The New York Times recently looked at the sad plight of Cortney Munna, a 26-year-old graduate of New York University with nearly $100,000 in student loans -- for her, an insurmountable sum that she cannot afford to make payments on. Columnist Ron Lieber wondered who was to blame for her plight: " ... perhaps the biggest share lies with colleges and universities because they have the most knowledge of the financial aid process. And I would argue that they had an obligation to counsel students like Ms. Munna, who got in too far over their heads."
NYU's financial aid office helped set her up with the loans, and Lieber asked whether they should have warned her.
"I think that would be completely inappropriate," Randall Deike, the vice president of enrollment management for NYU, told Lieber. "Some families will do whatever it takes for their son or daughter to be not just at NYU, but any first-choice college. I'm not sure that's always the best decision, but it's one that they really have to make themselves."
Deike's response is perfectly reasonable -- and it's also the same response you'd likely get from a mortgage salesman who helped someone get a negative-amortization, subprime, adjustable-rate mortgage: "It's up to the consumer to decide what is best for them." Peddlers of credit cards, payday loans, and luxury cars all make the same argument.
Let the Diploma Buyer Beware
The question is whether a prestigious nonprofit institution of higher learning should hold itself to a higher ethical standard than, say, Countrywide Financial held itself to. Should NYU's financial aid office consider it part of its mission to help people improve their financial lives, or should it be a passive enabler assisting its students in destroying them? Have we come this far to learn that, when it comes to social responsibility, colleges are no different than payday lenders?
It's deeply disappointing that NYU's response to its students drowning themselves and their families in debt in order to attend the college is to shrug and say it's a decision families have to make for themselves. As a nonprofit educational institution, NYU should have some fiduciary responsibility to its students that goes beyond the relationship a Mercedes dealer has with a customer.
Many observers will invoke the personal responsibility argument, and blame the student and her parents for the mess she's in. Certainly there's some validity to that. Their mistake was naivete: they thought that the financial aid office at NYU was there to help them. Let this be a lesson to future NYU students (and, tragically, students at most other colleges): The financial aid office is there to get you to come up with the cash to pay the school its tuition. And if they have to help you ruin your life to make that happen, they have no qualms about doing that.
Should NYU Be More Socially Responsible Than a Subprime Lender?