I'm Graduating From A College I Can’t Afford - NYU

[ellemenope]

>>A situation like this is when parents have to step in for a dose of reality -- that is, if the parents aren't in denial as well about the ramifications of this dream school.<<

Her parents didn't seem in denial. Told her that the school was unaffordable with their middle class status and that she'd have to take most of the loans out for herself. Most parents know what $90K debt feels like. Maybe they didn't emphasize what a nightmare debt load that would be.

But sometimes you can't tell kids anything...let's hope that she'll have a great job after graduation. Too bad that Wall Street is tanking, just when she'll need that high paying job.

I agree with ebeeeee that it's not NYU's fault that this student was allowed to take on so many loans. The entity that has the best chance of being a brake on the process is the student loan lender...if a person takes out too many loans, their chances of default increase and the lenders could be left holding the bag. The fact that THEY are willing to loan that much $$ to a student who already has massive amounts of loans is definitely why we are in a financial crunch today. Banks did the same thing with homeowners--lending gobs of money to people who wouldn't be able to pay back.

[ebeeeee]

Not NYU's fault. So by your analogy if I go to Best Buy and buy a large screen TV I can't afford by using credit card debt it is Best Buy's fault??
The student and her parents knew exactly what they were getting into. If they didn't it is their own fault for not doing their own homework and making rational decisions.
It is thinking like this that has our country in the bailout we are in now.

[tenisghs]

I still don't understand why they put their child through this situation. If she cannot pay back the loans, the parents will have to contribute unless they want her credit rating to be poor (what if she wants a car? apartment??). I know it's "tough love" but really, this is a very scary punishment. The parents should have stopped her from going down this path.

[jchen09]

Am I the only one who found this scary? She didn't take challenging classes because she wanted to learn; she didn't play soccer because she enjoyed it; she didn't join clubs because they were fun-she did everything because she wanted to get into a "better" college. Is this the type of student the "better" colleges actually want? I am somewhat horrified at the prospect that these kind of people will be the future leaders of America.

You have to realize that if you question most highschool students, and ask what is the point in getting good grades, almost all will say, "To look good for college" or "I need good grades to get into college" rather than saying "I like to learn." You'll find very few students that study just for the sake of higher learning. I think that the only people that try to do well for highschool other than to look good for college, are the people that are not personally happy with themselves unless they know they are trying their hardest.

[taxguy]

I do feel sorry for this girl. I have been a frequent poster on CC advocating AGAINST taking out large loans for any undergraduate school.

See Should you incur substantial debt for dream school or even pay the "dream" tuition?

Sadly, CC felt that this thread should no longer be a featured thread. I generally feel that my advice is "blowing in the wind" since most folks here have a "cost be damned" attitude.

[starbright]

I can imagine an impressionable teenager coming to CC, and coming to the belief that life is over if you don't go to the absolutely best school you can possibly get into. The hype has gone to ridiculous proportions on CC and society at large. No, I'm not talking about the parents forum, but the rest of CC promotes this focus on rank to silly levels.

Whats really sad is it's not just teens, but a huge chunk of the population that buys into the marketing and media hype of USNews and academic institutions with large budgets. The rankings don't have a sound basis in reality (in that the reality is the differences between these schools is not what the hype and ranks suggest, the differences to the INDIVIDUAL are probably negligible, and the truth is you can go all kinds of routes to a great life without going to a top 10, top 20, top fill-in-the-blank school).

For kids from wealth, the above doesn't matter, they can purchase the hype and hey, its a nice bumper sticker. For kids from less than wealthy backgrounds, it is sad they've been sucked in.

[Hanna]

"I know it's "tough love" but really, this is a very scary punishment. The parents should have stopped her from going down this path."

I agree. The article makes clear that the parents disapproved, but ultimately cooperated with her decision. I think I'd put my foot down in this situation. You can't stop her from going, but you don't have to co-sign the loans or anything else. She says her parents sat down with her and helped her make a financial plan for NYU. 18-year-olds are legally adults, but I'd do just about anything I could, short of ending my relationship with the child, to discourage her from making a bad decision with consequences as far-reaching and long-lasting as this one. Maybe the parents wanted to make sure she'd move back home?

That being said, I do think NYU's relationship with its students is and ought to be different from the relationship between Best Buy and its TV purchasers. Best Buy doesn't claim to be interested in you as a person, it doesn't claim to be a community, it doesn't claim to help teach you how to be a productive adult.

