Wednesday, June 2, 2010

Another Grad Who Would Like a Refund

The New York Times reported today on a woman named Cortney Munna, who incurred over $100,000 in student loan debt for a 4-year degree from NYU. She is now attending night school in order to defer her loans, but the interest is still accruing. Once her loans come out of deferment, the payments should be about $700 per month. She currently earns $22 per hour working for a photographer.

The article does not specify what type of degree Munna earned, but I am going to take a wild guess that it was of the Liberal Arts variety. As I've said before, most liberal arts degrees are basically useless. The only use mine ever had was that I could put it at the top of my resume when applying for jobs after college. None of the positions for which I applied actually required knowledge of political science or philosophy, but the companies still required a B.A. or B.S.

This is the sad reality of higher education. Students spend thousands of dollars and go into debt in order to earn degrees that will help them achieve middle-class jobs, but the loan payments will end up putting these suckers back to the position they were in prior to taking out the loans. For example, Munna works for $22 per hour. Without her college degree, she might have been able to find office work for $10-$15 per hour. She takes home $2300 per month with her current position, but $700 of that will eventually go toward her loans. So, that leaves her with $1600 per month, which is about $12-$13 per hour prior to withholding, and $10 per hour after withholding. So what did she gain by attending NYU?

How much are your student loan payments and what percentage of your current income does that comprise? Was taking on student loans worth it in the end?

1 comment:

  1. You're right, it was definitely liberal arts, she majored in something like women's studies. Yikes. Still yet, I really wish that the (albeit obvious) pitfalls of taking out so much debt were made clearer to students. For instance, our loan counseling was online. Fortunately, I knew what I was getting into. Some of my friends apparently didn't though and are going to be drowning (or would be if it wasn't for income-based repayment!). I'd like to think it would be a good idea to charge a ton of money for, say, a law degree because SO MANY people are going to law school and there are SO FEW jobs. However, I wonder what kind of attorneys we would end up with then...

    Anyhow, I'm going the standard repayment route. My loan payments should be just over $400/month. Granted, I won't be making a ton of money (work/life balance won out!) and my husband has some loans from undergrad, but it'll be manageable. Wish that was true for everyone.