Eliminating All Student Debt Isn’t Progressive

It would be a giant welfare program for the upper middle class.

Comments: 224

  1. If landlords can write off their investments while raising rents, maybe students should be allowed to write off their investments as well.

  2. @Mr Rogers. Students get large tax credits to help pay for education and can write off the interest paid on student debt.

  3. @Mr Rogers I could tax deduct my student loan interest payments.

  4. @Mr Rogers We are allowed to, and we do. When business owners “write off” investments, that means they count them as expenses, and then don’t pay taxes on the money they spent. Student loan interest IS tax deductible. Careful thinking and policy-making—he kind Leonhardt is advocating here—demands that we pay attention to details. Landlords don’t get to borrow money, spend it, and then not pay it back, which is what this brief comment seems to be suggesting we should let students do. The tax deduction on interest already subsidizes the upper middle class, and encourages borrowing, just like the mortgage interest deduction does. If we let people deduct the entire cost of their loans from taxes, guess who would benefit most? Doctors and lawyers, ie people with expensive degrees.

  5. Leonhardt has me sold Killing all debt's too bold, But Bernie's public college bill Protects the poor and has the will, So let's make City, State U's cheaper Not let student debt get steeper.

  6. American higher education badly needs reform. Frankly it's out of control. It may be difficult to deal with the current student debt issue, but it's relatively simple to stop the problem going forward. I would suggest the following reforms. 1) Make For-Profit Schools ineligible for federal student loans. A lot of for profits have the business plan of encouraging people to borrow money to pay high tuition so that they can get college degrees, only to find out that they're worthless. This one step gets rid of half the problem. 2) Students who need loans should take the first 2 years at community college. Community colleges are much cheaper. 3) If a student decides not to go to community college then make University freshmen ineligible for federal student loans. Lots of students find out after their first year that they're not college material. After 30 credits, students with an acceptable GPA (2.0 or higher) can borrow. 4) Limit how much students can borrow based on major. No more Gender Studies majors borrowing $100k when they have an earning potential of $20k. (4) More public trade schools. Colleges cost more than their degrees are worth. If one has to mortgage 20 years of his future to pay for 4 years of education, one has to seriously question whether the endeavor is worth the cost. Especially, when there are alternative jobs that may not be so "prestigious" but pay more and cost less to obtain, such as becoming an electrician, plumber, carpenter, web coder, etc.

  7. @Bill Brown Good ideas. Eliminating student debt does nothing to solve the root of the problem; what an impractical proposal. Easy credit has enabled runaway tuition over the decades, such that it net value is often questionable, something the public if not some politicians are finally beginning to recognize.

  8. @Bill Brown You nailed it. For-profit higher education is a con. Our generous GI Bill program is a cash cow for some morally bankrupt institutions. Your ideas would goma long way toward solving problems, but we need to re-invest in public education at all levels and de-fund for-profit in education and healthcare...two classic industries economists say are prone to “market failure.”

  9. @Bill Brown I'd add to your last point that we should be really funding and/or re-establishing public high school vocational training programs. There's no good reason to make teenagers who fully expect to become mechanics or child care specialists or machinists or chefs to spend their late teenage years learning how to analyze English literature, and then force them to struggle for several more years flipping burgers or stocking shelves while they take on debt to learn their trade.

  10. This is one of the many examples, where the US, having gone down a rabbit hole, it seems impossible find a way out. I agree with @Mr.Rogers, that student debt forgiveness should focus on those in need (however that is defined), but that will entail another bureaucracy to evaluate the "need". The original rabbit hole in this case is not to make college/university level education free long ago, similar to most European countries, and, btw, what California used to do, not as a "social program", which seems to be a dirty word for so many Americans, but for the purpose of better equipping future generations for the extremely competitive world we live in, i.e. in a real sense, for our own national self-interest. The other huge rabbit hole the US is lost in is, of course, universal health care. All that conservatives have to do is mention the (meaningless) "cost" of, what $35 Billion?, and everyone is scared to death. I am not optimistic for any meaningful legislative changes to come about from this new Congress, which is split and thus again set for complete inability to accomplish anything. Given the American system of two year terms for the House, all the new members will almost immediately be fully engaged in the next election campaign, including the endless process of raising money. Even with the relatively strong House majority, Democrats will (again) engage in fractious infighting

  11. @Claus Gehner. This government under Republicans cannot even see their way to forgiving the debt incurred by students who were unfortunate enough to be given the educational and economic shaft by schools run by crooks and con men. You know the ones like our President?

