Student debt (and responsibility)

[RydiaLockheart]

I read this story when it appeared in the NYT. It bugs me.

Now, I understand student loans, student debt, and all, as I am dealing with it myself. But the only people to blame for Cortney Munna's student debt are Cortney Munna and her mother, who should have known better and advised her accordingly.

This is exactly what got us into the financial crisis: people trying to buy stuff they can't afford. No way could she afford to go to that school. I understand how onerous student debt can be, but how about some personal responsibility here? I'm tired of her being made out to look like a martyr.

[MrHero17]

"After taxes, she takes home about $2,300 a month. Rent runs $750, and the full monthly payments on her student loans would be about $700 if they weren't being deferred, which would not leave a lot left over."

850$ a month seems like enough money to eat off of.

I think the article did a good job of saying that the blame for a situation like this can be spread around. Citi bank probably shouldn't have given them a loan and the family should have had a more realistic expectation of what they could afford.

Still, at 22$ per hour I can't really see this girl suffering to hard.

[SmilezRoyale]

At 6/1/10 08:12 PM, MrHero17 wrote:

I think the article did a good job of saying that the blame for a situation like this can be spread around. Citi bank probably shouldn't have given them a loan and the family should have had a more realistic expectation of what they could afford.

Still, at 22$ per hour I can't really see this girl suffering to hard.

If Citi Bank refuses the loan they would probably be another story on how greedy banks are hoarding their money and not loaning it out so that students can get the proper education they need, plus the whole 'stimulating the economy argument'. I'm not saying that the banks aren't greedy of course.

[SevenSeize]

I agree with you 90087%

I feel NO sympathy for all these retards who are 100K in debt because they have huge frickin houses and expensive vehicles.

Economy 101: DON'T BUY CRAP YOU CANNOT AFFORD.

I still live in a crappy trailer. We make around 6 figures a year, but we still live in the crappy trailer, because we can't afford a house yet. We owe on student loans. When we get to where we don't owe much, then we'll look at a house. Could we get a huge house now? Yes. We have good credit.

But we don't have retardation.

My state is doing something now where if you have a scholarship through the state, then go to college and flunk out within the first semester, you have to pay that money back. And I support that. If they give you a few thousand dollars to go to college for free and you blow it all, you should pay it
back.

[SmilezRoyale]

At 6/1/10 09:39 PM, SevenSeize wrote:

I still live in a crappy trailer. We make around 6 figures a year, but we still live in the crappy trailer, because we can't afford a house yet. We owe on student loans. When we get to where we don't owe much, then we'll look at a house. Could we get a huge house now? Yes. We have good credit.

But we don't have retardation.

Maybe the government should stop encouraging loans in the first place and so colleges would have to lower their prices.

Of course you're right on the whole responsibility thing, but still.

[RydiaLockheart]

At 6/1/10 09:47 PM, SmilezRoyale wrote: Maybe the government should stop encouraging loans in the first place and so colleges would have to lower their prices.

Even with reasonably priced colleges (my undergrad was roughly $12,000/year), most people do not have $75k stashed away somewhere even if they make a good deal of money, so this is where loans come in. But I think the difference between me and this girl is that my parents and I planned. I didn't go to an exorbitantly priced school and we took out what we needed, then paid lots at a time so we didn't accrue too much interest. My undergrad years are all paid off, and my first graduate degree will be paid off in about 3 years. As for this degree, I'm a bit worried, but if I get a decent job I can consolidate the loan, and the interest is being paid off while I'm in school, which is a big help. Plus, I'll return the money I don't use at the end of next year.

I agree with you that college should be more accessible, but I think that's another debate altogether.

[RydiaLockheart]

Someone just sent this to me.

Relevant SNL sketch.

[EclecticEnnui]

At 6/1/10 09:22 PM, SmilezRoyale wrote:

At 6/1/10 08:12 PM, MrHero17 wrote: I think the article did a good job of saying that the blame for a situation like this can be spread around. Citi bank probably shouldn't have given them a loan and the family should have had a more realistic expectation of what they could afford.

I agree. I don't think responsibility should always fully go on someone who commits an act like this. Unfortunately, people and their parents can be naive about things, so sometimes there should be an outside party who stops or at least tries to convince them to rethink what they're doing. Of course, if said party only controlled or helped make decisions on what people do, then those people would lack personal responsibility. There should be some kind of balance. I dunno; maybe I'm just a wishful thinker.

