The article says she graduated a few years ago and is taking night classes now to continue deferring on the payments. Well where has common sense went to these days. Wouldn't it make a lot more sense to spend that time at night working an extra job and paying the money toward the payments? I guess that would make too much sense though.
Would be rocket science to wait tables of a night or whatever and put that money toward the loan

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.



Cortney Munna (Noah Berger for The New York Times)

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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.

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Ms. Munna does not want to walk away from her loans in the same way many mortgage holders are. It would be difficult in any event because federal bankruptcy law makes it nearly impossible to discharge student loan debts. But unless she manages to improve her income quickly, she doesn't have a lot of good options for digging out.


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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.

How many people are like her? According to the College Board's Trends in Student Aid study, 10 percent of people who graduated in 2007-8 with student loans had borrowed $40,000 or more. The median debt for bachelor's degree recipients who borrowed while attending private, nonprofit colleges was $22,380.

The Project on Student Debt, a research and advocacy organization in Oakland, Calif., used federal data to estimate that 206,000 people graduated from college (including many from for-profit universities) with more than $40,000 in student loan debt in that same period. That's a ninefold increase over the number of people in 1996, using 2008 dollars.

The Family

No one forces borrowers to take out these loans, and Ms. Munna and her mother, Cathryn, have spent the years since her graduation trying to understand where they went wrong. Ms. Munna's father died when she was 13, after a series of illnesses.

She started college at age 17 and borrowed as much money as she could under the federal loan program. To make up the difference between her grants and work study money and the total cost of attending, her mother co-signed two private loans with Sallie Mae totaling about $20,000.

When they applied for a third loan, however, Sallie Mae rejected the application, citing Cathryn's credit history. She had returned to college herself to finish her bachelor's degree and was also borrowing money. N.Y.U. suggested a federal Plus loan for parents, but that would have required immediate payments, something the mother couldn't afford. So before Cortney's junior year, N.Y.U. recommended that she apply for a private student loan on her own with Citibank.

Over the course of the next two years, starting when she was still a teenager, she borrowed about $40,000 from Citibank without thinking much about how she would pay it back. How could her mother have let her run up that debt, and why didn't she try to make her daughter transfer to, say, the best school in the much cheaper state university system in New York? "All I could see was college, and a good college and how proud I was of her," 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."

But Cortney resists the idea that this is a tale of bad parenting. "To me, it would be an uncharitable reading," she said. "My mother has tried her best, and I don't blame her for anything in this."

The Lender

Sallie Mae gets a pass here, in my view. A responsible grownup co-signed for its loans to the Munnas, and the company eventually cut them off.

But what was Citi thinking, handing over $40,000 to an undergraduate who had already amassed debt well into the five figures? This was, in effect, a "no doc" or at least a "low doc" subprime mortgage loan.

A Citi spokesman declined to comment, even though Ms. Munna was willing to sign a waiver giving Citi permission to talk about her loans. Perhaps the bank worried that once it approved one loan, cutting her off would have led her to drop out or transfer and have trouble paying back the loan.

Today, someone like Ms. Munna might not qualify for the $40,000 she borrowed. But as the economy rebounds, there is little doubt that plenty of lenders will step forward to roll the dice on desperate students, especially because the students generally can't get rid of the debt in bankruptcy court.

The University

The financial aid office often has the best picture of what students like Ms. Munna are up abbgainst, 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.

Instead, they might deputize a gang of M.B.A. candidates or alumni in the financial services industry to offer free financial planning to admitted students and their families. Mr. Deike also noted that the bigger problem here is one of financial literacy. Fine. He and N.Y.U. are in a great position to solve for that by making every financial aid recipient take a financial planning class. The students could even use their families as the case study.

The Options

The balance on Cortney Munna's loans is about $97,000, including all of her federal loans and her private debt from Sallie Mae and Citibank. What are her options for digging out?

Her mother can't help without selling her bed and breakfast, and then she'd have no home. She could take her daughter in, but there aren't good ways for her to earn a living in Alexandria Bay, in upstate New York.

Cortney could move someplace cheaper than her current home city of San Francisco, but she worries about her job prospects, even with her N.Y.U. diploma.

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.

She may finally be earning enough to barely scrape by while still making the payments for the first time since she graduated, at least until interest rates rise and the payments on her loans with variable rates spiral up. And while her job requires her to work nights and weekends sometimes, she probably should find a flexible second job to try to bring in a few extra hundred dollars a month.

