I dug up this piece on “good debt” and its problems from the Baltimore Chronicle (2006). It’s my second “Penny Whys” column. There were only two, because I got busy with writing “Mobs, Messiahs and Markets” after that.

As you can see, I was sounding off against college education a long time back.

And folks who know me know that the sounding off goes back to childhood. Getting me to even stick with high school was a protracted battle.

I wanted out at around 11 or 12. I day-dreamed  of working my way around the world.

If I couldn’t be a sailor (like Conrad), I could at least do something practical.

I would have liked to work for National Geographic. For which education wasn’t necessary, I thought. I could write. Why wouldn’t they hire me? Well, apparently, they wouldn’t.

I’m sure they don’t open letters from thirteen year olds in India.  I wrote to Boris Spassky around the same time,  asking about his latest strategy against Fischer. He didn’t reply either.

It wasn’t that I wasn’t a good student. I was.  But I learned much better on my own, had interests that didn’t match my subjects, and hated all the extra things that went with school.

As some kind of bitter karma, I ended up getting a Master’s in India (the minimum needed to get a job above starvation wages) and then had to redo my education in the US, which tends not to accept degrees from other countries. Out the door went all the books I had pent up inside. Between working several badly paid jobs, household duties, a small business, and night-school, there was less and less time for writing.

I wanted to go to a Catholic school and study theology and music theory. But I didn’t drive in those days, and I couldn’t make the classes on the bus. So I ended up in political science at Hopkins, which was the only place that offered classes that fit.

Course by course, working my way through at the rate of a couple a semester, I Iearned the Byzantine treacheries of the academic world, its ghettos, mafias, and Tammany Halls.

I don’t regret going through it, any more than soldiers regret going to war or mothers regret having children. It’s not possible to regret something that takes up half your life. You can only live with it as well as possible.

[The first column was “A Twelve Step Program for Debtaholics.”]

“In our last little chat, I talked about the addiction that drives consumers to spend in America, an addiction driven by a desperate loss of control over their financial future. No longer is a house, an education, or good health care a genteel burden your average upstanding citizen can shoulder on his own. Instead, it has become debt bondage….life-long servitude. And the enslaved ones yank at their chains in the only way they know—by recklessly throwing away money on consumer goods they hope will compensate them for their slavery. They buy to fill the queasy emptiness unsettling the pit of their stomachs.

But salvation by stuff is not in any gospel that Penny ever read. King Solomon—he of the supernumerary wives—had plenty of stuff too. But didn´t he sigh wearily that it was all vanity? Or was that the preacher in Ecclesiastes? Twenty years out of school, these things can get foggy.

The point is, the urge to look outside yourself for solutions to problems that stem within yourself is the source of addictive behavior. And buying stuff you don´t need is the definition of looking outside your self for solutions.

But Penny realizes that not all stuff is stuff you don´t need. In fact, the largest part of the modern consumer´s debt in the United States and the source of her perpetual anxiety is necessary debt, “good debt.” The kind that she feels proud to own up to, the kind that she staggers under for the natural term of her adult life with the game smile of a Christian being escorted into the catacombs. All for a good cause, it says, before it sets into rigor mortis.

Now, anyone who has picked up a newspaper or even switched on his TV has surely absorbed every nuance of the first of the “good debt” traps lying in wait for the unwary—the great housing hustle of the early twenty-first century. Actually, in America today it would be hard to find even a borderline member of the human species who had not slapped up hard against the phenomenon of home-as-honey-pot. And we also haven’t lacked for warnings about the advanced state of deterioration of another “good debt” trap—our health care system—since überwench Hillary decided to play Nurse Ratched with it in the boisterous days of William Jefferson’s regnum.

But the third “good debt” trap—the gargantuan price tag of education, lower, higher, and all sizes in between—seems to have slipped through our fiscal early-warning system, no doubt because a mega-tsunami of debt suddenly becomes manageable, worthy, and indeed downright righteous when it’s driven not just by vulgar splurging on run-of-the-mill consumer junk but by the sweat-and-blood payments of the solid citizenry on something so rarefied (and thus obviously much too elevated for us plebes to debate) as education.

Well—time to debate.

First, college costs rise faster than inflation and have done so for the last ten years. According to the report, “Trends in College Pricing 2005,” of the College Board, a non-profit association of 4,500 schools, colleges and universities, tuition costs at four-year private colleges grew at about the same rate as in 2004—5.9 percent—to $21,235.

The rate fell at four-year public universities to 7.1 percent (from 10.5), but the actual costs still increased by $5,491.

Second, Kal Chaney, author of Paying for College Without Going Broke, forecasts that “For the foreseeable future, college cost increases are going to exceed inflation…”

Add room and board to tuition, and the cost of a private college averages out to $29,026 per year, and at a four-year public college to $12,127. Over four years, that works out to the price of a modest bungalow and condominium. At least in Pittsburgh, Pennsylvania.

But of course, it’s completely worth delivering this samurai chop to the family piggy bank because when Junior grows up to be a hair-transplant surgeon, bankruptcy lawyer, used car salesman, or—better yet—beltway lobbyist, it pays off big time. That’s the theory, anyway. But what the theory overlooks is that counting on a professional in the family means doubling the bill to fit in professional school fees. Three years of education at one of the nation’s tonier law schools, for instance, and you rack up at least a hundred twenty grand on the ..er..bar tab. So now we’re looking at something over two hundred grand for the whole business.

But so what? Aren’t we all worth it? Don’t we all deserve the very best? Don’t we love us enough to do this for us?

Apparently, vast numbers of college-intoxicated adults think so. But Penny—who has eyeballed more ivy halls than she cares to admit to—is here to tell you otherwise. No. Don´t do it. Think again. Need to get a job? There are much quicker ways. Need to make more money? Take that college fund and buy an education franchise…or a gas station. Need to get an education? Just remember it was Mark Twain who said he never let his schooling get in the way of his education. And he wasn´t kidding. Twain, Jack London, Benjamin Franklin, George Gershwin, Galileo…just a few of the geniuses who never finished college…and never needed to.

There is no longer any need to accept debt—even respectable debt—as a badge of honor of your socio-economic aspirations. From now on, the highest mark for smarts will go to those who avoid any kind of debt.

And even if you insist on going, there is no reason whatsoever for contracting a terminal case of insolvency.. Penny knows several ways you can get yourself a college degree for substantially less than the going rate, and do it with a lot less effort.

The point is there is no longer any need to accept debt—even respectable debt—as a badge of honor of your socio-economic aspirations. From now on, the highest mark for smarts will go to those who avoid any kind of debt.

Next time: How to get an education without getting into debt….or even into your car.

Until then,
Penny, giving you the whys of thrift, not just the hows.

Penny Whys is a column of personal finance written by Lila Rajiva, a political journalist and writer for the Daily Reckoning, a libertarian financial magazine headquartered in Baltimore.