The New York Times has done another expose on a person who is subject to excessive student loan debt. In this case the debtor is around $100,000 in debt, which is about a third less than my own student loan debt, and probably about fifty percent less than what my debt will be by the time I'm done deferring it.
Meet Courtney Munna. She is 26 years old, holds an interdisciplinary degree in religious and women's studies, and, despite being a graduate of the prestigious NYU, she states that hers is "an education [she] ... would happily give back."
I believe that when I was an undergrad my tuition cost about $14,000 for my entire two years at UC Santa Cruz. I have a girlfriend whose daughter was just accepted to Columbia, an offer she turned down at a whopping cost of $60,000 per year.
The New York Times article attempts to determine who is to blame for this young woman having a nearly worthless degree (in the words of Avenue Q, "What do you do with a BA in English?"), earning $22 an hour, and student loan debt she can't make payments on given her income.
Is it her mother, who only wanted her daughter to have a great education, who is to blame? Is it the school that encouraged her to take out these loans in order to attend? Or is it the lenders, who granted these loans knowing what Munna was likely to earn with such a degree, and thereby knowing the likelihood that she would be unable to make the loan payments?
Well, of the options given I'd hold the lenders the most responsible. The article repeatedly compares the lenders with the big banks that caused the mortgage crisis, and the parallels are clear.
Truthfully, however, I think the problem is bigger than the lenders. I think the problem is embedded in this country that allows schools to charge such high tuition, unregulated, without tuition being directly related to the likely earning capacity related to a given degree. The problem is that student loan debt cannot be discharged in bankruptcy. The problem is that the American dream comes at a price, and no one is being realistic about what that price is or how a generation as financially screwed as ours is going to pay that price.
My favorite part of the article, however, is the advertisement, built right into the text of the article between "just like the mortgage lenders who didn't ask borrowers to verify their incomes" and "Ms. Munna does not want to walk away from her loans in the same way many mortgage holders are," which states "[Click here to find an online degree program]." Because the answer, clearly, is paying for more education that cannot yield salaries worthy of the associated loans, and of course, incurring more debt to finance the endeavor.
Interestingly, my bachelors degree is in "Ethics and Religion" - albeit I focused my studies entirely on "Environmental Ethics and Environmental Economics". I took out loans for these studies which I am still paying back but I am not terribly burdened by the situation. It is what it is.
I mention it because who would believe such a degree to be highly employable? Who would make that loan given the dim prospects of securing a high paying job based on my knowledge of Herman Daley and Aristotle? If banks thought about things like this before giving me the loan, I would not have been able to afford the degree.
So how I am now paying off this debt? I took out even more debt and got an MBA that directly linked to my self-motivated study in Environmental Economics - a so-called "Green MBA". I now have more debt, it's true. More importantly, I have a good job and can afford to pay back my debt.
In summation, it was my responsibility to think these things through. If banks thought about it for me, I probably would not be where I am today.
Not debating your points here, just providing some additional, and perhaps different, perspective on the topic.
Good post.
Thanks,
Jason
The problem is that we equate education with employment and future income. It's a very narrow view of the role of education in society. Sorry, Sivan, but even though you don't like practicing law, I still like it that you studied it when you were interested in it. I like it that you'll be studying more over the next few years and getting additional degrees. And, Jason, I like it that you know about Herman Daley and Aristotle. I want an overeducated populace. I'd put education just after health care when it comes to things I value that I believe should freely abound. Just as I am appalled by the bill for $49K that showed up in my friend's mailbox today for a couplefew-hours out-patient procedure she needed (she has no insurance), so do I hate it that you all carry the debt-load that you do for your educations.
I want people to have seemingly "worthless" degrees, like interdisciplinary religion+women's studies, etc.. We have brains. What a shame to waste them. Those who have the capacity for advanced education have a duty, to society, to become educated. It disgusts me that we put economic barriers to that.
Deborah - I rarely comment here, but I feel compelled to state that I agree wholeheartedly. I absolutely love that people have "worthless" degrees in things they love. I'd spend the rest of my life getting worthless degrees if I could.