  12. I’m a pretty conservative guy, but I favor across-the-board student loan debt relief. It’s unfair to use a parent’s income to determine need, especially when most parents have had enough. All students are “poor” when they graduate from college, with the exception of a few trust fund kids. But, the first step has to be to make universities spend more of their endowment and to limit faculty legacy costs like retirement and health care, just as the for-profit businesses must. Students should nor have to foot the bill for faculty retirement giveaways.

  13. @Conservative Democrat Universities typically do not have legacy costs for retired professors because of outside contractors, primarily Teachers' Insurance and Annuity Association. The comparison with for-profit corporations is inappropriate.

  14. @Conservative Democrat - Health care and retirement funds are "faculty giveaways"?! Private industry uses the same incentives until they pull the rug out from under the feet of employees who work for them for decades The point of an endowment is not to spend down the principal but to use the earned income as scholarships. A college with a smaller endowment also can't support as many scholarships...

  15. It would be life-changing for me. Would make homeownership a more serious possible. But, since David's had a different life experience with his Yale education, I guess that's good argument

  16. @Brent Sure, it would be life changing for me if the government would pay off my mortgage.

  17. @Brent, thanks for your response. I guess I'd turn the question around: Are you in favor of forgiving the debts of all of the recent Ivy League graduates who haven't yet paid off their loans -- the vast majority of whom are doing just fine and will be able to use their good salaries to pay off their loans? I don't think American taxpayers should be asked to subsidize those Ivy League grads. I do think the government should do much more to help people who are going to have a much harder time paying off their loans.

  18. @Keith I think that comparison would be valid if I had the option of dealing my bachelors degree like an asset in the same way that a house can be refinanced, sold, etc. I'd argue that a mortgage is not an equivalent financial burden to student debt in that sense.

  19. Change the laws so student loan debt can be discharged by bankruptcy. Make the creditors assume the risk for the loans.

  20. @Jay "creditors assume the risk for the loans" Most (95%+) of the outstanding student loans are US Govt loans. The Creditor is the US Govt = taxpayer = federal bailout of students. I support making all FUTURE student loans dis-chargeable in bankruptcy - that way they will have interest rates in line with the risk of a dis-charge - like credit cards - 12 -18% ..People won't borrow as much.

  21. @Jay Go to schools one can afford. Community college for two years then state school to finish bachelors. Pell Grants will cover most costs. And work.

  22. I completely agree with Mr. Leonhardt from the point of view he has presented; that essentially it's a upper middle class economic relief. While that's better than a billionaire tax relief, it's still far from the many areas where that 1.4 trillion dollar could be spent in welfare. However the main reason I think that student loan shouldn't be forgiven is because it will set a precedent which will encourage the private universities to increase their tuition. University tuition in the U.S is ridiculously high and a lot of it has been encouraged by the availability of student loans. I work in one of the better private universities and the eateries, and the glass palaces, which can shame many hotels, are simply unnecessary wastage of money. And many upper middle class families choose to take the loans to send their kids to universities which often sell themselves as expensive finishing schools and centres for networking opportunities that simply extend the initial economic advantage of these families. I see no reason why the general public should subsidize that advantage.

  23. @A. Roy To help the lower and middle class, why not take one page from Bernie's book and make public universities tuition free? Doing this while funding them sufficiently well so they provide a quality education may also force private universities to lower tuition, since they will have to compete.

  24. @MC I have always very strongly agreed with Sanders' position that public universities should be tuition free. After that if the private universities wish to charge their students exorbitant fees, and if their students/ their families wish to pay that, that's their choice but the rest of us shouldn't subsidize that choice.

