The Education of Millionaires - Michael Ellsberg [123]
Munna found a temporary solution. She continued her education in night school, which allowed her to defer debt payments. Thus, her loan balance kept compounding upward each month, debt rolling on top of debt. At her hourly earnings at that time, there was no way she would ever race against compounding interest to pay down the debt. At twenty-six, at the outset of her adult life, Munna found herself in a massive financial hole, one that could mar her financial prospects for much of her life—and there was no obvious way for her to get out.
I learned about Munna’s story from clicking on a link on the New York Times site, which read “Another Debt Crisis Is Brewing, This One in Student Loans.” The link led to an article by Ron Lieber entitled “Placing the Blame as Students Are Buried in Debt.” The basic premise of the article is the reasonable judgment that, when many people are getting into $100,000 of unsecured debt at the outset of their adult lives, with no easy way to get out relative to their salaries, something has gone terribly wrong. The article sleuths through the story of Munna and essentially asks, “Who’s to blame for this mess?” Her parents? The loan providers? The schools? The students who take out the loans?
In a follow-up to the story, Munna states: “I openly acknowledge my responsibility for my current situation, as well as the naïveté in my estimation of the return on investment of a ‘high quality’ education and a liberal arts degree.”1 This is an honorable acceptance of accountability, and it is fair enough; no one held a gun to Munna’s head, forcing her to take those loans out.
Yet simply painting the story as a picture of an adult making poor choices, and who must live with those choices for the rest of her life, seems to me to miss something important. After all, when Munna was originally taking out the loans as she entered college, she was seventeen, at the very cusp of adulthood, not yet old enough to vote, join the military, or legally buy a pack of cigarettes or a beer, or to be tried as an adult in court. Culturally and legally, we acknowledge that people under eighteen should enjoy some amount of protection from the long-term consequences of their decisions.
The civilized world got rid of debtors’ prisons a long time ago. The idea is that people make mistakes, and they should be given a second chance in life. Yet we as a society have a strange blind spot around this concept; we (meaning adult society at large, including parents, teachers, politicians, and media pundits) more or less corral our adolescents into taking on massive amounts of unsecured debt to pursue a college education. In the article, Cortney’s mother, Cathryn Munna, says, “All I could see was college, and a good college and how proud I was of her.... All we needed to do was get this education and get the good job. This is the thing that eats away at me, the naïveté on my part.” Cathryn Munna is a grown woman and rightly takes responsibility for her own decisions.
Yet, where did she get this idea that “all we needed to do was get this education and get the good job”? Where did she get the idea that getting a liberal arts degree from NYU would be a good reason for her daughter to go $100,000 into debt? Did these ideas just occur randomly to Cathryn Munna? Were they bizarre, out-ofline, wacky beliefs relative to the culture around her? Where did she get the idea that this was the only way for her daughter to pursue a successful and happy life?
This is the cultural climate in which parents and adolescents are immersed: the myth of higher education. The idea, promulgated in surround sound by other parents, teachers, school administrators, guidance counselors, college brochures, and politicians, is that your only hopes for economic empowerment involve borrowing large sums of money to get a BA degree, and once you have this magic degree, your ticket for life will be written. This is the water we swim in.
An analogy is useful here. The New York Times article makes this analogy explicitly: the housing bubble. Sure, the