You are correct that the point of all of this should be that education should be free or heavily subsidized by the populace and government at large. This country needs to put a priority on education and ensure that there is plenty of money for quality public education from grade school through higher education and beyond. That is the path to a thriving future.
I feel very strongly that college tuition should be regulated. Can you imagine the change in demographic at Harvard if it cost the same as State? I would be weary of permitting degrees to cost different amounts based on their earning power though. I don't think Lawyers and Doctors should have to pay more to get their education. I also don't think they should earn more... but that's a different story. Nice post, Sivan. :)
When I was in law school, mid 90s at a UC, the cost was just under $3K/year as I recall. Now it's, what, about $28K? I understand, on one hand, the argument that tax payers shouldn't float the cost of an education that sets one up for a high-paying career (the stated rationale for letting the cost skyrocket). On the other hand, how can anyone work in the non-profit or government legal sector with $100K student loan debt? It's absurd. I'm okay with the state paying for law school (sorry, just stuck on that example because it's what I know) for people who may not practice law. Ever. While I don't think our society suffers from a lack of lawyers, I wouldn't mind everyone understanding about the rule of law, common law origins, and all the rest. Like I said, a well-educated populace is essential for a truly thriving society, imo.
Maybe it is her own fault! Who is going to pay you now-a-days for being knowledgeable in religion and women's studies??? She knew her degree was worthless when she started accumulating debt for it. This is the country of opportunity because no matter how stupid or fruitless one's goals are, one has the resources to achieve them! With this freedom comes the responsibility of making smart choices. She knew the debt she would have going into the program and she chose to accept that. Time for her to lay in the bed she made for herself. Just because the bank offered thorny sheets doesn't mean she had to accept them.
I wonder, then, if Hecubus would prefer a populace of uneducated people, or a populace of people who are only educated in profitable areas such as math and science? What would the world be like without artists and poets? Or would it be fair if only people whose families are wealthy were able to have educations in what they love rather than in practical fields?
I have to side strongly with Deborah here - I want an educated populace, and a well-rounded one at that. We should be more like many European countries and put a strong emphasis on a well-rounded educated populace, the government subsidizing higher education in order to do make it so.
I also agree with Laura that I don't truly believe that student loan debt should be relative to a person's earning ability. Deborah said this too, as to the law. Education should simply be free or low-cost so that people want to (and can) be educated, and study what they are passionate about. I also think if anyone in this country were to earn more based on their profession it should be teachers rather than lawyers.
It’s creepy how the ad is built into the text of the article, but appropriate what the ad was for. Online degree programs, even from for-profit universities, are cheaper and more cost-effective and should be considered a viable option for earning that “nearly worthless” degree which I don’t think is nearly worthless at all. At my company, we don’t even hire receptionists without a bachelor’s, and I’ve read that the wage disparity between those without and with college degrees is only increasing. As long as we require BAs for jobs that you really don’t need higher ed to be able to do (which is probably caused by our K-12 system being so bad that a high school diploma barely proves anything), people will continue to pay whatever universities charge.
The tuition universities charge is excessive, but much of the reason they charge so much is that they offer so many “perks,” such as events, fitness centers, clubs, teams, and general “campus culture,” that community colleges, online universities, and cheaper schools can’t afford. They do it in order to compete with each other—and because who would pay even enough to cover faculty and staff salaries as well as the huge cost of facilities if all they were promised was an academic education and no cultural learning experiences? I don’t think it’s realistic to expect a university which is already having trouble affording full-time faculty to counsel students NOT to attend, especially since the people who would likely be put in charge of making those suggestions would be the admissions staff, whose job it is to do whatever they can to entice the best students to choose them.
The idea of more closely tying what degree you’re earning (whether you’re studying English, business, or pre-med) with how much it costs is interesting, but what I like better is students and their parents not expecting and demanding so much more from “the college experience” than an academic education. Like “the American dream,” we tend to believe that it is our right to have an outstanding, well-rounded, and extracurricular education and believe that while the price of that is absurd, it’s abnormal not to pay it.
