If You Lied About The Product, Can I Get My Money Back?

This is a hot take on the ethics of the student loan forgiveness situation. As with all hot takes, I may later have to repent, and if that turns out to be the case, I’ll link it here. <- If that’s not a clickable link, then I haven’t changed my mind.

If you borrow money, then you should pay it back. I think we all agree on that; it’s basic ethics.

If someone sells you a product, and it turns out they lied outrageously about the product, you should be able to get your money back. I think we all agree that, too, is basic ethics.

It’s easy if the product is a physical item. If I buy a brand-new carbon fiber tennis racket from your eBay store, and what you actually send me is a cracked wooden racket you found in your grandma’s attic, the situation should be easy to remedy: I give you back your granny’s broken racket, and you give me back my money.

It’s harder if the product is an experience or a service. As a massage therapist, if I don’t deliver on what I promised my client in the session, do I give his money back? He can’t give me my hour back, so it’s not quite like returning a product. But still, YES, I give his money back. Now it may be that what I promised was entirely unlikely, bordering on impossible, and any reasonably-informed consumer ought to have known better than to believe me. I don’t get to keep the money because my client was a sucker who should have known better. If I walk away with his money telling myself, “Well, I guess he learned a valuable life lesson,” I’m not an honest businessman, I’m a con artist.

Suppose he didn’t pay up front; I agreed to finance the cost over time, so my customer can better afford my services. If I delivered what I promised, then he ought to follow the payment schedule he agreed on. If I did not deliver what I promised, then I ought not to expect payment. “You agreed to pay” is nothing to the purpose if I didn’t hold up my end of the bargain.

We lied outrageously to an entire generation about college. And grad school.

This situation is much messier than the above scenarios, and I’m not trying to pretend it’s as simple as all that. I am seeking to introduce some balance into the discussion. “You should pay back what you borrowed” is a relevant ethical principle, but so is “You should refund when you lied about the product.”

To be fair to the education-debt-mongers, the life script they were selling (higher education as a ticket to a better salary and standard of living) did actually work, once upon at time. I’m prepared to concede that even as late as the early 90s (my era) a conscientious high school guidance counselor could sell that life script in good conscience. Now, for a great many of us, that script was going to collapse, but they didn’t know. They were doing the best they could with the information they had. Nobody owes us a refund for that.

But in 2005? 2010? Come now. That’s at least culpable negligence, if not outright lying. By that point, we had every reason to know that a $50,000 degree in medieval French literature, or gender studies, or English, was wildly unlikely to put the graduate in a position to pay back the student loans. What did we do? We kept stuffing kids into the debt machine. What did we think was gonna happen?

But someone will say, “Nobody put a gun to their heads! They signed the loan agreements of their own free will!”

Imagine a doctor is treating a patient. He prescribes a particular medicine, encourages the patient to take the medicine, and has the patient sign a bunch of “informed consent” documents to the effect that medicine is not an exact science, this is just a recommendation, etc. It later comes out that multiple studies published years earlier had found the drug ineffective, and the doctor had every reason to know about it. Perhaps we can’t be sure that he did know about it, but we can be sure that he should have known about it — it was his job to know. In that scenario, refunding the money the patient paid for the medicine is the very least we expect.

In fact, we are likely to regard the refund as far too small a response. The doctor needs to be censured; the drug should no longer be prescribed for that condition, and so on. We would want to see systemic change.

Just so. The unsuspecting 18-year-old signing a student loan document has a very limited knowledge of the world. He’s legally an adult, but he’s not a real adult, and we all know it — we won’t even let him buy a beer! He’s heavily reliant on the older and putatively wiser people around him. Those people failed him, extravagantly and negligently. There’s no reason the kid should carry the whole cost while the negligent adults skate. Nothing is sillier than the Boomers whose generation unquestionably created the bubble bitching because Millennials and Gen Z don’t want to shoulder the whole cost of the collapse. Why should they?

Conservatives will complain that they were never in favor of the student loan bubble to start with. There’s some truth in that, and it’s worth a good, solid “I told you so!” from them that did. But this is just the way the world works. All Germans were not universally in favor of Kaiser Bill’s foreign adventures, but they all labored along under the devastating effects of the Treaty of Versailles anyway, dissidents and true believers alike. Conservatives are supposed to know better than to kick at how the world actually works; we use our energy in more productive ways.

So this is how the world actually works: an influx of too-easily-available money created what easy money always creates — massive decadence and waste — and the result is likely to be very costly for everyone. No sense in complaining about that. Forgiving at least some of the student loan debt that was foisted on unsuspecting 18-year-olds is too little, too late, but we are where we are, and it’s not the worst possible starting point.

What we should be doing now is what Microsoft used to do with public standards: embrace and extend. “Joe Biden has heroically taken the first small step toward a long-overdue overhaul of a very broken system,” we should say. “We’re grateful for him beginning the process; let’s all work together to finish it.” And let’s do exactly that.

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