Ms. Munna understands this tough love, buck up, buckle-down advice. But she also badly wants to call a do-over on the last decade. "I don't want to spend the rest of my life slaving away to pay for an education I got for four years and would happily give back," she said. "It feels wrong to me

"religion and woman's studies" Maybe while the girl and her mother was figuring out how to scam the U.S. taxpayers, they should have spent a little time figuring out a degree that would pay more than minimum wage.

One of the many realities that we modern Americans refuse to face - Not every child is college material. The school systems reinforce to all children that you can sit behind a computer screen, be a philosopher, be a writer, be a community organizer without any mention of actually having to figure out a way to put food on the table.

Our business was on the southeast side of San Antonio; industrial area and a lot of the residential homes were below the poverty level. I called the closest high school to inquire about participating in the vocational program for any kids that were interested in welding or hydraulics. They told me that they had done away with all of those types of programs and were training the kids on computers.

Back in the thirties the schools had a pretty decent system. If you couldn't afford college, the high schools had extended learning programs after graduation. My father went back for the business program. (Of course, back then they didn't teach that profit was an evil concept.) He went on to lead a large business and was very successful.

We have to quit teaching "Fulfill your dreams. Someone else will pay for it," and start teaching "Work sometimes is a pain in the a$$, but it puts food on the table and gives you a feeling of independance and confidence."

What we need to do is STOP subsidizing sorry asses that wouldn't work if it was sitting in front of them.

quote:

Originally posted by wasbeeman:
"religion and woman's studies" Maybe while the girl and her mother was figuring out how to scam the U.S. taxpayers, they should have spent a little time figuring out a degree that would pay more than minimum wage.

You are EXACTLY correct. I recently read an article warning people to make sure that 200k Masters degree will pay off as well.

In the immortal words of Judge Smails: "The world needs ditch diggers too"......and there's nothing wrong with that.

I saw a piece on 20/20 or 60 minutes about 10 years ago it was about a Doctor that owed $200,000 in tuition they wanted to know how he could pay cash for his Over $200,000 house but defaut on he Tuition Loan. I say they should have Taken his house .

There are plenty of medical doctors that graduate with $300K+ in loans. They usually have had, in the past, a good chance of paying those back, although times are "-changin'" like BO promised.
Folks who borrowed big sums to get jobs that in good times only pay 25% of what an MD expects to make are gonna have an impossible time paying back those loans--but maybe that was part of the big plan.?

Everyone involved shares the blame. The idiots that borrow money thinking pay-back day will never come (and they may be right). The financial credit-issuing institutions that hand sacks of money to anyone, figuring they will get a portion back and be able to raise fees to collect the rest from people unrelated to the scam at all.

My biggest heart-burn is with the universities that simply want to function as a factory; collecting money, providing very little to prepare a student for supporting himself, hand out the student loans to people that have no hope or desire to contribute anything to society, who will end up on other "freebie" queues; welfare, disability, etc.

Years ago my brother-in-law was working for a university in the financial aid department. He said they consistently handed out sacks of money to "students" who had been at the university for 8+ years, changing majors to avoid actually graduating. They also handed out sacks of money to students whose parents were "destitute", at least according to the statements on the finanacial aide forms. The town was small enough that some of the people in financial aide knew the parents were in fact quite wealthy. No matter, the head of the department said believe the form, give the money.

The other thing I see is that the educational bar has been lowered so anyone can get a college degree. Today a high school diploma in the U.S. is the equivalent of a GED 20 years ago. A Bachelor's degree from a university, the equivalent of a high school diploma. Anyone can now get into graduate school to work on their Masters, just keep lowering your sights, and get the right university and have written letters of recommendation.

It's not that companies really require new employees to "have" masters degrees, they just know they have to ask for that level of education, in order to get something much less.

I graduated from college 40 years ago, and one thing I've noticed is that I was able to use about 2% of what I learned in college. The rest was worthless. Secondly, in the intervening 40 years the university has never lost track of me. They've always been able to get appeals for money to me in the mail asking me to donate to them. Universities are probably the worst value for money a person can buy, except for the fact that a degree does open doors. Beyond that they provide nothing of value.

The relationship between universities and credit issuing facilities is nothing short of criminal. Universities are paid by credit issuers for exclusive rights on campus. The intent is to saddle each student with as much debt as possible, at the highest interest rates legal.

Another way of looking at it is that the credit issuing facilities have the drugs, and the university runs the crack-house. Each year they get a fresh batch of 17 and 18-year-olds to introduce to their product, and the beat goes on.