  25. @MC I agree with MC. There is no reason to subsidize private colleges and universities. Making public universities tuition-free is a policy I support. Public colleges and universities provide excellent educations, comparable to the best of the private universities and colleges. I speak as an educator who taught at both private and public institutions for almost 50 years before retiring. I also speak as someone who benefitted from a fortuitous one-time subsidy of my tuition from a very wealthy individual whom I will not name at a private university for my freshman year. It was an unusual situation, and although I was grateful for the help this individual gave me, which would have continued had I asked, I wanted to be responsible for my education, and I paid for my remaining three years with a loan from that university (in today's dollars amounting to about $30,000). But the tuition at that same university today would be a significantly larger multiple of that amount, well over $100,000, which illustrates the inflation of education costs that we've seen. Tuition at the public universities that I have taught at have not increased at nearly that rate. These schools provide an excellent education at a good price. Both of our children attended private colleges, but we saved from the moment they were born and were able to put them through college without loans. We wanted to give them the option to get their education where they wanted.

  26. How can costs keep rising when TAs and adjuncts haven't had a raise in decades?

  27. Tuition has risen to offset reductions in the public portion of the cost of education.

  28. @northlander Many opine about increased tuition costs without understanding the drivers. Several line items - health care costs most dramatically - have increased far more than the cost of living. When I led a school, group insurance rate premiums increased 7-10% every year, even after hard negotiation. Health care costs can bankrupt any organization with personnel-intensive budgets. And schools and colleges are among the most personnel-intensive. Of course institutions could simply stop providing health insurance and put the burden on employees, but that defies the social contract that decent employers have made and should make with their employees. Until and unless we have a different system, employer-based health care is the only way to protect people from physical and economic disaster. And so, in an odd way, student debt is subsidizing the rapacious health care industry. Go figure.

  29. @Barking Doggerel While rapidly rising health care costs are an undeniable problem for all of us, your suggestion that this is a primary factor in rising tuition seems suspect. For purposes of doing a credibility test, let’s assume the following: 1) Approximately 50% of tuition goes toward salaries 2) Medical insurance costs another 20% of salaries 3) Medical insurance costs have been rising 10% per year Using these assumptions, simple multiplication would indicate that tuition would need to increase just 1% per year to cover rising medical insurance costs. So clearly, citing rising medical insurance costs as the primary cause of out-of-control increases in intuition would appear to be a smoke screen for the actual causes.

  30. Mr. Leonhardt has long had it in for the leftmost part of the left, digging at it at times and now, appropriating. Eliminating student debt is progressive, and how... It wasn't that long ago that Bernie Sanders and Hillary Clinton debated on a few stages around the nation and, every single time, Mrs. Clinton would not get behind free college and debt elimination. The most she would do was debt-free college. Who, more than anyone, represents the liberal side of American politics on the left than Hillary Clinton? Instead of trying to knock progressives, let's just talk up policy that makes sense. Canceling debt is one big sensical thing we must do. Paving the way for free college is another. It's a budget item and money that will go to the states for that specific purpose. 2020 will come soon enough. Meanwhile, let's keep things even and peaceful. --- Things Trump Did While You Weren't Looking https://www.rimaregas.com/2018/08/07/greed-malfeasance-never-sleep-blog42s-things-trump-did-while-you-werent-looking-august-december-2018/

  31. Under the Reagan administration, Republicans (and some conservative Democrats) made huge cuts to federal grants to students, and middle class families lost access to low-cost federal student loans. This made it much more likely that parents and students would seek private loans for college. Then, in 1984, the Bankruptcy Amendments and Federal Judgeship Act exempted private student loans from bankruptcy. In other words, a student can run up extravagant credit card debts and discharge those in bankruptcy. But it is extremely difficult for that same student to have her/his private educational loans discharged. On top of that, we have now predatory for-profit colleges that dupe students to maximize their private loans with fraudulent career promises - a scheme that Secretary of Education DeVos seems unwilling to challenge aggressively. Here are two suggestions. First, amend the bankruptcy laws to make it easier to discharge student loans. Why should those debts be treated differently than others? (The Department of Education was reviewing this, but nothing has happened yet.) Second, aggressively prosecute for-profit colleges that game the student loan program, and stick unwitting students with a bill that's nearly impossible to erase. These two suggestions won't fix the student debt problem, but they would at least provide options to students with financial hardships.

