Friday, May 28, 2010

Another NYU Graduate with Six-Figure Debt. Quelle Surprise!

Or not. New York is an expensive city, folks. If you go to an elite school there (NYU or Columbia) expect to fork over your life savings unless you get a lot of financial aid and scholarships.

The New York Times has found another student loan slave in the Big Apple, not really a difficult task. I have a friend who is getting her second Master's degree at NYU. I don't understand why anyone needs two Master's degrees, but this is what happens when young people can't find a job and buy into the higher education myth that an elite degree is sure to bring in the big bucks after graduation, which we have learned is no longer the case.
Like many middle-class families, Cortney Munna and her mother began the college selection process with a grim determination. They would do whatever they could to get Cortney into the best possible college, and they maintained a blind faith that the investment would be worth it.

Today, however, Ms. Munna, a 26-year-old graduate of New York University, has nearly $100,000 in student loan debt from her four years in college, and affording the full monthly payments would be a struggle. For much of the time since her 2005 graduation, she’s been enrolled in night school, which allows her to defer loan payments.
I don't think most graduates in a similar position as Ms. Munna are idiots or irresponsible. They were misinformed like the rest of us. Students and their parents invest $100k for a degree from an elite institution because they believe it will land them a job that pays enough to pay off those loans in a reasonable amount of time. No one plans to default or flee the country when they sign up for a student loan. You get a degree from an Ivy League or top tier college and you expect to get a decent paying white collar job. I can't speak for third tier graduates, but back in the good ol' days, the majority of graduates from my college and law school found jobs that paid more than factory line workers. That is why people, and especially working class people with academically gifted children, believe higher education is a good investment - perhaps the only investment - that will allow their children to enter a comfortable upper middle class lifestyle.

I don't understand why people are beating up on Ms. Munna in the comments for majoring in Religious and Women's Studies. And? I know people who are unemployed who majored in Humanities and Science. T14 law students are graduating without any job offers. Does your college major really matter that much anymore unless you are in Pre-Med or Engineering? Any degree in the Humanities is going to end you up in the unemployment line these days, whether it be Women's Studies or Political Science. More people should start questioning the financial aid offices and banks who take advantage of clueless teenagers by allowing them to take out a $40k loan in the first place.

Which is why I am glad the author questions how Munna was allowed to take out a $40k Citibank loan when she was only 17-years-old. In the process, the article reveals a bit of the the higher education scam at work, and why students are able to take on massive debt without any warning or advice from the financial aid office (emphasis mine):

The financial aid office often has the best picture of what students like Ms. Munna are up against, because they see their families’ financial situation splayed out on the federal financial aid form. So why didn’t N.Y.U. tell Ms. Munna that she simply did not belong there once she’d passed, say, $60,000 in total debt?

“Had somebody called me and said, ‘Do you have a clue where this is all headed?’, it would have been a slap in the face, but a slap in the face that I needed,” said Cathryn Munna. “When financial aid told her that they could get her $2,000 more in loans, they should have been saying ‘You are in deep doo-doo, little girl.’ ”

That’s not a role that the university wants to take on, though. “I think that would be completely inappropriate,” said Randall Deike, the vice president of enrollment management for N.Y.U., who oversees admissions and financial aid. “Some families will do whatever it takes for their son or daughter to be not just at N.Y.U., but any first-choice college. I’m not sure that’s always the best decision, but it’s one that they really have to make themselves.”

The complications here go well beyond the propriety of suggesting that a student enroll elsewhere. Colleges don’t always know how much debt its students are taking on, which makes it hard to offer good counsel. (N.Y.U. does appear to have known about all of Ms. Munna’s loans, though.)

Then there’s a branding problem. Urging students to attend a cheaper college or leave altogether suggests a lack of confidence about the earning potential of alumni. Nobody wants to admit that. And once a university starts encouraging middle-class students to go elsewhere, it must fill its classes with more children of the wealthy and a much smaller number of low-income students to whom it can afford to offer enormous scholarships. That’s hardly an ideal outcome either.

Finally, universities exist to enroll students, not turn them away. “Aid administrators want to keep their jobs,” said Joan H. Crissman, interim president and chief executive of the National Association of Student Financial Aid Administrators. “If the administration finds out that you’re encouraging students to go to a cheaper school just because you don’t think they can handle the debt load, I don’t think that’s going to mesh very well.”

