When Drowning in Debt for College Doesn't Pay Off
When is it time to head to a cheaper school?
Commencement time brings plenty of reflections on the worth of a four-year degree. The Wire already brought you the debate about the class of 2010's gloomy job prospects. Over at The New York Times, however, one piece has jump-started an even less cheerful discussion. The topic: college graduates hopelessly mired in debts way out of proportion to their earning potential.
- Look What Too Many Loans Can Do Ron Lieber tells the story of Cortney Munna, a 26-year-old NYU graduate who is $100,000 in debt after procuring loans from both Sallie Mae and Citibank to finance her degree in religious and women's studies. "What was Citi thinking," asks Lieber, "handing over $40,000 to an undergraduate who had already amassed debt well into the five figures?" But he notes that, in fact, it's often a college's "financial aid office ... [that] has the best picture of what students like Ms. Munna are up against." While there are a number of problems with making this office responsible for delivering the grim message--i.e. to head to a state school instead--he maintains that financial aid workers might be the best people to do it.
- 'Don't Go Into Debt for Harvard College,' counsels brooklynbadboy at Daily Kos, who wishes he'd "gone to Brooklyn College or City College and saved the debt load for my professional studies." Instead, he urges students, "go into debt for Harvard Law School."
- How to Calculate Munna, points out The Washington Independent's Annie Lowrey, "is a photographer's assistant, and has no intention of going into a high-paying career in a field like finance." Thus, argues Lowrey, "where a college diploma makes no difference in her earning potential in her chosen career, remaining in a pricey institution--New York University is the fourth most expensive out of the nation's 1,800 private colleges--might not have been the right choice." She says this particular story is a good at "making the argument others are loath to make," which is that it's sometimes worth it to drop out and go to a cheaper school.
- Professors Saying 'Follow Your Bliss' Rod Dreher, now glad his father made him enroll in a cheaper school, says though professors' go-for-it talks are understandable, "that kind of advice borders on malpractice." Loans can "straightjacket" a student's "future and freedom of movement," he says--"thinking emotionally" can be a real handicap.
- How to Solve the Student Loan Problem Daniel Bennett of Forbes analyzes the pros and cons of making student loans eligible for bankruptcy declarations like other forms of debt. One suggestion he has to get rid of some of the risk problems: "hold colleges accountable ... instead of the taxpayers taking the hit when student loans go sour, colleges should absorb the loss, or at least a portion of it." One positive effect:
This would incentivize colleges to focus on providing educational value and help their students launch a career--knowing that if they fail in their mission, there are real consequences. Maybe then colleges would be more attentive to helping their students succeed.
- The Case for College Accountability Daily Finance's Zac Bissonnette concurs, and argues prior to Lieber's New York Times piece that "Many colleges ... are signing naive students up for levels of loan debt that are destined for failure." When the financial aid offices do this, he argues, "the schools should at the very least share in the financial fallout."
This article is from the archive of our partner The Wire.