Student Loan Responsibility

Melissa Korn and Andrea Fuller wrote about student loan burdens in Sunday’s Wall Street Journal, using New York University as a worst-case illustration. Their subheadline made a good summary of their thesis.

By many measures, the elite Manhattan school is the worst or among the worst for leaving families and graduate students drowning in debt….

A female graduate sold her eggs to cover some of her NYU costs even as she borrowed to cover more; she’s still selling her eggs to cover expenses and try to pay on her student loan debt as she remains essentially unemployed five months after graduation. In another example, a single mother of three had a $40,000/year income when her son started school in 2018. The mother still has her own $34,000 in loans from her own bachelor’s degree and she’s borrowing another $140,000 in Parent Plus loans to help her son pursue his degree.

And this:

An NYU master’s in publishing leaves recent graduates with median debt nearly triple that of the school with the next highest loan burden for which the Education Department released data. At NYU, the graduates borrowed a median $116,000 and earned a median $42,000 two years out.

And this:

NYU’s 2015 and 2016 public-health graduates who took out federal loans borrowed a median $106,000 for the degree, the Journal’s analysis of Education Department data found; half earned roughly $61,000 or less two years after graduation.

And this deflection from NYU spokesman John Beckman:

Not everyone seeking an advanced degree is going into a lucrative field, and universities have no control over how our society values particular professions.

NYU is especially bad in this arena, but only by a matter of degree. The problem itself is both widespread and very serious.

The overall situation is one more argument for getting government all the way out of the student loan business, whether making the loans or guaranteeing them. That and the alternatives below are perfectly straightforward to implement, if exceedingly difficult to effect politically. But that just requires us sovereign citizens to put our foot down and fire the politicians who won’t go along and elect those who will.

After getting government out of the way, do these things:

  • make the schools publish the average and median 5-yr-after-graduation salaries for each of its majors
  • make the schools publish the per centages of their graduates finding employment in their major areas of study within one year of graduation
  • make the schools be the ones extending loans to their students or serve as co-borrower on any private financial institution student loans
  • let graduates discharge their loans through bankruptcy—stop disguising the risks from the lenders (and borrowers), and stop inuring the lenders from those risks.

One more Critical Item; although this is a change in mindset for all of us, not only school managers and politicians. Recognize for whom college is most appropriate. There’s a crying need for a whole lot of tradesmen, and good livings to be made there—and nothing an architect draws up or an engineer designs gets built without tradesmen. Doctors and lawyers have no place to ply their trades, other than in their homes, without tradesmen. Those homes don’t get built without tradesmen. And neither do the roads/bridges, power grids, communications grids, and on and on that connect those homes to those offices and office buildings—or mines and farms to anywhere—without those tradesmen.

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