That doesn’t change the fact, however, that the financial aid office is still in the best position to see trouble coming and do something to stop it. University officials should take on this obligation, even if they aren’t willing to advise students to attend another college.

Is Munna to blame or should we start criticizing the universities and banks for lending young people money knowing that students usually start college with little idea of how to manage their finances or any sense of their income prospects in 4 years. What do you think?


  1. NYU undergrad isn't a top school. The law school is top, but the undergrad has been overpriced for a long time.

    It is ironic that medicine is actually the only field where practitioners try to paint a grim picture when the reality is considerably rosier. Every other field does the very opposite.

    You'll hear medical doctors constantly whine and complain that the hours are too long, the pay is low, and they risk and lose a lot in malpractice insurance. Yet, they still have the highest average salary of any profession and they turn away most applicants. Medical care is so expensive partly because there is such a shortage of physicians and prescriptions are so tightly regulated.

    In a truly free market, if you know you have asthma you can pick up an inhaler and treat yourself. In the US, you can't do that, because the government is "worried about your safety." If you can't afford a doctor, well that's too bad, at least you will die in safety.

  2. This girl is absolutely ridiculous.

    The article says that even if she had to start repaying her loans, she's still have around 900 bucks after loans, taxes, and rent. Frankly, I'm sick of these spoiled brats crying poverty when their lives are much better than your average person.

    "She recently received a raise and now makes $22 an hour working for a photographer. It’s the highest salary she’s earned since graduating with an interdisciplinary degree in religious and women’s studies. 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."

  3. Her life is definitely better than someone who is unemployed, but $2300 monthly is peanuts in NYC. I think she's living in NYC, right? That is not enough to live comfortably, put anything into savings, and pay off a $100k loan.

  4. $22 an hour for 40 hours a week is actually about 2.8k after taxes. Entirely livable. Not great, but for someone starting out, not bad.

    She picked a degree with no actual prospects outside of Academia. That's not a good call.

    Beyond that, she chose to go to an over-priced school with no grants or scholarships. She's continuing her education (which is sort of insane, since its deeper in the hole).

    I'd like to see the resume, because I could probably tell you why she is at $22 an hour, and it is probably not even the poor choice of major.

    She likely lacks meaningful summer internships that could land her an actual job.

    I also don't know why she is 26 and only has the undergrad. She has been in night school doing... something for 5 years now with nothing really to show for it. Had she graduated undergrad in 2005 (which was WELL BEFORE THE ECONOMIC MELTDOWN, MIND YOU) picked a career path, and stuck with it, she would be fine.

    I have lived off of $1600 a month while saving 300 a month in San Francisco during my poorer days. 2.8k in New York is a cakewalk.

    Pick a real career path. Work on the real career path. Get stuff together. Make a plan. Execute the plan.

  5. It's silly to insult her for her choice of major. We as the young underemployed/financially strained need to have some goddamn solidarity.

    For what it's worth, I know tons of people from NYU Stern who majored in supposedly lucrative fields who are not doing so well. I know guys with mechanical engineering degrees who are having a tough time even finding a job.

    On the other hand, I know people with shitty grades and shitty majors (that make Women's Studies look rigorous) from mediocre schools who are working at firms like Goldman and Lazard. How? I don't know; but I did notice that they had all attended private high schools that charge an arm and a leg to attend (as much as private law school tuition).

    Sick of hearing these Boomers and assholes trashing helpless and exploited elements of our generation. These kids bust their ass, work hard, study hard. They should be rewarded for their effort. Instead, society calls them "entitled" and insults them. This reserve army of un-/underderemployed intellectual labor, however, only benefits a small portion of the population.

    1. "It's silly to insult her for her choice of major."

      "These kids bust their ass, work hard, study hard. They should be rewarded for their effort."

      Here's a thought. If I go out and dig a hole. A BIG hole, in my yard. Will you pay me a 60,000 salary. I will go out each day and toil for eight hours digging this hole, with minimal breaks, and I'll make substantial progress. This hole won't have any purpose or meaning, it will just be a hole. A big hole, as I will put my all into my eight daily hours of holedigging labor, but just a hole nonetheless.

      Will you may me a $60,000 salary for my efforts?? After all, I AM working hard. Likely, you would refuse my offer. Because while I WOULD be working hard, I will not be doing ANYTHING of use or contributing anything of actual value.

