Mired in debt, was the education worth it?

<p>I'm no good at linking but here is the address at the New York Times for a sad, sad story that calls so many things into question. Your</a> Money - Another Debt Crisis Is Brewing, This One in Student Loans - NYTimes.com</p>

<p>The author places the most blame on the university for the misfortune of a NYU graduate with an interdisciplinary degree in religious and women’s studies who is now struggling to pay her nearly $100,000 student loan. But then the commenters rip into the graduate for being foolish enough to get herself into this mess.</p>

<p>Although it’s a sad situation, I must agree with the commenters. However, if this bailout trend continues, we’ll all (taxpayers, I mean) be paying for this idiocy.</p>

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However, if this bailout trend continues, we’ll all (taxpayers, I mean) be paying for this idiocy.

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<p>So taxpayers will bail out others for the NYU experience that their own children could not have because they knew that they could not afford to attend. Sounds real fair to me. :mad:</p>

<p>^^ She isn't yet paying her loan. It is deferred while she is in night school, according to the article.</p>

<p>What is she waiting for? The bailout?</p>

<p>Maybe she is going to get an advanced degree that is more marketable than religious and womens studies.</p>

<p>why do I feel no sympathy for people who put THEMSELVES into this situation.</p>

<p>100K in debt for ANYthing other than a doctor or lawyer (maybe) is INSANE.</p>

<p>to blame anyone other than herself is wrong.</p>

<p>sueinphilly, I blame others too. I blame the mother, the school who directed her to as to where she could find more loans even after being rejected by one source, and the people who loan the money. Frankly, I even blame our government for not finding a way to put a stop this kind of behavior and I am not necessarily for a nanny state. I will leave it at that, bc this is not the political section of cc.</p>

<p>I started a thread on this article on the Financial Aid forum. As I noted there, I believe financial literacy via a Personal Finance course should be required for HS graduation and it might prevent these sorts of personal disasters.</p>

<p>I see a more complicated picture: we on CC all know that a high-level university education is a holy grail for many people. The University financial aid office RECOMMENDED that this teenager take out a $40,000 loan on top of a great deal of other debt, despite the fact she'd been turned down by Sallie Mae. Citibank was happy to make a such a loan. And she and her mother, neither of whom had even a BA, were lulled into a false sense of security because they naively trusted NYU and Citibank.</p>

<p>Yes, the student and her mother are responsible for their mistake. But NYU evaded its responsibility to its student, and Citibank is just plain reprehensible to have made such a loan.</p>

<p>nj2011mom, I agree. I also think that it is so hard for a person who has not had to pay bills yet, or had had full time job yet, to understand what 100,000 in debt means. </p>

<p>Also, I can see how one can lose the big picture about debt over time. For the first year it might be 8,000, then for the second year one may need to borrow 15,000, and so on. Then one might get a W or D and need to borrow an extra 7,000 for summer school to make up one class bc they cannot take that class elsewhere, by senior year the grand total is huge!! An outsider can just see it unfold, but the student may not really see any alternatives and begin to think that this is amount of debt is the norm. It can seem like Monopoly money since a full time student may not be making payments while taking on the debt, and not working at a job (other than work/study).</p>

1 Like

<p>Gwen, well said! I agree with your post 100%.</p>

<p>As I was reading the article, one word that kept on popping into my head was "idiots." </p>

<p>Why would someone take out so much loan to be a photographer assistant? What kind job did she think she was going to get after graduation?</p>

<p>Why would any bank give a loan without a guarantee or collateral?</p>

<p>If a school is meeting "100% of FA needs," loans should be limited as part of the total package. Families should compare FA packages without loans.</p>

<p>The mother was the biggest idiot and most irresponsible. Our primary responsibility as a parent is not put our kids in harms way. This mother, due to her own vanity and ignorance, did just that.</p>

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The mother was the biggest idiot and most irresponsible. Our primary responsibility as a parent is not put our kids in harms way. This mother, due to her own vanity and ignorance, did just that.

