Is Your NYU Debt Load Worth It?

on 26 April, 2011

According to Zac Bissonnette, “New York University doesn’t give a crap about young people.” The University of Massachusetts senior and author of Debt Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching Off My Parents backs up that statement with the harsh reality of NYU’s student debt record: at ~$35,000 average debt per student, it’s about $11,000 over the national average. These aren’t statistics you haven’t heard before, and it’s not as if students aren’t concerned about their growing pile of IOU’s. But Bissonnette says we still aren’t thinking seriously enough about the implications of NYU’s student debt problem.

I’d caught wind of Zac Bissonnette after he popped up in my NYU news alerts for writing  articles in the Daily Finance like “Why Bill Clinton Should Reconsider Speaking at NYU’s Commencement” and “NYU Students Protested Their Loan Debt Load the Wrong Way.” In the former he argues that this year’s commencement speaker Bill Clinton should tell the university that he doesn’t condone dropping massive amounts of debt on its students. In the latter, referring to NYU Local’s demonstration with Andrew Jenks, he said our “protest” should be to transfer schools.

Over the top, yes, but he has a point. Take last year’s infamous New York Times piece on how NYU alumnus Cortney Munna was referred to lenders by the university’s financial aid office to take out $100,000 — to study for her degree in religious and women’s studies. For some reason, she is now struggling to pay that off.

Bissonnette blasts that the way NYU leaves the decision to take out giant loans in the hands of slightly clueless prospective students and their families “is a level of sleaze and victim-blaming that we expect from car salesmen and timeshare sellers. If a rent-to-own company sets someone up with unaffordable payments on a big-screen TV, we demand that the FTC and state attorney general take them down — and rightly so.”

To be fair, in 2009 NYU began calling students who might not be able to afford its stratospheric tuition to remind them of the financial commitment. The university received a ton of flack for targeting need-based students — which is exactly what Bissonnette called for, even going as far as saying the university shouldn’t even accept students who run a heavy financial risk attending NYU.

I seems unfair for the university to judge students based on their current circumstances; you never know how a student could turn out in four years. Maybe said in-need student will land a healthy job post-grad and easily pay off their loans. Why should someone be punished/punish themselves for their current financial situation?

“No one is being punished by not borrowing a ton of money for something that lacks any research to suggest that it will provide advantages. Uncertainty about the future is one of the best reasons to avoid student loans,” Bissonnette said. “No one knows what opportunities will come along or what passions we might discover, but we’re seeing countless examples of kids whose life choices are influenced by their student loan debts.”

Though the debt you may acquire at NYU could be outlandish, it still seems that NYU has certain aspects about it that can’t be offered anywhere else. The location, connections and environment surrounding NYU are hard to come by in many other places. It seems the debt could be “paid off” in non-monetary rewards like working your dream job. After all, it can be argued that college is not just a financial transaction. Is it really impossible for some debt to be worth it?

I spoke with Class of ’06 Journalism and Mass Communications graduate Taryn Jedlicka (now Mohrman) who, in her senior year, wrote a piece called “I’m Graduating From a College I Can’t Afford” for the NYU Livewire. She wrote that despite her concerns about graduating with a whopping $90,000 in debt, “If I had to do it all again, I’d still make the same choice.” I asked her, after five years of scheduling monthly student loan payment,s if that was still the case.

“If I had to do it all over again, unfortunately, I would… I like to think that no matter what university I attended I would have ended up where I am because of my personality, passion, and work ethic,” she said in an email, citing the fact that she landed her dream job of working as an editor for a consumer magazine. “But the fact is, attending NYU gave me access to the country’s top publishing companies and magazines … while taking classes from professionals that actually work in the industry. That’s how I landed most of my internships, which led to my first job.”

That said, Bissonnette’s research in Debt Free U states that there is little to no evidence linking a person’s success with the college they attend. Not to mention the fact that college rankings are often inflated and over-valued: “there are many, many colleges that are affordable without these massive debt loads, and there is literally no evidence that students attain any additional benefit from going to NYU versus another college.”

So where does that leave Taryn? She commutes to the city everyday because she can’t afford NYC apartment prices, drives a used car to the train station, and pays $700 every month to pay off her student loan debt.

Let’s do some math. If the average recent college graduate is making $47,673 pear year, after taxes that’s roughly $33,371.10, which comes out to about $2,780.93 per month. Minus $700 a month for loans. That leaves you a little over two grand monthly for rent, groceries, toiletries, prescriptions, clothes and other incidentals. Keep in mind that the least expensive average studio apartment price in Manhattan is in Harlem and goes for over $1,500 a month.

You’ll be living paycheck to paycheck, but it is doable. So what’s so bad about taking on some student debt? There is something to be said for the element of choice in deciding one’s success. It’s true: New York probably has the type of job you want, and your environment and surrounding peers play an important factor in landing those jobs. Your own idea of Future You is worth something. Let’s also take your personal values into account. Maybe saving money isn’t that important to you if you’re doing what you want. It is possible that the weight of the sacrifices won’t outweigh the pleasure of being exactly where you want to be.

In a Fox Business interview, however, Bissonnette challenged that assumption. “Debt always adds risk to your life, and student-loan debt may be the riskiest form of debt that you can have because you can’t discharge it in bankruptcy. If you graduate from college and suddenly realize, ‘Oh my God, I borrowed too much money,’ there’s nothing you can do.”

It’s definitely a scary prospect, but if you’re swallowed in student loan debt, should you go so far as to transfer schools as Bissonnette suggests? That’s also a scary prospect, and NYU grads live not without ambivalence.

“My job and all my positions after college have been completely aligned with my career goals. I am absolutely exactly where I want to be,” said Taryn Jedlicka. “But I wish every month when I schedule my student loan payment that I could have ended up where I am for less.”

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