      If you are spending your time getting an education that will not benefit yourself nor society, why should I care if it puts you into debt?? Fuck working "hard". We need to reward working SMART.

      Would you praise a man digging a trench with a spoon despite the fact that there are SMARTER, easier ways to dig trenches?? Probably not!! Reward people who are using their brains and creating value!! Don't praise the spoon digger for doing hard work to achieve little, praise the guy with the shovel who is able to achieve more, faster, because he's doing it smart.

      So yeah. Don't get a useless degree.

      But it's not fair to blame the people studying. They've been lied too. Told that what they are doing is the thing they need to do to be successful. This is a lie, and a good portion of them would be better served at a trade school learning to weld. But Big Academia has created a cult of knowledge around the idea that you NEEEEEEED pieces of paper to validate your worth and get you money, and has also spread around the idea that it doesn't matter what exactly the paper says.

      Don't blame the kids, but ALSO don't pretend like there are no stupid choices to be made in major decisions merely because people are "working hard" at their stupid decision.

  6. Well said, anon @ 9:56pm. I am tired of the blame game. Most of the people I know who got a great job, even before 2008, got it through connections. Stop blaming someone for not getting a job because of their major. The colleges and their lack of ethics is the problem here.

  7. The problem is the government keeps offering more loans and schools keep increasing their tuitions as a result. It's a never ending spiral that won't end until the government stops funding this madness. This is what happened with the mortgage market - government offers $500K "no money down" mortgages to anyone with a pulse. So now (rather then) you had to bid against with the fry guy working at McDs for the same house causing a false escalation in house prices due to increased competition.

    My only advice to the women in this story is she should have majored in basket weaving. At least she would have had a marketable skill... Isn't New Yawk awesome!!!!!

  8. Don't go to a private school and then complain when you can't afford it! GO TO A PUBLIC SCHOOL! I hate these people and their total lack of prudence and responsibility. STOP MAKING DUMB DECISIONS!! i.e. private school that you can't afford and a major that is virtually useless in an increasingly tech heavy world. Idiots.

  9. OKay, as for the blame game, while the choice of major may not be entirely to blame, let's give it at least partial credit. It obviously matters what you major in. There's always anecdotal evidence of engineering majors having a hard time and whatnot, but when you look at engineering majors as a whole, they have a better time finding a job.

    As a note on where she lives, not entirely sure if this is better than NYC, but she apparently lives in California. (why?) Having $900 after taxes, rent, and loans should afford her a decent life. Though, I would venture to guess that the $750 for rent is a typo of some sort. I'm having a hard time deciding whether is should be 950 or 1750. (If 1750, then yea, she can't afford to pay her loans. but at the same time, why the hell are you in Cali?)

  10. @ 9:56: Who the hell goes to NYU for engineering? That might be the first problem.

  11. Our society is obsessed with blame to an unhealthy degree. Look, everyone thought that higher education was the path to a better life: ordinary people believed it, the government believed it, the universities believed it. And we all believed because, for a long time, it looked to be actually true.

    I think the problem is that, medicine and engineering aside, we switched cause and effect. We saw highly educated people doing well, and attributed it to their education. The real reason they attended higher education in the first place is that they were already doing well; they were the scions of the elite.

  12. I can't say I really feel bad for this girl. I, too, got an MA from NYU in, get ready, Cinema Studies. At least NYU is known for its film school, so I had some hope of landing an academic gig with the NYU impramatur on the CV, but it sure as frak didn't help my debt load.

    What I wish more people knew about MA programs is that they are almost all just money spinners for the school. Unlike Ph.D.s, which you typically get funding for because you are teaching classes to undergrads, MAs almost always pay full sticker price.

    I think most of us thought we'd manage to get a spot in the Ph.D. program so we could become full-fledged professors, but the truth of the matter is that those graduate programs are so political. If your chosen dissertation topic does not fit a niche in the department, forget it.

  13. I wonder how many resumes strip clubs are getting? Hot damn!

  14. "Minnesota Supreme Court Justice Paul H. Anderson said something's gone wrong since he graduated in 1968 with no debt and a 1965 Mustang. "The generation before me came to the conclusion I was worth the investment," he said. "Maybe my generation is a little too selfish."

    Well said sir!

