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.
This is not a long-term solution, because the interest on the loans continues to pile up. So in an eerie echo of the mortgage crisis, tens of thousands of people like Ms. Munna are facing a reckoning. 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.
Meanwhile, universities like N.Y.U. enrolled students without asking many questions about whether they could afford a $50,000 annual tuition bill. Then the colleges introduced the students to lenders who underwrote big loans without any idea of what the students might earn someday — just like the mortgage lenders who didn’t ask borrowers to verify their incomes.
Columnist Ron Lieber adds:
It is utterly depressing that there are so many people like her facing decades of payments, limited capacity to buy a home and a debt burden that can repel potential life partners. For starters, it’s a shared failure of parenting and loan underwriting.
But perhaps the biggest share lies with colleges and universities because they have the most knowledge of the financial aid process. And I would argue that they had an obligation to counsel students like Ms. Munna, who got in too far over their heads.
I’ve written before here about how when I was preparing for college in 1984, I had stars in my eyes about Georgetown. My father pointed out that we couldn’t afford it. No problem, I told him, I’ll apply for student loans. He put the smackdown on that idea, saying it was foolish to go heavily into debt for an undergraduate degree. I thought he was a mean old bastard. I ended up at LSU on scholarship. It was one of the greatest things my dad ever did for me: giving me the gift of graduating without the burden of student loan debt. I can’t tell you what an impression that made on me, and how grateful I am for it. And it has made me radically re-evaluate the advice the follow-your-bliss a respected English professor gave me when I was an undergraduate. I didn’t take it — I thought my bliss then was a philosophy degree — because I was fortunate enough to discover a love of and a talent for journalism. Still, while I understand where that professor was coming from, that kind of advice borders on malpractice. Professors, like the college loan officers cited in Lieber’s column, seem to feel their responsibilities end at keeping the system running, no matter what the ultimate cost in indebtedness and poor job prospects to the undergraduates.
When my niece Hannah was here last week, I listened to her dreams for college, and told her the story of how Pawpaw once seemed like a cruel crusher of my college dreams, with his stingy bean-counting — but how I later understood that he had made for me an extremely wise choice, one I was incapable of making because I was thinking emotionally, and receiving enabling advice from people who had the same emotional orientation toward higher education that I did (e.g., there’s no such thing as paying too much for a top-quality education). I don’t know if any of it sank in; I’d be surprised if it did. So it may well fall to her parents to be spited for a few years, then thanked profusely later, once Hannah gets into the dreaded Real World, and grasps how much a big student loan load would straitjacket her future and freedom of movement.
“All I could see was college, and a good college and how proud I was of her,” [Cortney Munna's mom] Cathryn said. “All we needed to do was get this education and get the good job. This is the thing that eats away at me, the naïveté on my part.”