DO TELL: The Economist: Is college worth it? Too many degrees are a waste of money. The return on higher education would be much better if college were cheaper. But while I appreciate the plug, I must quibble with this:
What is not in doubt is that the cost of university per student has risen by almost five times the rate of inflation since 1983, and graduate salaries have been flat for much of the past decade. Student debt has grown so large that it stops many young people from buying houses, starting businesses or having children. Those who borrowed for a bachelor’s degree granted in 2012 owe an average of $29,400. The Project on Student Debt, a non-profit, says that 15% of borrowers default within three years of entering repayment. At for-profit colleges the rate is 22%. Glenn Reynolds, a law professor and author of “The Higher Education Bubble”, writes of graduates who “may wind up living in their parents’ basements until they are old enough to collect Social Security.”
That is an exaggeration: students enrolling this year who service their debts will see them forgiven after 20 years.
Well, yes, if you pay your debt for 20 years. But as I note in The New School, there are already people having their Social Security checks garnished, and there are plenty of people who have accumulated large debt because they aren’t able to make the payments. The Income-Based Repayment scheme helps with that some, but not enough, and it applies only to new borrowers, not to the already indebted.