  15. Thanks, anon @ 4:17pm. I'll be sure to post that story.

  16. The following comment was made with respect to Engineering grads:

    "...Does your college major really matter that much anymore unless you are in Pre-Med or Engineering?"

    Of the 20 Engineering undergrads I know only 2 are working in the Engineering field:
    1 in Chemical Engineering
    1 in Petroleum Engineering
    the rest
    10 are working in Sales(Engineering, Financial, Fire, Insurance, and general)
    1 in working as a tow truck operator
    1 owns his own moving company and is driving the truck
    1 is working as a truck driver
    5 are working as HVAC/construction workers
    I should mention there are now online Engineering programs. You take the first two years at and Community College (Chems w/ labs, Maths, Statics, Dynamics, Physics w/labs, and electives.) The final two years are online. You must spend on summer in residence for labs.

  17. Let's read the real story, shall we (having been there myself years ago)? Our heroine came from a small town in upstate NY. She had, absolutely *HAD* to live in Greenwich Village for four years. Womyn's Studies is so popular there. NYU was her cover for the escape to NYC and I am sure she was the toast of Washington Square. Now the bill is due. I am sorry her mom was not tough enough to rein her in, but I am sure a free thinking, Greenwich Village residing, Womyn's Studies/Religion Major knew it all and was not going to have mom's reality rain on her parade no matter what.

  18. I'm surprised by the reaction here. Yes, majoring in Pre-Med or Computer Science would be smarter than majoring in English, PoliSci, Women's Studies, Religion, History, insert Humanities or Social Science subject here. Yes, living in NYC is expensive. But why isn't anyone questioning the outrageous tuition rates and the lack of concern from NYU's financial aid office? She and many thousands of other college grads with six-figure debt wouldn't be in this position if Citibank or their colleges made it mandatory for parents to sign off on such a huge loan. These institutions are predatory lenders taking advantage of naive teenagers. I'm not saying that this graduate shouldn't take some responsibility for her situation, but how much blame are we going to place on young people who believe the lies told by these college that most of their graduates end up with good paying jobs? Isn't that what most law school students believe too? If you can't sympathize with this girl, why should you expect anyone else to sympathize with your student loan story either?

  19. Housing bubble crashes? Blame the poor folks who got scammed by the banks and are losing their homes.

    Youth unemployment? Blame them for not having gone to college.

    College grad underemployment and student indebtedness crisis? Blame them for
    a) pursuing a major that you don't like,
    b) going to a more expensive or higher-ranked school than the one you attended,
    c) having the gall to believe they can achieve a higher material situation than their parents just by working hard and doing everything right (why do they feel so 'entitled' to be compensated for their efforts?).

    Every time the mainstream media airs these very real problems, people jump to play the blame game.

  20. To me she sounds like an irresponsible dingbat of a person who isn't grounded in the real world. I have a feeling that she elected not to pay attention to the ridiculous amount that she was racking up until the bill collector came calling.

    example 1: Women's and Religious studies - What career were you going to apply this to? Did you think about an actual career, or was it just a 'feel good' degree?

    example 2: Why the heck are you in San Francisco? Is this another 'feel good' decision that isn't grounded in the reality? San Francisco is an expensive city to live in when you are POOR!

    I would suggest that she move in with the photographer (ha!) to save money. Or find some other rich sugar daddy that can afford to help her. Maybe she can meet one at some of those high end galas that she is being paid $22 an hour to photograph.

  21. New York is ridiculously expensive. I can barely afford an apartment in the city and for a while I ended up sleeping in my friend's Used Pickup Truck. It was dirty and smelled back, but it's actually not much worse than where I'm currently living in the Lower East Side.

  22. "Which is why I am glad the author questions how Munna was allowed to take out a $40k Citibank loan when she was only 17-years-old."

    Munna was allowed to take $40k in loans because if the loan had been refused, she and about a million other education "activists" would be screaming bloody murder on the Capitol steps demanding Barny Frank or some such lawmaker loosen the credit requirements for young, fresh faced students wanting to better themselves through degrees with monikers that end in "Studies"... and so we go down the rabbit hole.

  23. Good way of posting dear. it's really nice post. Thanks for sharing it dear.
    Financial Aid

  24. Sorry, NYU is not a top school. It's ranked below Boston College, which gets considerably less press.



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