science of Logic"

thanks for the link, but this philosopher lecturer is far superior and rocks: (on Hegel, ten minutes, excellent)

Hegel? His first mistake, then.

Used to think that. But the analytic philosophies Hegel movement changed my mind.

* Analytic philosophy (stupid auto correct)

What got my attention was that most of the growth in student loan debt since the financial crisis was people over 30.

Sometimes it's easier to work on the other side of the world compared to moving to another state.

The lesson here is that if your skills don't pay where you live, just move. It doesn't have to be to Japan, but perhaps to boring 10K people town. Anyway, it works.

LOL, I think the lesson here is that a shiftless no good person will stiff the tax payers for $20K to avoid paying $250 per month for the next 10 years.

I thought about majoring in philosophy. I asked my philosophy professor his opinion. He said the last philosophy teaching position they advertised had well over 150 phds apply.
And so I choose accounting. I can be a philosopher on my own time while accounting pays the bills.

The only problem with this is that we're still working 40+ hour weeks. That displaces a lot of time for avocations.

Ideally, with productivity gains from technology we'd only need to work a few hours a week like the Jetsons. Instead we are stuck with long work weeks and commutes in order to outbid each other for real estate.

This comment about working a double shift and saving the income from the second shift for the same length of time as formal education for a high earning job seems highly relevant to this discussion:

+1 Great, great article.

Going to college is a really terrible financial decision for a large portion of people. If a for-profit company were selling something the way government and educators try to sell college to young people, they would probably be investigated for fraud.

Thanks for the +1.
Another possibility might be to offer free courses for suitable subjects that benefit progress as a whole, such as Science, Technology, Engineering and Maths, and offer loans for hobby things like media studies, wave surfing, sports etc.
We know people with good Masters' degrees in these unproductive subjects who have been stacking shelves for employment for years after graduation from university.

Ray, this post is up your alley. The larger point here is that the leveling occurring in the global economy is a two way street, literally, as people in poor countries emigrate to wealthy countries and people in wealthy countries emigrate to poor countries. Eventually the twain shall meet.

Watch the interview with that dude. Their is literally no amount of education that would of got him a job. He sounds like a complete nut.

Zero sympathy.

We need to develop a system when the Universities have skin in the game. Have them on hook for 50% of the loans or something. Im sure they would quickly get a lot more selective and drop the number of people enrolling in useless degrees.

As with the woman a couple of days ago who wanted a career writing about opera, for all but the vanishingly rare, these are hobbies, not careers. In that regard, professional philosophy is rather like professional basketball - its just not going to be the day job for many people.

There is no reason the general populace - the people who go to work everyday, raise their kids, and pay taxes - should support these guys hobbies.

"When the State universities stop subsidizing everyone's degree it will be blamed on anti-intellectualism."

He moved around the world to avoid paying back 20,000? Something else was going on.

We really need to:
1) Allow students to default AND
2) Have universities have a risk of loss in the case of #1. Allow creditors to you know, rank risk.

Here's how that would go:
"Hey I want 20k to study philosophy."

Problem solved!

Exactly. The student loan system gives anyone loans to study anything, all at the same low interest rates. This is a problem.

Also known as "remove government student loan subsidies".

Students are already "allowed to default".

That's what defaulting is, "just not paying"; it's not something that is "allowed" or "disallowed".

Perhaps you were thinking of discharge in bankruptcy?

(But then we're back to the "Doctor Problem", where people get expensive remuneratory degrees, declare bankruptcy, and live with bad credit for a while to get rid of 6 figures of debt...)

Rather than allowing loans to be dischargeable in bankruptcy (for the reasons Sigivald points out), we should shorten the terms of the income-sensitive loan repayment plans to ten years (the term for the standard plan), and rather than putting the write-off entirely on the borrower as taxable income, hold the university responsible for at least half of that amount. If you have something like $60k in debt, especially if it's a graduate loan with the higher interest rate, and only make $35k-40k a year, 20 or 25 years is a long time to have that debt hanging over you while interest accumulates: it makes it impossible to do things like take out a mortgage or start a family, because even if you pay the minimum, when the loan is discharged, that is a massive income hit for that year. Shortening the repayment term and holding universities partly responsible for the write-off would incentivize universities to a) make sure that graduates are employed in well-enough-paid sectors, which many of them make a miserable job doing now and b) actually be honest about job prospects for what the student wants to do and what the university can reasonably guarantee. The universities have for too long just taken the student loan money, said "go to career services or the job fair", and then a year later starting hitting up grads for donations.