Still, at 22$ per hour I can't really see this girl suffering to hard.

This might be a stupid question, but does rent cover electricity, water, and heating bills? Are those the sole purposes of rent money? Yeah, I don't even know. I also don't know how much money on food will get you by. $100 per week? If the answer to my questions are yes, maybe it isn't that tragic.

If Citi Bank refuses the loan they would probably be another story on how greedy banks are hoarding their money and not loaning it out so that students can get the proper education they need, plus the whole 'stimulating the economy argument'. I'm not saying that the banks aren't greedy of course.

But the problem obviously is if too many people don't pay their loans back, then that doesn't help them or the banks. I don't know much about banking, but I know Citi "lost $7.58 billion during the final three months of 2009 as consumers still struggled to repay loans and the bank repaid its government bailout money".

[RubberTrucky]

I don't get American colleges. I went to a reasonably good university and had to pay EU530 a year. In America that amount is apparently 20 times as much or so...

[SadisticMonkey]

At 6/2/10 05:41 AM, RubberTrucky wrote: I don't get American colleges. I went to a reasonably good university and had to pay EU530 a year. In America that amount is apparently 20 times as much or so...

do they have student loans where you live?

[LordZeebmork]

"They and their families made borrowing decisions based more on emotion than reason, much as subprime borrowers assumed the value of their houses would always go up."

And they got what they deserved.

Seriously, it's not that hard to get through college without owing that much. Even if you can't get a job for whatever reason, there are always scholarships; I got National Merit Finalist, so there are a few colleges that would give me full scholarships. I'm not going to any of those colleges, but I could still get through college without taking any more loans, since my parents know how to handle money. (It's not that they make that much money. They both work for the government, and my father never finished college. They just aren't retarded.)

Besides, she must have known that she'd have to pay back the loans eventually. So, of course, she'd go into a field that can bring in money, right? If you're taking loans, you probably shouldn't be majoring in "religious and women's studies".

There were other ways for her to get money, there were less expensive colleges that she could have transferred to, there were real subjects that she could have majored in instead of dicking around with liberal arts nonsense, and I doubt it's that hard to live on $850 a month after rent.

At 6/2/10 03:54 AM, EclecticEnnui wrote: I also don't know how much money on food will get you by. $100 per week?

$14/day? Are you kidding? You shouldn't even need half that. If nothing else, rice, beans, pasta, and ramen aren't that expensive, but when I was going to college in Massachusetts, I lived within walking distance of a dollar store. Fuck yeah, six energy drinks for a dollar.

At 6/2/10 05:41 AM, RubberTrucky wrote: I don't get American colleges. I went to a reasonably good university and had to pay EU530 a year. In America that amount is apparently 20 times as much or so...

You probably pay EU530/year when you're in college and some (probably significant) amount in taxes for the rest of your life. That's the fun part about socialist programs, I guess: the cost is hidden from the buyers. And everyone else who pays for them.

[gumOnShoe]

I'm actually in the exact situation described and for now I'm making it work. I don't know what I'd do if I lost my job, though, and frankly while I can't imagine not doing what I did, I can't claim I made an informed decision either. I also can't claim I made the right one. I take full responsibility for what I did, but there are a couple things that pressured me to my decision and very little that dissuaded me at the time.

First, the college I went to floated job payment numbers for what I could expect at nearly twice the amount I make now.

Second, the college did not attempt to really make me understand how much 4 years of education would cost.

Third, the bank was recommended by my college and instead of taking my history into account pretty much tried to make it easy and glossed over everything. I had to sign a note that said I understood it and take a test on what the loan meant, but I don't believe today that I should have been approved for the loans I was given to begin with, and I think the process was geared towards getting me to sign, not making sure it was a good decision for both parties.

Fourth, certain laws make giving these loans out far too easy and as such, schools raised their prices because people could afford larger loans, not because they needed the money. The pr involved with getting students to go to school basically goes "This place is awesome, we'll teach you what you need, student aid is available to everyone." Essentially, a lot of these places have turned college into a money pump where people mortgage their future for a temporary fix. I knew this going into it, and laughed uncomfortably about it often enough, but I still believe it was rather immoral all the way around.