People with college educations are a dime a dozen and most have zero intellect that is useable to a business. That spells dim prospects for recent and near future grads....the real future is getting into a decent trade school and learning a needed trade.........this country is embarking on another industrial revolution. I am in the trades and have seen this spark slowly gaining into a small flame getting larger each year. I am noticing more and more manufacturing companies opening up or growing their staff of tradesmen/operators recently. Why you ask? Simple.......America is FINALLY waking up and realizing that they cannot continue to send work overseas and still hold on to what they remember is America. Our trade schools are getting better at educating and have much improved shop equipment( and more of it ). I have been working with a program called SKILLS USA(Lehigh Valley Region) created to develop just this concept and they have some wonderful educators developing many wonderful students. Please, if you have such a chapter in your area, get involved and support them. Get your companies involved too as they need sponsors to keep it rolling into something great. Just as mention by someone else.......not every child wants to stroke a keyboard for their livlihood and not every one is college material. Do your part to get America back to the manufacturing giant it once was....the very thing that made America great.

In the oil & gas industry, the industry I'm in, the people that are best able to get back on their feet after a "bust" cycle are the guys that have a "skill", not an "education". Like doctors, dentists, lawyers, accountants, they're not bound to an industry. So when the shit hits the fan, the Rig Managers, OIMs, Toolpushers, Drillers, etc. have no place to go. The electricians, mechanics, and welders, just shift industries and move on.

People need a "skill".

Cry me a river.....do you think this computer and the programs that allow us dumbasses to use it so easily were invented by a mechanic, electrician, or a welder?

It's not skill, it's brains and drive. Americans tend to have it more than other countries. Nothing wrong with anyone learning a skill, but, in general, if they don't go beyond that skill, they are just gonna be worker ants not very far up the ant hill.

Gato........not everyone wants to be an inventor, an executive working 90 hrs a week or a salesman trying to live on commissions. Lots of people just want to earn an honest living doing what they like.......and lots of people like working with their hands AND heads to keep equipment running or build something they can stand back, look at and have a sense of accomplishment. I can tell you this......tons of companies despise their maintenance departments as "just a cost" or "adds no value to the product" but hear this.......not a damned one of them dare do away with said department. Hear this.......NOTHING runs very long WITHOUT that maintenance tech. Hear this.........nobody dare do without heat in the winter or A/C in the summer(most locations) so those technicians are not "just worker ants".....they are the very fabric of this great country. We may not invent it.........but we keep it working. Yes, smart people have ideas but skills are what built America.

When the most brilliant minds in the world are only interested in the almighty dollar and head to Wall St. to produce NOTHING, that's a sign we're in trouble as a nation IMHO......and it's been happening for decades.

I'd be a farmer/rancher anyday before I'd go work at moving money around and cheating investors out of money to line my pockets.

If I have one complaint, it's that everyone wants to be paid like those of us who went to school and trained for 12 years AFTER college.

Check out the payroll of the Oakland, CA PD for example......they all make well over $250k, mostly in OT.......and in a bankrupt state......why?

http://www.safehaven.com/artic...kland-the-model-city

I think it's time for a bailout. America needs young people with degrees in areas like hers.
Give those people a chance...


Rich
DRSS
Irony was always my strong suit

Idaho Sharpshooter, what drug are you on? She has an "interdisciplinary degree in religious and women's studies". That sounds like a REAL wage earner to me all right.....not!

I read the first post again and; mother excuses daughter; daughter excuses mother. They blame everyone else for being stupid. They weren't born stupid, and maybe they weren't raised stupid, but at some point they bought into the idea that as Americans they can take on as much debt as they want and at some point turn to the media to appear to be poor helpless victims of "the system".

She doesn't need a bail-out she needs to take responsibility for her bad choices, and deal with them not whine to everyone else.

Let's let the Republicans bail her out. If the Democrats do it there will be just one more thing for the Republicans to blame on a black President.

Where in the U.S. Constitution does it say everyone has a right to a bail-out? I support a bail-out for the honest people who work hard, pay their debt and taxes, and aren't standing in some welfare line with their hand-out year after year.

Don't get me started.

Kensco.....it's called sarcasm. I'm sure a bailout is the last thing he wants to give her.

Other than that, I agree with your stance.

No no, not a bailout...that has such a bad connotation these days. Miss Cortney Munna is postponing paying back her government-backed loans hoping for a PARDON from O'bama. You know, like how all those Vietnam draft dodgers got PARDONED by Jimmy Carter on his second day on the job.

quote:

"...that what you did, whether it's right or wrong, you're forgiven for it."

She's just waiting her turn.