  32. @jrinsc . . . and here's a third suggestion: why don't we try greater investment of public funds in education, rather than continued cuts and shifting costs onto private citizens via student loans. Perhaps we should re-think the 25% cuts to federal educational grants passed during the Reagan administration. Republicans like job training programs, in part because they help their corporate backers. But their commitment to colleges and universities is less than clear . . . perhaps because an educated citizenry might see through their policies and deceptions?

  33. @jrinsc job training programs do exist because of corporate backing, but the goal of even the corporate backers is to turn out graduates with degrees more applicable to reality than Underwater Basketweaving. There has long been a huge disconnect between expensive undergraduate degrees and the practical skills which are actually required of college graduates today. And the gap continues to grow larger. To which the question is: are we better off as a society underwriting expensive degrees that have no chance of earning their cost back, or favoring programs that fortify talented young people with the skills they neede to succeed? Much of this ‘crisis’ has arisen from this disconnect between universities and post-college employment.

  34. The reality is the opposite of the claims in this post. The upper middle class can shoulder the debt burdens of their children. It's the middle class students who are on their own. College used to be an engine for income mobility - and student debt is an effective tool for preventing that. Yes, college students come from wealthier backgrounds on average.So pay for it with a progressive tax system, the way we used to. And reopen a way for smart kids from modest backgrounds to make something of themselves.

  35. Your article fails to consider the rise of tuition in relation to earnings and the reasons why people who had to borrow money for school also felt the pressure to drop out. Many young students have to figure out their own rent and housing while attending. Since you mention your extended family who helped pay your tuition you may not know about that. Your scholarship and acceptance to Yale also indicates you are basing the life experience of ordinary students to your own advanced academic and earning capabilities. Often people who come of age in a different era don’t seem to accurately recall how much less the cost of college was when they attended. Many state schools were free years ago or close to it. You also fail to acknowledge today’s need for a Masters degree when there was once only a Bachelors to gain employment in fields such as teaching. You also fail to take into account the rising cost of housing and healthcare that is extending the age at which adulthood and independence begins for college graduates. I had a professor tell me that when he went to school for social work he not only received a scholarship but a stipend to support him. He noted that he wasn’t a particularly good student and didn’t do anything extraordinary to earn it. They just needed social workers and were putting money into society and helping educate people in a way that isn’t done today. Your article gives an opinion with no particular answer.

  36. I know what you are saying and seems sensible, but then again this argument is based on a curious assumption. Maybe Leonhardt should think about the simple fact that most students have no significant earnings or savings, and so are not upper middle class the moment they graduate from school. Now of course their parents might have upper middle class incomes and these students may have formerly enjoyed the basic advantages of an upper middle class family when they lived at home, but I'd like the author to pinpoint the philosophical premise that underlies the argument that those kids should have to rack up a hundred grand in personal student debt for an education, while a kid from the projects should not. Does it have to do with post-college parental support or future inheritance -- not sure student loan subsidies are the way to regulate to this "issue". Or is the idea that rich parents should pay for their children's college? I actually agree with that--but what if the parents just don't. And aren't progressives having it both ways here--a rich family shouldn't be allowed to buy their child a privileged education (whether through the PTA or private school or elite colleges). Instead, they should be forced to buy their child a completely average one? Or is it really just some kind of social engineering that the author seeks to implement. Handicap the previously advantaged the moment they strike out on their own--all in the name of social justice.

  37. @Mmm did you not notice the statistic in the column, " The average four-year college graduate who takes out loans ends up with less than $30,000 in debt." Follow the link if you need to be convinced. so your $100000 example, while outrageous, is not the norm. $30000 is the price of a midsized car. (middle class) people buy them all the time. i think leonhardts proposition makes sense over the long run of a college graduate's earning years.