Fifth, society pushes us to go to college and to excel. I had been taught that in order to do well I needed a great education, so I went to a great school. But frankly, that was a lie and I don't really think what I was sold was worth what it was valued at. Had it been I would have gladly paid what I did, but I do feel there was an element of fraud involved.

And finally, while I agree students need to take some ownership that they haven't been for their decisions, I find it pretty low to take pot shots laughing at these people. And when it comes down to it, this trend is going to make life harder for all of us later. A population burdened with school loan debt, that has to take on more debt to meet basic needs (transportation/housing/kid's education) will eventually be a huge economical drain on this country and it is unlikely that the banks who profit the most from this will reinvest the money in the american economy. Instead they will siphon it off into gambling in stocks to make CEOs richer and foreign powers more powerful.

All in all its part of a larger vicious cycle that will hurt everyone.

[JeremieCompNerd]

College is a money pit where you pay an excessive and ridiculous amount today, pay interest on it every day from now until your sixties, and make just enough more to pay that interest. You'll be stuck with the massive debt forever. I honestly refuse, I can learn anything they teach at college online for free poking around wikipedia in my spare time. College would mean something if the cost was low enough for everyone to go without accruing massive debt, or if few enough people went that it meant something anymore, but for now it's become the expected. It's just the way things are done in America now, you set up massive loan debt and get the same shiny piece of paper as your neighbor.

[EclecticEnnui]

At 6/2/10 11:53 AM, LordZeebmork wrote:

At 6/2/10 03:54 AM, EclecticEnnui wrote: I also don't know how much money on food will get you by. $100 per week?

$14/day? Are you kidding? You shouldn't even need half that. If nothing else, rice, beans, pasta, and ramen aren't that expensive, but when I was going to college in Massachusetts, I lived within walking distance of a dollar store. Fuck yeah, six energy drinks for a dollar.

I was probably thinking about a family of four, like mine, because my mom once said about $100 was spent on groceries in a week. Yeah, less than half will do. My bad.

[Malachy]

At 6/2/10 03:11 PM, JeremieCompNerd wrote: College is a money pit where you pay an excessive and ridiculous amount today, pay interest on it every day from now until your sixties, and make just enough more to pay that interest. You'll be stuck with the massive debt forever. I honestly refuse, I can learn anything they teach at college online for free poking around wikipedia in my spare time. College would mean something if the cost was low enough for everyone to go without accruing massive debt, or if few enough people went that it meant something anymore, but for now it's become the expected. It's just the way things are done in America now, you set up massive loan debt and get the same shiny piece of paper as your neighbor.

Student loans are often paid off in 10, 15 or 30 years, so you are not burdened with the debt "for life" or "until your sixties" for most students. The federal student loan programs have a cap on the number of years you will need to pay, and if you haven't paid it off in that time, the remainder is forgiven. There are also programs to forgive debt for graduates going into teaching, government or social services. It is not perfect, but few people are stuck with student loans for more than 20 years. A 30 year payment track is unusual.

A rule of thumb I learned a long time ago about student loan debt was to make sure that the total loans you plan to take out are equal to or less than what you expect your yearly salary to be after you graduate (starting pay). So, if you are going to be a doctor, it's reasonable that you might have nearly $100,000 of student debt because base pay in some areas of the country for doctors is more than $100,000 starting salary. Same for other professional degrees like law, research PhDs, business, etc. What is difficult for many students is when they have a major that is not giving them technical skills for any particular field, like the girl in the story. Somebody who majors in religious and women's studies is probably not going to find a job utilizing that degree and it is hard to determine what a starting salary could be. NYU very well could have lumped her major with social science students who went on to work in professional fields for their "base pay" handouts.

I don't want to say that we are overeducating students, but I feel like many undergraduate studies put too much emphasis on majors that interest students rather than on majors that provide tangible professional skills. Trying to determine exactly what you will get as starting pay is becoming harder and harder, and trying to figure out just what your education is worth is too. And during this recession (and in the early 2000s recession) public universities are finding themselves cut off from state funding, having to raise tuition to continue the wide array of programs they offer. Coupled with lower endowments and alumni donations, the way schools make up the difference by increasing tuition and mandatory fees.

