The Tiny Little Voice

Intuition isn’t always accurate, but it bears consideration.

October 1, 2012

I am annoyed with The Tiny Little Voice that is inside my head. It likes to boss me around.

When I make decisions or set priorities, The Tiny Little Voice likes to contradict The Tempting Louder Voice. This internal dialog is frustrating but prompts me to consider potential perils of immediate gratification, possible bad results of short cuts, and other unpleasantly responsible sensibilities.

I am not alone in experiencing The Tiny Little Voice. Friends have reported they, too, are aggravated by The Tiny One, and attempts to squelch its quiet urgings frequently are useless, although the battles can be long or hard-fought.

We agree that The Tempting Louder Voice is intriguing but often error-prone. We often innately know what is best; experience is a good teacher.

How often does acumen help us make good business decisions for our members and coworkers, as it might in making personal choices? Are you ever tempted to take a shortcut to save money or time that could have negative impact on member products or services?

Intuition isn’t always accurate, but it bears consideration.

As you review this week’s research, consider what you innately know about your community, your credit union, and your members that you intuitively access to make prudent decisions. How might research contribute to suggestions made by The Tiny Little Voice?

Student and school news

Ah, youth. Do they proceed with the sentiments of Don Henley? “A little voice inside my head said ‘Don’t look back, you can never look back.’” But might youth still regret their debt?

See “Research Updates on Private Student Loans” by The Consumer Financial Protection Bureau. Reportedly, “the mean borrower would have paid a lower interest rate on a Federal Stafford Loan than a private student loan” and “40% of [private student loan] borrowers who also obtained a Stafford Loan did not exhaust the total amount of Stafford loans for which they were eligible.”

Many other private loan borrowers took no Stafford loans at all. Detailed statistics and graphs illustrate throughout the report.

Tiny talk is also found in “The Indentured Generation: Bankruptcy and Student Loan Debt.”  Many student loan borrowers will be saddled with debt for most of their lives, according to this Northeastern University study.

“As of 2010, 54% of students at public four-year colleges had borrowed for education, with an average debt of $22,000,” the study reports. Debt relief provided under the bankruptcy code does not apply to student loans.

This paper provides an in-depth look at this issue, with a detailed overview of student lending, treatment of debt in bankruptcy, economic and social ramifications for these students, and partial solutions to the problem. This study suggests “amending the Bankruptcy Code to allow education loan debt to be modified to its fair market value, with the remainder treated as dischargeable debt.”

Should students be so extending themselves?

Another perspective is provided as “NCES Releases New Data on Postsecondary Tuition, Fees and Degrees.”  The costs of an education continue to rise: “Public institutions reported a 9 percent increase (to about $7,200) for in-state students and a 6 percent increase (to approximately $16,500) for out-of-state students, and nonprofit institutions reported average tuition and required fees of approximately $15,200 for 2011-12.”

Further, see “SAT Report: Only 43 Percent of 2012 College-Bound Seniors are College Ready,” from the College Board. The SAT is an indicator of college success and completion. This data-rich report examines success criteria and indicates where our students stand with regard to college readiness.

If students are not prepared for college, should they gamble on accepting loan debt? What are their options for future success?

Consumer considerations

The definition of a traditional family is changing in our country, and a new MetLife study examines this phenomenon in “The MetLife Study of Family Structure and Financial Well-Being.” 

Some key findings for the whispering angel on your shoulder:

Population Aging Will Have Long-Term Implications for Economy; Major Policy Changes Needed,” according to the National Research Council. “Social Security, Medicare, and Medicaid are on unsustainable paths, and the failure to remedy the situation raises a number of economic risks,” as these programs comprise about 40 percent of all federal spending and 10 percent of the gross domestic product.

“Workers can better prepare for retirement by planning ahead and adapting their saving and spending habits…Improved financial literacy will be critical, since between one-fifth and two-thirds of today’s older population have not saved enough for retirement and therefore rely heavily on Social Security and Medicare.”

Who is ultimately responsible for the maintenance of the middle class? See “Pathways to the Middle Class: Balancing Personal and Public Responsibilities” by Brookings.

Variables to consider include educational attainment and family formation, and mobility between the classes can occur at various life stages. This paper explores this concept and states “By the time children can be reasonably held accountable for their choices, many are already behind because of choices their parents made for them... Putting the full responsibility on government to close these gaps is unreasonable, but so is a heroic assumption that everyone can be a Horatio Alger with no help from society.”

Tap into your reservoir of good and prudent thought and let The Tiny Little Voice be heard.

It is, perhaps, as Christopher Reeve once remarked, “I think we all have a little voice inside us that will guide us…If we shut out all the noise and clutter from our lives and listen to that voice, it will tell us the right thing to do.”

LORA BRAY is a research librarian in CUNA's business-to-business publishing department.