  38. The argument tendered should be considered in terms of biased data. The existing conditions regarding both the availability of higher education and the selection criteria heavily favor people who are affluent. That necessarily provides data that leads to a conclusion that elimination of student debt will just be money given to those who have less need for it. The fact is that higher education is out of reach for all but the affluent without so great a debt burden that it just discourages eligible students from families with lower incomes from applying or if admitted, accepting. Those who end up with the greatest debt are kept from improving themselves for a decade or more. This probably means that this makes their lifetime earnings far smaller than those who have no debt or can pay it off in a couple of years.

  39. Schools and school districts where famliles’ average incomes are much higher offer better educations and send far more high scrolls graduates to colleges and universities. This alone tends to biases the data by excluding graduates who just did not receive the same benefits as those from affluent family ties.

  40. Here is the problem with our social net in our country, precisely that it very rarely boosts the middle or upper middle class. Other countries support working and educated adults with subsidized higher education, guaranteed parental leave, mandatory minimum vacation days, etc. In the US, on the other hand, there is none of that, and the federal and state support for higher education has been whittled away every year. This leads to immense resentment in the middle and upper class of the social safety net system, because they don't benefit. While the poor receive food stamps, subsidized housing, maternal medicaid programs, the working class are left to pay top dollar for these amentities. Frankly, the US does need to eliminate student debt for precisely the reason listed by Mr. Leonhardt. It is utterly inconceivable that a hardworking and determined student should be charged 6.7% (my own federal student loan average) interest. The current system acutely penalizes young, motivated individuals with massive loan burdens. Of all the sources of waste in federal spending (e.g. the military industrial complex), eliminating student debt would be the wisest investment our government has made in a long while.

  41. @Alex. Alex has it exactly right.This argument that we shouldn't do it because it benefits upper class and affluent people is absolutely brain dead. Why would any upper class or affluent parent want to vote for the party that holds this idea and why would any non-upper class, non-affluent parent want to vote for somebody using this reason to prevent relief for their child. This is obtuse, stupid reasoning. We can't help the poor people because we might help all the people? Are you kidding?

  42. @Alex Great points. One of the lessons of the ACA should have been that means tested programs invite resentment, and therefore make them more vulnerable to cuts and elimination. The resentment over ACA subsidies and Medicaid expansion was mostly from those just the wrong side over the income cap that didn't qualify for either, yet faced pretty steep prices for policies they were required to purchase, and that often times came front loaded with steep deductibles to use. Reformulating the subsidy to cover a % of income to ensure no one spent more than x% of their income on health insurance would have evened the benefit. A means tested debt forgiveness program would invite the same resentments. It should be universal or not at all. It could be formulated based on amount owed and income but it should not exclude a large portion of the population, based on their parental income, when we already know that student debt is affecting many so-called middle class students negatively in terms of putting off home buying, cars, and other life investments. Any debt forgiveness should be coupled with real education financing reform. For one, loans should not be given to for profit colleges, perhaps making the schools hold the loan instead of the student, conditional upon graduation and successful job entry. Putting more budget $ into state and community colleges to make debt free tuition a reality is another.

  43. @Alex A lot of the government spending goes to the middle class and the upper middle class. In particular, the mortgage interest deduction and the tax exemption for employer-provided healthcare are huge subsidies that benefit the middle class.

  44. Student loans are guaranteed by the government. Yet, the interest rate is > 7%, more than a mortgage. Also, one cannot discharge the student loan, so there is absolutely NO reason for this high interest, which only lines the pockets of the originators (banks). On the higher income spectrum, many families fall through the crack of not getting aid from the college, and not having enough to pay for the college. That the US has a private university system is a farce.

  45. @TT For federal student loans, which are the majority, I'm pretty sure most of that 7% interest goes to the federal treasury. Maybe I'm wrong.

  46. @TT -We don't have a private university system. We have private universities, and public ones. -Student loans aren't 'guaranteed' by the government. Some are subsidized, all are regulated, but all of them are paid for by the borrower. So unless you mean something else by guaranteed... -Interest on my loans is 3.75-4.25%. There is no "THE interest rate," and frankly, if there are people getting 7% on loans that are that low-risk, I should stop typing this and go become one of them. -"Fall through the crack" refers to a failure of social safety nets. By definition, 'higher income' can't fall through the cracks. The distressing thing is that 58 people recommend this, and think that this kind of ill-informed, imprecise thinking contributes something to the discussion.

