So everyone did. Total student debt outstanding is now around $1.5 trillion. It’s the second-highest debt burden carried by Americans. We owe more on housing ($8.8 trillion) but much less on credit cards (about $1 trillion) and other forms of consumer debt. The biggest creditor is the U.S. government. In fact, student debt is the largest line asset in the government’s receivables accounts, climbing from $115 billion in the fourth quarter of 2007, when the Great Recession began, to $1.2 trillion in the second quarter of 2018 – an increase of more than 1,000%. And once you owe the money, you have no choice but to pay it back. The only other option is to try for loan forgiveness, for which there is (naturally) a federal program. To qualify, you must: be employed full-time in an eligible federal, state, or local public service job or 501(c)(3) non-profit job, and have made 120 eligible
free college educations for all, paid for by taxes on the “Wall Street speculators.” As for those who have already been to college and are now struggling with debt, he wants the government to lower interest rates and stop making a profit on student loans. Meanwhile, those who dug themselves into five- and six-digit holes continue to struggle. They put off marriage. Or, if they are married, they defer buying a house or having children. These second-order consequences of the student debt crisis recall the famous “law of unintended consequences.” We made a college education attainable to just about everyone, creating a large cohort of young people who can’t take risk. In the process, we incentivized non-private sector work because it promises – but does not necessarily deliver on – debt forgiveness. Student debt has, likewise, degraded the nature and character of higher education. University presidents are paid not to be educators but, rather, educational entrepreneurs responsible for building the endowment, infrastructure, and a winning football program. The result is a glut of young people with degrees who cannot find work that pays enough to get out of debt. And the prospects for this new American debtor class are grim. Geoffrey Norman is the author of 12 books of fiction and non-fiction, and many articles for periodicals including the Wall Street Journal , Sports Illustrated , National Geographic , Esquire, Men’s Journal , the Weekly Standard , and others.
on-time payments on your loan. And how is that working out?
There has been more than 41,000 applications for forgiveness of debt under this program. As of last fall, 206 of these had been accepted. The other 99% were denied.
UNINTENDED CONSEQUENCES
Those are the sort of numbers that lead one to think that there is probably no easy solution to the problem of student debt. And, of course, this stimulates the demagogues out there to call, as Bernie Sanders does, for
American Consequences
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