Pub. 1 2012 Issue 5

16 l e a d i n g a d v o c a t e f o r t h e b a n k i n g i n d u s t r y i n k a n s a s MAINSTREETANDMONEY.COM Squirrel Games A s I was driving down a street in town, I saw a squirrel flattened on the road, which is a very common sight in Kansas. How such a cunning creature always seems to panic half way across the road and suddenly reverse his path, only to run directly under the tires of the vehicle trying to avoid the contact, has been a mystery to me. In some urban areas, there are actually designated crossings for squir- rels complete with signs, resulting from the thinking that these creatures will read and use them. Not too far down the road, I saw a much smarter squirrel. It was crossing the road in a safer manner, using the existing telephone line as a bridge. This little guy didn’t need signs, government intervention, or even assistance from PETA to safely cross to the other side; he just used his ingenuity. This started me thinking about what is going on around us today. It seems that when someone in Washington perceives a problem, it must be someone’s fault other than the person who believes they have been wronged. Take student loan debt – a trillion dollar fiasco. This debt is owed by borrowers who are over 18 when they signed on the “I promise to repay” line, who are old enough to enter into legal contracts and old enough to vote, and whose reading comprehension skills certainly are sophisticated enough to tackle the university-level information they intend to study. But the schools also realize that, if they entice potential students to get these loans, those same folks can pay for the ever-increasing tuition and fee charges the schools imbed in their ever-increasing budgets. The mega banks also know the federal government – you and me – guarantees the repayment of these loans. And to make sure it happens, the debt is not dischargeable. It’s a modern-day indentured servitude. Let’s compare student loans to the latest government-required red tape on real estate loans. With real estate loans, the lender must follow several steps before making a loan. Weeks before borrowers sign any loan documents, lenders must notify them in writing about such things as the cost of the loan, fees associated with it, condition of repayment, what collateral is required, how much the collateral is worth (appraisal which is totally independent of the lender), various inspections for suit- ability, and, most important of all, the lender must verify the borrower has the ability to repay the loan. Yet with all higher education loans, virtually none of this is required of the school, the government, or the lender. Wouldn’t it be nice for the university to be required to tell Johnny or Julie that signing on for tens of thousands of dollars in debt would result in them having a degree in a field with a 50% unemployment rate and a projected income so low the student loan would take 30 years to repay? Maybe I’m nuts, but shouldn’t the student interested in pursuing a degree in water sports science or puppeteering be told they will have very little chance of gainful employment? “No nation in the history of the world was ever sitting as pretty. If we want anything, all we have to do is buy it on credit. So that leaves us without any economic problem whatever, except perhaps someday to have to pay for them. But we are certainly not thinking about that this early. Yours for more credit and longer payments.” Will Rogers Such full disclosure simply isn’t in the cards these days for student loans because everyone (including the government) is looking for a way to blame someone else for the things they do. The president said he was appalled that the average student loan debt was $25,000 (tuition alone at his school, Harvard is about $40,000/yr.). I don’t know why he is this upset, since the government is one of the root causes for this debt. I just wish he would worry about the average taxpayer’s share of the national debt being five times that amount. Or maybe if he even showed a little concern that our national debt has increased by five times the total out - standing student loan debt of everyone – in just three years. It seems our country is rapidly becoming a nation of dumb squirrels getting flattened on the road, preferring to blame others for the fact that we are too lazy to climb up the telephone pole and safely cross the road ourselves, or while we wait on the road side complaining for others to carry us across in a bailout. “The higher the education, the higher priced drinks they become accustomed to. Prohibition will never catch up with education.” Will Rogers The opinions expressed in the article are those of the author and not necessarily those of KBA. Bill Wyckoff, President, Labette County Bank