WALTER RUSSELL MEAD: Middle-Aged People Drowning In Student Loan Debt.
Sadly, government’s fingerprints are all over this mess. In a well-intentioned effort to make higher education more widely accessible, the government offered large student loans without asking many questions. Two things happened.
First, colleges kept raising tuition. College tuition has been rising faster than inflation for quite some time, in part because schools added layers of administrative bureaucracy and offered gold-plated student services. As long as students could rely on government loans to help pay their way, colleges have chosen to compete on amenities rather than on value.
Second, students got out of the habit of thinking about a college education as an economic decision. Students were encouraged by parents, teachers, college guidebooks and guidance counselors to find the school of their dreams rather than a school that they could afford. Unfortunately, if you borrow money, you have to pay it back. Many graduates are now learning this lesson years too late.
Banks and Wall Street, as usual, got into this act too. And with all that student debt on their hands, they lobbied to make sure it couldn’t be discharged in bankruptcy. Now we have $1 trillion of student debt, and a lot of it can’t be repaired. Lives are being damaged, and young people who should be thinking about starting families and careers are instead being saddled with new burdens.
This is terrible social policy. It is deeply destructive.