[nysmile]

Why suggest that NYU is at fault? She knew she couldn't afford it. She wanted it anyway. She took the risk in loans to get what she wanted. End of discussion. It's a business. She wanted the product. She knew she would have to go into major debt to buy the product. She bought the product anyway. It isn't the college's responsibility now to go out and find her a job. It isn't the college's responsibility now to help her figure out how she's going to pay back her loans. She bought an education. She didn't buy a guarantee for success.

Colleges sell a product. As long as people are willing to pay their price, why not continue charging the high tuitions and costs? As crazy as it seems--there are people on waiting lists eagerly awaiting their turn to pay.

[hmom5]

I also feel sorry for her. Many 18 year olds have no clue about loans and what they will mean and many have parents who also don't know. I've taught personal finance to teen girls for many years and stay in touch with what many kids learn about finance at home. They think borrowing for whatever you need or want is the way everything is paid for. Their TV is 22.95/month, the sofa they watch it from $19.99/mo. and they have clothes on lay-a-way. Then before ever leaving home they are faced with making a college financial decision they are making with no education and can end up hundreds of thousands in debt. Only in America!

[Anon_Person_1]

I feel no sympathy for her...and that's from a hs senior. She gets what she wants...I know many people like this at my high school who are taking out $200,000 in home equity with their parents for their dream colleges...I just don't get it

[jonri]

First, please note that this young woman does NOT regret what she has done.

Let me tell you the difference between NYU--or really Citibank--and Best Buy. Nobody would have given her $80,000 to spend at Best Buy. If she did and was unable to pay back the loan, she'd go bankrupt. While for many years( since about the mid-70s or so) student loans from the government couldn't be discharged in bankrupcty, it's a recent innovation for PRIVATE educational loans to be non-dischargeable. Thus, banks are willing to loan for them at debt levels nobody should take on because the banks know that no matter how onerous the debt loan, the student can never escape it.

That's why Citibank was willing to loan the money.

As you may remember, the Attorney General of the Sate of New York launched an investigation into the kickbacks student loan companies were giving to colleges and financial aid employees. The fin aid folks weren't about to tell Janie or Jimmy that
(s)he shouldn't take on the debt, because the schools were getting money from the loan companies.

This young woman is actually in a much better position than many young people, because she is close to the finish line and is almost certainly going to graduate. The ones I really feel sorry for are those who go $40,000-$50,00 in debt for one or two years of college and don't finish.

[Nrdsb4]

"They think borrowing for whatever you need or want is the way everything is paid for. Their TV is 22.95/month, the sofa they watch it from $19.99/mo. and they have clothes on lay-a-way."

Hey, don't knock lay away. It's not borrowing at all. They hold the merchandise in your name, and you must save for it and pay in increments (your own money, no interest) until you have enough to make the purchase. Only after you have saved the money and paid for the item do you get to take it home. This is in contrast to charging the item and enjoying it before you have actually earned the money to pay for it, then carrying a balance over on the credit card and paying interest for the item for months.

Does anyone really offer the lay away plan anymore?

[taxguy]

I see folks complaining that the parents didn't protest enough.

Have you ever had a very stubborn child who was dead set on something? It is very hard to say no! Moreover, the high schools are also at fault. Many high schools try to get kids to apply to the "best' or "those with tougher admission standards."

Certainly, at our high school,which may be indicative of others, NO DISSCUSSION occurred about whether a family can afford the tuition or about financial planning. No high school counselor asks the questions, "whether these kids should even apply or go to expensive schools." The attitude is that colleges will provide the necessary need based aid...as idiotic as that may be.

This poor girl and to some extent her parents were simply victims of the system design to make them stupid and to buy into the myth that expensive schools or those with tougher admission standards are necessarily much better and will meet all or most of your expected need.

[ebeeeee]

I still feel my analogy holds. She bought a product she really couldn't afford. Still don't see how this is NYU's fault.

[CountingDown]

Students and parents -- TALK to each other about money before that ED envelope arrives in the mail! Freshman year of HS is not too early, IMO.

Hope this young woman majored in something that is well-paying, and that she doesn't mind living at home while she pays off her "brand name" degree. Yikes. This is certainly a cautionary tale for families with students currently applying to colleges.