Aneesa, I think your point is extremely well thought out and poignant. But I also think $100,000 for a BA is RIDICULOUS. How is the cost of education rising so fast? They're not starting to offer in-class massages or anything. Something has gone terribly wrong. And on top of the ridiculous fast-rising cost of higher education (which, as you point out, is STILL not enough to keep universities from cutting faculty - WTF?!), the lenders are making out like bandits holding students and families hostage at unregulated ridiculous interest rates. This is not the problem of the students or their families, this is the problem of America, unless we want an uneducated populace or a populace that starts out their adult life in more debt than they can ever pay back. I have an idea where America can get the money it needs to subsidize higher education: stop funding international wars over oil and start putting the money where it counts - at home!
The good news is that lenders will no longer make out like bandits. At least not on new loans. Lending is done directly through the Dept. of Education now (I can't say exclusively, because I don't know, but that's the way it is at my law school and its undergrad college.)
We should have an educated populace, of course, but the free education that we already offer could do a much better job, like by teaching civics, like they used to in high school.
Sivan, love that you are getting this conversation going... It's a scary prospect facing so much debt! When I read the NY Times article about this young woman last week, my first thought was "you and everybody else in our generation..."
I do have a hard time feeling bad for this young woman, only because it seems as though she didn't fully comprehend how much money she was borrowing as she did it... Money borrowed must be payed back somehow. No matter what it's for.
But upon futher consideration and after reading your blog, I've begun to consider how hard it would be for any 18 year old to fully
comprehend what such an amount will mean when they are 25, 30, 35... I'm not sure I totally got it when I started grad school, and I was 26... And even if we could fully comprehend what that mountain of debt would be like to pay back- does that mean we do not pursue higher education just to avoid it?
I think you hit the nail on the head when you describe the cost of education as incredibly prohibitive. It's scary to think of how long I will be paying off my loans and looking back, I'm not sure there is any other way I could have done it without drastically altering my life. However, I take responsibility for that debt because I chose to sign each promissory note ... Was it worth it? I think so... I hope so...
Given that a recent study showed my profession (social work) to be less financially rewarding than a career in music or theatre (two things I abandoned due to the lack of job prospects - ha!)... it's mind boggling to me that the class entering this fall will have a 10% tuition hike to contend with in an even worse job market.
Education should be more affordable. But I have a feeling it's going to take a while before we see any change... and in the meantime, we are all gonna have to just keep on finding creative ways to get by.
I agree with Jason - basic public education up through and including high school could do a lot more to educate the youth of America before they even approach college. Though at the end of the day those educated people are going to want to become more educated, and more competitive in the job market - via BAs and graduate degrees - and it is a tough road to go down when the BA alone can end up costing you $100,000 or more.
Jessie - it is an interesting point that you made about giving up your other passions as career prospects in search of a more lucrative field, only to find that field equally dubious. I, too, chose a "better career prospect" career with the law. While lawyers have not yet been given the job prospects of social workers, musicians, and those in the theater arts, I did lose my job due to this economy, and most of the lawyers I know are struggling where they used to thrive. Couple this with the growing number of law school graduates each year and the fact that older attorneys cannot afford to retire and leave the job market, and you find yourself as I did: in a career you chose for security and income that now lacks both. And so I find myself going back to school to do the less lucrative thing that I wanted to do in the first place, except now I am consciously choosing it for love of it, not caring what my income will one day be. Of course that choice would have been a lot easier if I weren't buried in student loan debt.
Hmm, I have really mixed feelings. On the one hand, I agree that an over-educated and interested populace would be a great thing. On the other hand, I do think it's a LUXURY. And while there is currently such disparity between the educations school children are receiving in poor areas as opposed to wealthy ones (which ultimately means that kids who are born into lower income families and neighborhoods most often don't even have a chance at getting as far as a certificate or AA in something that could possibly end the inheritance of poverty in their families), I don't see how we can be spending tax-money on allowing upper-middle class white kids to play for a few extra years (because let's face it, until we fix elementary education, those are the folks going to college, and especially getting the "worthless" degrees, and especially continuing on to graduate school- and it IS playing, compared to working at Wal Mart because you couldn't even finish a diploma at your crappy high school). Okay, I guess my feelings aren't really all that mixed. Sorry Siv!