  47. Loan forgiveness is a transfer from tax payers to Universities. Since increasing tuition, fees, and costs of room and board will not affect the ability of the consumer to finance them at zero cost, University will rise them. Taxpayers will end up financing the default costs. This is like free education but inefficiently financed as it does not curb the costs.

  48. @DL Yes the great Liberal college education scam is revealed. Do away with private education loans and eventually loans are forgiven and what ends up is free college education ! The Liberal politicians like the idea, the liberal media stays quiet, the liberal education world loves the plan because it increases the number of jobs & the wages ! Only taxpaying Americans hate the idea !!

  49. Has it never occurred to the writer that the reason this type of student debt is largely held by students from upper middle class families is that the high cost of college deters lower-income families from sending their children to expensive colleges?? They don't even apply to these schools. More would if college was subsidized. Nor does it occur to him that the reason humanities departments are collapsing is that students are terrified to major in fields that don't pay well--they know they're going to have big student debts to pay off for years.

  50. @Cyntha Ironically, if a student does get admitted to a high-end, big name university, often the university will meet their need. These are the very schools that have large endowments and enough wealthy students paying full price that they can afford to be generous to the underprivileged. It's not easy to get in, but if you do, you will often graduate with less debt than you would have at a lesser school. But unfortunately, those who could most benefit from this often don't know it.

  51. I graduated from law school as a single mother eight years ago. I am still a single mother, now raising teen boys as I watch my law school debt compound daily at 7.9%. Despite having excellent credit score, no other debt, the system does not allow the ability to negotiate a lower interest rate. I tried. I was told again and again it is "impossible." I have watched my balance balloon, even though I've made payments of $500-$800 a month for eight years. Sending the money in is as effective at reducing my debt as setting it on fire, the only benefit I receive from actually mailing it in instead of turning it to ash, is that it keeps my credit rating good. But who needs a good credit rating if I am never going to qualify for a home loan because of my ever-growing debt. Loan forgiveness would transform our lives, allow me to save more for my sons' future college experience, possibly allow me the chance to buy a home, and, most importantly, relieve the ever present pressure the loans cause. This problem is real.

  52. @Mieke ter Poorten It appears that the exorbitant interest rates are the bigger part of the problem. IMO, student shouldn't be given carte blanche to run up huge debts while attending college. Neither should the students be subject to 7% interest rates. Federal government financed loans at a very low interest rate would do much do reduce the problem.

  53. @Mieke ter Poorten - the problem is real for everyone but the point of the article is it's even realer for those who didn't graduate, and that priorities may have to be set. A society that focuses help on the least fortunate improves faster than one that focusses on the more fortunate.

  54. @Paul Adams Mostly agree, but I am mindful of the "middle class resentment" on things like ACA subsidies and need-based aid: "The poor get all the help. I'm working hard, being frugal, but get no help and struggle." I see a two-prong solution: 1) lower the interest rate (7% is insane especially in the low-interest environment of the last decade); and 2) raise the income threshhold or slowly phase out help on a sliding income scale, so the middle - especially the lower middle - gets more help.

  55. So Michael Bloomberg just announced $1.8 billion in aid to higher education. Isn't it both ironic and wrong that a businessman like Mr. Bloomberg can write off all manner of debt while investing in his company, but it is nearly impossible for students to discharge educational loans invested in their futures?

  56. @jrinsc You are confused by the words “write off” debt. You are equating what Bloomberg does (ie repay all of his debts in full, with interest) with your proposal that students be able to “discharge” (ie avoid their obligation to repay) their debt. Yes, Bloomberg is able to deduct (on his tax return) the cost of the interest and amortization of the investment when calculating the tax he owes on his income generated by using that borrowed money. But No, he doesn’t get to avoid his obligation to repay that debt, as you are implying by your false equivalency that students should be able to walk away from their debt. However, I would support making the interest and some limited amount of the loan principle easily (ie without need to itemize) tax deductible. This would give the student the ability to reduce his/her taxes based upon their cost of “investment” in their education, similar to how Bloomberg and any other business investor can do. But it stops short of a complete handout. I also support having the government drop the interest rate on these loans to 1% but only for borrowers who remain fully current in their payments. With these changes, a student contemplating college would be able to make a fair/responsible decision: Am I willing to incur debt to fund an education that will afford me the opportunity to repay that debt, at very low interest rates. The answer likely will be different for those choose/complete a marketable degree as compared to those who do not.

