Living in New York City
is not can’t be for everyone!
Over the past few months we have written articles concerning the affordability of housing in New York City and how, whether for rent or for purchase, things have gotten much tougher for all but the super-wealthy!
But, other than the basic costs of housing, for many recent college graduates there is an additional and quite insidious impediment to living in NYC in the form of outstanding student loan debt.
This financial overhang either makes living in New York City impossible or makes it necessary to make some fairly major compromises in terms of location and sheer number of roommates required to make it all work.
A New York Times article that ran over the weekend tells the story well.
Young and in Debt in New York City
Student Loans Make it Hard to Rent or Buy a Home
For young people, moving to New York City hasn’t made much mathematical sense for decades. The jobs don’t pay enough, the internships don’t pay at all, and the rents are prohibitive by any sane standard.
But now add a new economic fact of life to that list: soaring student loan debt. More students are taking out bigger loans than ever before, and in the last 10 years alone, education debt tripled, reaching over $1 trillion. A record number of college students are graduating knee deep in a financial hole before they begin their adult lives.
Still, new research suggests that college is working, economically. Four years on campus nets the average graduate almost twice as much in wages as someone without a degree. Those odds may be comforting in the long run, but not when you’re young, deeply in debt and trying to nest in New York City.
For many people in college and recently out of it, the pressure of debt seems to be colliding in new ways with the problem of finding a place to live in the city, adding a layer of complication to something that was already plenty complicated.
When Tierney Cooke arrived in New York City in 2010, she faced a daunting choice: pay rent or pay off her student debt. She had taken out loans to put herself through four years at the University of Washington in Seattle, and her first job as a nanny barely paid the bills.
The total loan payment “was coming in close to $1,000 per month,” Ms. Cooke said. “There was no way that I wasn’t going to pay rent. I didn’t think of it as a choice.”
Ms. Cooke, 26, a California native, eventually landed a job in digital advertising, but still couldn’t find the money to pay the rent and the debt collectors at the same time.
Several missed payments dashed her credit score and that of her father, since he had co-signed the loans. Ms. Cooke stifled her dream of living alone.
“I take my responsibility for my part and not being on top of it,” Ms. Cooke said, but added that she signed on the dotted line as a clueless teenager. “At 18 or 19, agreeing to take on thousands and thousands of dollars of debt, I had no idea what it meant.”
The rest of the article can be read here.Google+