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<p>Agree. </p>

<p>I also think that there should be outside protections for young adults because you can see that not all lenders, schools, or parents are going to guide a young adult to keep them out of harm's way (whatever their agendas might be).</p>

<p>"I started a thread on this article on the Financial Aid forum. As I noted there, I believe financial literacy via a Personal Finance course should be required for HS graduation and it might prevent these sorts of personal disasters."</p>

<p>I'd rather this be a 1 week type of thing. A class about this would basically be a course on memorization of a book + study hall. Either way, the whole idea is that you have to throw numbers infront of people and make them understand them. </p>

<p>"Yes, the student and her mother are responsible for their mistake. But NYU evaded its responsibility to its student, and Citibank is just plain reprehensible to have made such a loan."</p>

<p>Personally I would think the if we're going to talk about who is "worse" I would think NYU is. Citi is still risking their own money, NYU is guaranteed to get their money. You don't expect a bank to tell you when it's good or bad to take on debt, it might be somewhat reasonable to expect the university you're planning on attending to, or at least it's more reasonable to expect that than from the bank. Banks don't pose as institutions which have your best interests at heart (infact, the first thing I think of when I hear "bank" is a group of armed mobsters), colleges do.</p>

<p>Anyway, she made a stupid decision. She made it over and over again. She did it continuously for 4 years. Hell, a murderer only made one bad decision and they go to jail for the rest of their life, I don't see how much sympathy I should have for her.</p>

<p>Some interesting quotes from the article with my thoughts:</p>

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They and their families made borrowing decisions based more on emotion than reason ...

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<p>And the families made decisions in part because this generation of parents has a hard time looking at children and saying, "No. We can't afford that."</p>

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...lenders who underwrote big loans without any idea of what the students might earn someday.

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<p>This is decidedly not the fault of lenders who made these loans based upon pure business decisions. One of those factors is, as noted in the article, the protections offered by bankruptcy law. If that protection for lenders was repealed, lenders would not loan to women's studies majors, art history majors, etc. They would cap loans made to education majors, music majors, etc. Maybe that's more desirable. Maybe tuition for a women's studies major should be 60% of the tuition for an engineering major.</p>

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...it’s a shared failure of parenting and loan underwriting.

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<p>It is not a failure of underwriting unless the bank loses money on the loan. Underwriters don't exist to protect borrowers; they exist to protect lenders. The failure here is not "shared."</p>

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...she borrowed ... without thinking much about how she would pay it back.

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<p>Of course, this is the number one problem with borrowing, credit cards, adjustable rate mortgages, etc. But this is only useful as a cautionary tale. It's not a justification for inability to pay.</p>

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...she also badly wants to call a do-over on the last decade.

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<p>My favorite. If I could have a few do-overs I would have been a stock-broker during the .com boom and shorted the market before the sub-prime crisis. I'd be sitting pretty about now. But, alas, I have to live with my decisions. Why do students in debt think they don't have to live with theirs?</p>

<p>Of course, people are looking to government for solutions - another bailout perhaps. Government was the major contributor to this problem; easy money and free money drove the costs of education through the roof. There needs to be a recalibration of educational costs and that requires a reduction in the money supply available to colleges/universities. Painful? Yep. The best solutions often are.</p>

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degree in religious and women’s studies

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<p>Haha wow. Smart enough to get into NYU but then you go and do this.</p>

<p>I find equally distasteful the "for profit" schools (Phoenix, Strayer, etc). While some feel they offer a great alternative, especially to the non-traditional student, they get a large percentage of their $$ from federal loans the students take out. So the stock values of the parent companies (Apollo group, etc) are doing wonderfully, but all too often at the expense of the students who may be unable to pay back the loans, and the taxpayers who may be stuck with the cost of unpaid federal loans.</p>

<p>Anyone who incurs that amount of debt has no intentions of paying it off. They will cry, scream and holler or pretend they were tricked. I hate to sound uncaring but my sympathies are reserved for all the young people who made wise financial decisions by going to a CC or postponing college, working/saving money to pay for their education.</p>

<p>I have a nice young intern who is in his 2nd year of a 4 year pharmacy program. He is married and I think both he and his wife have small undergrad loans. They just had a baby and his wife is now a stay at home mom. He is taking out loans for the pharmacy program. While it is true pharmacists are well paid I am baffled as to why they didn’t wait 3 years to start their family.</p>

<p>^^ Maybe he hasn't gotten to the chapter on birth control in the pharmacy texts yet? ;)</p>