What a loser: "he hopes to never set foot in a Walmart again."

Good. One less freeloading shoplifter to worry about.

If $20K in student debt is devastating, then you are doing something wrong.

Based on his horror of Walmart and inability to earn a living wage, I would guess his real problem is lack of motivation to get a real job, possibly based on a moral objection to becoming part of "the capitalist system" or something to that effect.

It sounds like his debt would have been paid off in 5 years if he had kept up with the $1700 per month job and made his $300 monthly payment. And then he would have had 5 years of work experience and be debt free. Hardly devastating.

I wonder how many Indians are laughing about his description of living with his parents while paying off debt as a terrible burden.

On the plus side, his college professor indian wife can now apply for a US visa so perhaps it's a good trade for the rest of us.

The fact he thinks someone else should cover his rather modest college debt doesn't bode well, but perhaps there is hope for him since he may not spend the rest of his life as an academic, the immaturity of the average specimen of whom was borne home to me last spring, when I was a pollworker during my state's primaries, near an expensive central neighborhood where lots of profs and ancillary university staff live.

The poll was in a Mexican grocery store - more of a mercado, selling bling, cell phones, furniture, with money-wiring and coins into cash services, etc. - that serves as a gathering place for Latinos, the African-Americans who used to live on the east side, and recent immigrants of all sorts. The uni people rather stood out when they came through the line. It was a joint election, I think, with nonpartisan city seats but also a primary where the important races on the D side were entirely sewed up and there was apparently real competition on the R side (I don't remember details, didn't vote, but it must have been perceived to be a "Trumpers" versus "moderates" thing).

Now most of us can enter a polling place and vote with a certain amount of quiet dignity, right? And humility, not taking it or ourselves for more than is warranted?

University people? Quite the opposite. To the question "Do you wish to vote in the Democratic or Republican primary today?" - we even had a sign you could point to if you were so delicate you didn't want to reveal your choice aloud - the professorial-types and boomers would supply either a hammy "Democratic, OF COURSE!" for all the store to hear; or a wink and - "I want the good guys!" I can't tell you how many times I heard the latter. Then there were a few - with apparently baseline logical ability - who had managed to grasp (just a few, understand, it was obvious but evidently beyond the ken of most of them) that they might make their vote slightly more than symbolic by voting on the Republican side, this one time. How do I know? Because all these old lefties told me. Every. Single. One. "I'm holding my nose ... I can't believe I'm doing this ... I changed my mind, I was going to vote in the wrong primary, but I don't think I can, after all, this is so anguishing ... " It was gratingly important to them that I know this.

Understand, there are no repercussions beyond not being able to vote in the runoff of the party you didn't choose in the primary, and even that you can do if you complain on runoff day - but in this case even that was irrelevant. You can vote in a different primary every year. No one cares.

I tried my best to master a pleasant, utterly neutral expression that also registered: "Oh, grow up!"

I like this: guy has student loans so he can't get a loan for a car. How would he pay that off?

This happened to one of my friends: she got her MBA, and had close to six figures in debt by the time she finished. She got a job less than three months after graduation, and while not Wal-Mart tier, it was entry-level and paid less than she hoped for in a town with a fairly high cost of living. When she went to take out a car loan for a used car after her previous one that had gotten her through college and B-school died, no bank would give her an auto loan beyond a trivial amount because she had too much debt. She managed to get her dad to co-sign a loan, but I can't imagine what someone without parents to co-sign would do.

Meant to reply to Dave Smith btw

" but I can't imagine what someone without parents to co-sign would do."

Use Uber and/or a bicycle. There are plenty of guys who have lost their license for DUI's. It's not exactly an unheard of situation.

Jesus Christ, a car costs like $500. You don't need a loan and you don't need a brand new Civic.

What a spineless turd. If he were my son I’d fly to India and break his nose with the quit-hitting-yourself game.

There are plenty of Indian Dads who would be happy to sub in for you.

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