Jason and I were reading your post yesterday, and as far as 18-year-olds not fully appreciating what they're getting themselves into, he suggested maybe universities and colleges should require a 1-unit class the first semester, or at least a one-day orientation, or something introducing students to financial planning, with a heavy emphasis on student loans (although some tips on credit cards would probably be handy too).
My last little thought is that too many people go to school not so much because they are interested in learning, but because they are interested in appearing to be interested in learning. I'm not saying there isn't a lot you can get out of a professor that you can't get out of a book; just that if you just want to learn, there IS still a lot you can get out of a book! And I can't help but think that a lot of these "worthless" degrees are more about proving, I don't know, either to one's self or to other people, that the student is a smart, thoughtful, interesting person. Of course some people SHOULD be going to school, and to graduate school, but I do think it would be good if we could all stop attaching SO much importance and prestige to what and where someone studied- I think it warps people's decision-making abilities and causes them to place way too much emphasis on ego when making the decision to invest the time and money into a degree.
I recall being at a meeting with the U.C. Davis Chancellor Larry Vanderhoef. Roughly 85 Vet Med students in surgical gowns addressed The Chancellor over the skyrocketing fee increases.
As they correctly pointed out, unlike their colleagues in medicine and law, there are only so many cats, dogs and birds to treat to pay back their debt.
I was working a voter registration effort outside the hall afterwards for some local U.C. Labor Unions; a fair number of Vet Med students stopped and updated their registration...
I was too punk rock to finish high school, but I followed my friends to a college town, bummed around the university library for free every day for a few years, and walked away with a thorough education in Victorian erotica. There’s no degree program for Victorian erotica, but I know more about it than any other high school dropout. I only wish I’d gone to a good prep school, like Philips Exeter, or Andover. They might’ve hammered the raw ore of my adolescence into an ironclad success machine. I would’ve grown up with children of the elite. I’d have access to the ruling class. I could take down the system from within, instead of just collecting Victorian erotica.
I believe the world needs all sorts of people. Poets and scientists and artists and engineers alike! All are equally important in cultivating a strong and rich society. However, the reality is that not all jobs are valued the same. Our culture spends more money on entertainment than it would take to feed a starving country for a year. If you look at Google's top searches on any given day you will find people more interested in the latest scandal than in any real news. But I'm straying from my point. If it is one's dream to pursue art or women's studies they know going into it how much it will cost and what their likely salary will be. I'm not saying they should give up on it because it is not profitable. I am saying that they should acknowledge the sacrifices of their choice and not stand around looking for someone to blame for it.
Rebekah - I think your comments add other layers to this discussion, and I'm glad you shared them. I agree that offering a course in debt management would be great for people entering college or university. Clearly debt management is an area Americans are not educated in, and look where it's gotten us. In my experience I don't know a lot of people who went to school to appear smart and educated, but I went to school with poets - an area you really have to love to get a freakin' degree in. Again, when I got my degree in it my expenses were nominal. A $100,000 degree in poetry would have clearly been a mistake. And as much as I love what I studied and have used my writing to further my career in a plethora of ways, I would hate to have to look back on it and consider it a mistake because of the cost. Conversely I don't consider my legal education a mistake - I am very proud of it - but because of the $130,000 of student loan debt I DO consider it a mistake. So I guess that just proves my point. School should cost a small enough amount that people can get a degree in either something they're passionate about or in something they think will lead to a lucrative career, and either way they should have to pay for it, but not so much that they would ever consider their education a mistake due to the cost factor alone.
Novak - Sounds like you found quite the alternative education! I would love to see your Victorian erotica collection!!!
Hecubus - I agree that this country has issues with priorities. Why an NBA player would earn millions while schoolteachers don't have health insurance for their dependents is beyond me. I agree that people should acknowledge the sacrifices they have to make for their dream, and again, agree that an education can cost money and the student should be responsible for that. But I don't agree that $100,000 is a reasonable cost for earning your BA. Teaching kids that they have to work for what they want in life is great. Teaching them that no matter how hard they work they can never pay off their education is not a good lesson for anyone involved.