The U.S. has changed since I was in college.

When I was fresh out of the Army, I got a full-time job. I arranged permanent assignment to shifts other than the day shift, and went to Junior college full-time during the day.

That didn't leave a lot of time for sleep and social life, but it worked out. By working my butt off in junior college, I got a 4.0 GPA, served as student-body V-P, and a few other things, while working full time at a real job too. That combo won me a full boat (tuition, books, room & board) scholarship to Stanford U. After Stanford my wife (whom I met and married there) and I moved to Oregon, where we subsistance-farmed to raise our food, and I worked part-time as a fire-fighting foreman for the Western Lane Forest Protective Association, and full time (graveyard shift)slicing beets in a cannery. My wife took care of our (by then) two kids, and we both also attended University of Oregon graduate school.

More universities followed, and more degrees, but we never quit working. Sometimes we would work a year to get the money to go back to school for a few months.

My wife became a journeyman printer, and helped convert an Oklahoma newspaper from hot-type to cold-type when computers were first coming into use...her M.A. was in Computer Science. I did my work for U.S. government intelligence agencies. That paid for my enrollment in a Ph.D. program at University of Oklahoma.

All-in-all, it cost us 12 years of full-time work and study to get our final degrees. We didn't borrow money for school, and we raised two kids at the same time. My daughter got her graduate degrees later in Ecological biology, and my son became a CPA.

Both of them paid their own way through college too, my son turning down a full-boat football scholarship to USC in the process.(He said "Dad, I'm not big enough to play pro football...I need an education", so he worked his way through University of New Mexico with a major in accounting).

What we are seing these days, IMHO, is a rip off of everone in very many ways. State-funded universities spend their money on big time semi-pro athletic programs and new stadia. They pay professors in imaginary degree fields (who haven't 10 minutes of real work experience producing ANYTHING) outrageous sums of money and give them lifetime tenure. Financial institutions make life-time slaves of students by making sure they will pay interest forever through "everyone qualifies" loan programs.

Degrees are given in almost everything intangible that one can think of...which contributes to an economy where fewer and fewer graduates have jobs making tangible products.

I mean, what the hell does a young black student do with a degree in "Black History"? An engineering degree for instance would give him both dignity and an income, so he could afford to have black history as an avocation.... The market for "Black History" instructors or Black History knowledge is so small as to likely earn him nothing after graduation other than an evening job at McD's. And that's just one example. Do you not think it would be far better for both blacks and whites (and everyone else) if all students learned things of some genuine use before going off into just the "feel-good" classes?

Sure, I have over-stated how bad the system is these days in some ways. But in other ways it is even worse than I say.

There is a lot of truth in saying that every single action in life has its consequences. Good or bad, that is a fact. One needs to weigh very act if he hopes to at least break even.

End of education funding rant.

quote:

Originally posted by Gatogordo:
Cry me a river.....do you think this computer and the programs that allow us dumbasses to use it so easily were invented by a mechanic, electrician, or a welder?

It's not skill, it's brains and drive. Americans tend to have it more than other countries. Nothing wrong with anyone learning a skill, but, in general, if they don't go beyond that skill, they are just gonna be worker ants not very far up the ant hill.

Gato I agree we need educated people. Education and common sense do collide a bit. With out the mechanics, welders and manufacturer's those glorious ideas would never leave the paper and pen that was manufactured for them as they sit in their nice warm schools and homes that was built for them by tradesmen. Dressed in clothes that where made by crafts people. Hell we set back one night at school watching a now college science professor try to change a flat on his car. He could'nt figure out the jack or lug wrench with the instructions. We ended changing the tire before he hurt himself. So it goes hand in hand the these rocket scientists would still be living in caves and eating roots if they did not have the trades to make the idea into reality. So stop looking down on the common man. I have a local college professor living next door that I am afraid that he wont make it to retirement with the stunts he makes in home ownership. The trades people can shut down a country and the white collar would be screwed! The scientists and engineers think about an idea but the trades make it happen!

I would disagree with Gato's comment, "It's not skill, it's brains and drive. Americans tend to have it more than other countries."

Take a trip to your local U. S. high school graduation. The top ten graduates probably consist of maybe two "Americans", six "Asians", and two "Indians".

What America still attracts are the best and brightest from around the world.

I guess we need to re-work the definition of "American".

Kensco,

I see you have failed to comprehend and appreciate my scintillating wit and sardonic humor.

I think anyone with a student loan and no job has ninety days to find one or go into the military. Perhaps there the notion of common sense could be explored.

Rich
DRSS