All of this increases the price of an education while at the same time overvaluing what students are given. Probably the best example of what college should look like is the community college systems across America. Community colleges often provide more than just liberal arts education and have competitive professional programs like nursing, rad-tech, massage, and other applied sciences that are useful to the student as soon as they graduate and provide needed skills to delve into that profession. They are also funded by the communities that surround them, so its the locals who are on the board of trustees, county legislatures, town councils, etc that decide the funding and the path of the college. And because of the smaller scope of education provided, a community college is a steal for any student looking to move on to a bachelors degree later on. That's what I did and I didn't take out any student loans at all for the first half of my education. I came out of a bachelors degree with less than $20,000 in debt and am more financially secure to attend law school in the fall.

[Zoraxe7]

I decided after high school to get a job first, get some experience in the real world and some money first, then go to a cheep 2 year college when im ready (and finish at a 4 year university after). Thats my plan anyways.

Its a modern myth that people can only be successful if they go to college, so people (often encourage by their parents) go to expensive school right out of high school. The high schools themselves arnt helping either.

Not to mention propaganda

[Elfer]

How about: If you're not rich, either don't go to an expensive school or don't take a liberal arts degree, but for fuck's sake don't do both.

People need to realize that non-vocational degrees are largely a luxury, and that maybe taking four years off of work to study your interests at an expensive education institute is not a luxury that everyone can afford.

If people would stop and think before making decisions, maybe they'd realize that no school is a magic "top school" in every single field that will guarantee you a high-paying job no matter what you study.

[Auz]

At 6/2/10 05:41 AM, RubberTrucky wrote: I don't get American colleges. I went to a reasonably good university and had to pay EU530 a year. In America that amount is apparently 20 times as much or so...

Let me guess: You live in Belgium?

I think Americans have to pay a lot of money too. I live in Holland and we have to pay about EU 1600 per year. Without having to take any student loans, I get around EU 1200 as a "gift" from the government and I have free access to public transport on normal weekdays.

Currently they are considering stopping that EU 1200 gift and turn it into a loan system. Can't blame them since we must be like... one of the only countries where students get free money. But in my opinion, they gotta lower the college money along with it if they don't want highly educated students moving to Belgium (which isn't gonna be good for our country).

Anyway, I think the Americans simply have to pay the 'true costs' for an education, which is around EU 25000 here I believe.

As for the article, I can't say I feel sorry for the girl and her mother. Like someone already stated before me, those $22/hour she earns at the moment seems enough to me to live a normal life. On top of that I think they are the ones who were being irresponsible with those loans. Surely the banks should've given them some advise before they started the loan, but all banks want is money and that's simply how the world works. I think the girl and her mother were being naive and are mostly the ones to blame for this mess.

On a sidenote: It's gotta suck though that you spend all that time studying to get a good job and then have to pay back so much that you still can't afford more than the average highschool graduate. For the next couple of decades at least.

[Camarohusky]

The responsibility lies solely with the student and his/her family. I'm pretty sure she had choices other than NYU.

I know college is an investment and a great university is a great invesment, but as with all investments, they may not pan out, especially if some improper choices are made.

What major is she in? How hard is she looking for a serious job? How well is she living? Those are all things students who cannot afford school must think of. A student who cannot afford the students loans on their own should probably pick a practical major. They should also be looking for jobs like their life depended on it. Finally, they should be living as cheaply as possible to stretch the money.

I don't believe the sob story that she got "suckered" into debt by Sallie Mae, Citibank and NYU. There are tons of resources to know how much tuition and fees costs. Then just add a bit of taking it in the butt for the interest and you should have a good idea. I'm in Grad School and I know my debt is going to astronomical. However, I have chosen a degree that will give a good opportunity to work in a very lucrative field.

It's all about planning and thinking ahead.

[RubberTrucky]

At 6/2/10 06:42 AM, SadisticMonkey wrote:
do they have student loans where you live?

Yes, you can get scholarships. they are granted if your family has low enough income and your grades are high enough.
Mostly they are students who no longer live at home, though I get that a lot of people can apply for those.

At 6/2/10 11:53 AM, LordZeebmork wrote:
You probably pay EU530/year when you're in college and some (probably significant) amount in taxes for the rest of your life. That's the fun part about socialist programs, I guess: the cost is hidden from the buyers. And everyone else who pays for them.

To be honest, being part of the woking people now, I feel after taxes are deducted I make enough money to make it through the month still.

A lot of people bitch about the taxes eating away from their paychecks, but it's not like a lot of people live in poverty conditions because of it. Or at least, not that I know of.