The NYT on the debt people are going into to graduate from college.
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.
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...
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.
In other words, stories this bad are very, very rare.
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.
Of course she didn’t need a college diploma, much less an expensive one, to end up “working for a photographer.”
But a purely financial analysis misses something very important. Imagine you’re an ordinary person when it comes to family wealth, social skills, looks and work ethic. The only thing you have that sets you apart from normals is an unusually high IQ. Unlike physical beauty or income for most people it would take a lot of contact with you to notice this trait. Obviously, it’s not socially acceptable to blurt out in a normal conversation “I have a 130 IQ” or “I scored 2200 on the SAT,” but naturally education will be one of the first things you mention when you talk about yourself and telling someone you went to NYU for all practical purposes communicates the same thing.
For males in particular this can be extremely important in terms of finding a mate. Studies have shown that women tend to be attracted to men smarter than themselves and subconsciously estimating intelligence of people one knows is anything but an exact science. If I meet a guy who comes across as a doofus and later learn that he’s a Nobel Prize winning scientist, the impression I had of him would be altered. Something he said which I found stupid may start to make more sense. This dynamic is why Steve Sailer feels the need to mention James Watson in every other article he writes, even though thousands of commentators on his own blog have said the same things about race more eloquently. Even the assertion that anyone who works with blacks knows how incompetent they are sounds like a good point in your favor when coming from the man who discovered the structure of DNA. To most people, a Harvard diploma might as well be a Nobel Prize.
Even people without the brains for one of the top universities in the country, say those in the 100-110 range, signal something to those they're likely to be associating with by graduating from State U. The Yale alumn shows off his elite genetic stock while in other circles above average is impressive enough. To some lower and even middle class families I'm sure having even one daughter with any bachelor's degree makes parents feel that they're reached a higher class and their sacrifices have been worthwhile.
How much are IQ bragging rights worth? I don’t know, but if people are willing to spend over a hundred thousand dollars on a car to demonstrate wealth, we shouldn’t automatically assume that buying an elite degree for around that much to demonstrate intelligence is completely foolish. In many cases it's completely rational to go an extra $20,000 or so in the hole to attend the best university possible
None of this is to say that Miss Munna isn’t in a bad place financially (or to overlook the government favoring low income nonwhites over middle class Caucasians in aid distribution). But her main problem was the stupid major she chose. If she’d studied a real subject she still would’ve ended up in debt but with the potential to pay if off. Then she wouldn’t be too poor to think about the ego boost that comes from knowing most people she talks to for the rest of her life will feel like her intellectual inferiors.
Update: Some in the comments have pointed out that NYU isn't exactly an elite schools. Turns out it's currently ranked 32nd in the nation. I thought the undergraduate program was comparable to the law school which is number six nationwide. Still, the normal range of SAT and ACT scores are in the mid-nineties percentile wise, so the point remains.