Graduates in Debt

Attending college and graduating with a degree is an expectation that many parents rightfully place on their children and many children respond by trying to meet that expectation. Needless to state though, some colleges are far more expensive than others even for the similar courses and yet the prestige of exclusive universities makes many students choose the universities with greater recognition. Ron Lieber of NYT covers in detail, the case of a student who attended the NYU and how she accumulated a large portfolio of loans that she is now struggling to service in full. Her situation reveals the paradox that in her case, her good education has left her with a massive amount of debt which affects her life in many respects.

Besides revealing the interesting paradox where good education becomes a long-standing financial burden for a graduate, the most fascinating part of the story is about the choices and incentives that students, parents and their advisers faced. A journey from the student's family to school advisers and to the financial institutions offering the loans tries to pin the blame. To my mind, Ron gets back to the critical issue towards the end of the story by revealing the inadequate preparation of students to analyze their financial options accurately. In other words, while students are prepared at very prestigious schools to undertake technical work and accomplish tasks, they often leave with very little financial literacy. So students take up loans in order to pay for their education but without an assessment of how these loans compare to the incomes that they should expect once they graduate. So what NYU should take responsibility for is the failure to let students understand how the loans that are available compare to their expected incomes.