Guilt and Student Loans

The New York Times had an interesting piece on Sunday about student debt. It’s pretty crippling. According to the article, by Ron Lieber:

In an eerie echo of the mortgage crisis, tens of thousands of people… 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.

The NYU graduate profiled, 26-year-old Cortney Munna, makes $22 an hour and is some $97,000 in debt. Her total student loan payments would constitute about $700 a month if she were paying back her loans, which she isn’t.

The whole article is set up, somewhat oddly, as a project for assigning responsibility. Who’s to blame? Is it bad parenting? Is it the student loan companies? Is this NYU’s fault?

Ultimately it doesn’t matter. Munna is the one responsible for paying her loans back. And Lieber can offer only what seems like pretty weak advice: “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.”

Please show me where I can find that fantastic job with totally flexible hours that will allow me to bring in an extra $700 a month, because I kind of want it.

While the average student loan burden is somewhat lower than Munna’s ($22,380), student loans are starting to seem like a structural problem. Isn’t it time for a structural solution? Assigning blame might be an attention-grabbing exercise, but it doesn’t get anyone out of debt.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer