The crushing burden of student debt

Student loan debt is the one form of U.S. debt that is still going up, and, as Mike Konczal pointed out, student debtors are treated much more harshly than ordinary debtors.

If I am driving around while texting, and I negligently run over and kill a child, or if I am in a gambling institution and I have an 11 and the dealer has an ace, and I mistakenly double down and get a huge gambling debt—those kind of debts—hurting someone, killing someone, gambling debts—are treated less harshly under our bankruptcy code than the debts associated with trying to educate yourself.  Student loans are the most repressive debts under the legal structures that we have.  These are democratic bills!  People voted for them.  Hillary Clinton voted for the 2005 bankruptcy bill.  Biden voted for it; Biden pushed it.  These are things we have chosen, and they are incredibly repressive.

via n+1: Debt.

The problem with student loan debt is not just predatory lending, but the interaction of predatory lending, escalating tuition rates and the meme that a college degree is necessary to economic survival.  Student loan debt would not be a problem if (1) we had a full employment economy in which a hard-working high school graduate could make a decent living, (2) we once again had public university systems offering a college education at free or low tuition to anyone capable of doing college work, (3) we had community colleges offering job training (which is different from education) at free or low tuition, since employers no longer do so and (4) employers asked for educational credentials only when they were relevant to the job requirements, such as for engineers or nurses.  But I don’t see how to bring about any of these things anytime soon.

Click on Why Tuition Has Skyrocketed at State Schools for background by Catherine Rampell of the New York Times on why college education is no longer affordable for average middle class and working class families.

Click on Degreeless in Debt: What Happens to Borrowers Who Drop Out for a report on the plight of student debtors who drop out of collage.  More than half of the students who enroll in four-year, for-profit colleges quit before getting their degrees.

Click on Student loan debt up, all other kinds down for facts and charts from Doug Henwood.

Click on Education Debt in the Ownership Society for thoughts of Pamela Brown of the Occupy Student Debt Movement.

Click on “Fix the Economy, Forgive Student Loan Debt” for an article by Minjae Park for the Washington Monthly on the proposed Student Loan Forgiveness Act.

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One Response to “The crushing burden of student debt”

  1. Atticus Finch Says:

    This is the problem I see.

    1. College degree is overvalued
    2. Alternative education is undervalued (trade school)
    3. A “free” public option can’t work because it will be translated into a tax burden. Also to get quality professors you have to pay them well which increases the costs and thus increases the tax burden. Costs will still be a problem and will also artificially inflate demand since education will be “free.” Maybe the solution is increasing the standards of acceptance and not the costs – but then we still have the problems of 1 and 2 above.

    We are slowly developing into an economy like Japan’s where a college degree means nothing. The new High School degree is a college degree.


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