Another Debt Crisis is Brewing, this one in Student Loans

Your Money - Another Debt Crisis Is Brewing, This One in Student Loans - NYTimes.com

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.

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The article goes on to allocate blame among the family, the lenders, and the school, but it buries the most relevant part of this particular girl's story:

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.

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Really? You spent $200k ($100k of it borrowed) to get a degree in "Religious and women's studies" and are complaining about how you can't find a high-paying job? Are you ****ing kidding me? I'm astonished that she's even earning $22/hr.

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As to the larger issue, student loan debt is indeed a huge problem, but it's largely of the student's making. Any change to the current laws will end up having a seriously detrimental impact on the ability of non-wealthy students to get an education.

I have an ungodly amount of student loan debt, and I'm incredibly grateful that citibank was willing to lend me that money. Had they not done so, I would not have been able to attend the schools that I did. The reason why citibank was willing to lend me that money was not because I have otherworldly credit, but because student loan debt is not dischargeable in bankruptcy, which means that they're guaranteed to get their money.

Where you have a problem is when students take out far more than they can ever pay back. I knew people who borrowed $100k+ to major in things like social work or elementary education. If you're essentially guaranteed to take a job earning less than $50k, it is absolutely idiotic to borrow that much money - just attend a state school or a lower-ranked school on a scholarship. That's good advice for almost everyone, but no one (myself included) wants to hear it at the time.

Tuition has been outpacing inflation by an incredible amount, and it's finally coming to a head with the current job market. I just graduated, and of my close group of friends who graduated only I and one other person have a job. Even people with solid degrees are struggling. One girl in particular graduated with a chemistry degree, but still has no prospects. If nothing opens up soon she'll be working some unskilled job with an ungodly amount of debt and a real degree that isn't currently helping her at all. When the student loans start accumulating interest in a few months it will get painful fast.

When a good degree from a good university doesn't guarantee an equally good job, tuition prices can't be sustained. Unless the situation for recent grads changes soon, I see a crash in tuition prices coming in a few years.