  57. @jrinsc No it is not ironic. Student Debt is unsecured. Who in their right mind would give someone $100,000 with no collateral???

  58. The U. S. has a debt forgiveness program or at least the equivalent of it. It's called bankruptcy. Regrettably the way bankruptcy is setup, it is very difficult to get student loan debt discharged. For some reason, student loan creditors seem to have a preferred status in bankruptcy. That's nuts. Bankruptcy courts are equipped to deal with debt and should be allowed to deal with student loan debt the same as much other debt.

  59. @Charlie: without protections against bankruptcy….no bank would ever loan money to a 17 year old student with no assets or job or education or credit rating. They only agree to do this, because A. the Feds back the loan and B. it cannot be discharged. Students are a TERRIBLE credit risk. Many drop out. Many major in stupid subjects. And most of them would declare bankruptcy on graduation day if they could! -- why not? dump the debts on someone else! If you get rid of this protection….bank will no longer loan to most students and the system we have would collapse.

  60. @Concerned Citizen, totally agree. Although it might be good if the system collapsed and all the student loans disappeared. Especially if it was broadcast widely that the reason is that students are as a group are terrible credit risks. If all the tuition subsidies dried up, maybe colleges and universities would lower their tuition to meet what people can actually afford. The easy availability of student loans is partly to blame for the high tuitions we see now. Discharging all that debt will only exacerbate an already awful situation.

  61. @Charlie "Regrettably the way bankruptcy is setup, it is very difficult to get student loan debt discharged." Not "very difficult": Quite intentionally impossible.

  62. There should be more financial options to deal with student debt. Right now student debt is dragging down a lot of students from starting the rest of their lives: buying homes; buying cars; getting married; having children. If discharging all student debt is extreme, so is not offering any options to work out crippling student loans.

  63. I'm a teacher in my 6th year and struggle paying my student loans. I just want to be able to not worry about paying rent and putting food on the table. My loan payments are 300 a month and I take home 2800/month. It would be nice if the gov. would forgive teacher student load debt.

  64. Government does not one the debt; the debt is partially private and part public. To extinguish the debts, Congress would need the money to pay these obligations. This proposal (for one or two generations) would cost more than the budget deficit for the last two years. On one program? If you borrow money, pay it back. If your job does not pay well, either 1) find a second job; or 2) find a better paying career. Students who borrowed money for an education made a choice. Each borrow must live with the consequences of their choices. From college choice to major choice to job choice. Being a free adult means living with the consequences of your choices. Living in the Bay Area is expensive. Paying off debt for education is expensive. And it appears your job does not pay well. Why the taxpayers should subsidize your decisions and choices is beyond me.

  65. If the taxpayers’ children are precious to them, they should pay those who teach them a living wage. Why wag your finger at those who selflessly serve our children? Your criticism would be better directed at those who selfishly refuse to support them.

  66. Debt should not be fully eliminated, but the crushing interest on the debt should be. Especially on the Parent Plus Loans that I for one needed in spades...because I allegedly make enough money (per FAFSA) to finance my 3 kids college. In actuality I don't make nearly enough to pay in real time.

  67. Forgiveness of student mainly favors the upper middle class *because those are the only people who have decided to take the risk and spend a fortune on education*. People should be encouraged to continue their education and cost should not be a limiting factor. The problem should be tackled in reverse order: eliminate for-profit university schemes; encourage schools that place graduates with paid jobs in their field; and make higher education free or at very little cost.

  68. I find this column unconvincing and out of touch. If I'm inferring correctly from your age, Mr. Leonhardt, you graduated from Yale somewhere around the year 2000? The student debt crisis didn't plateau then, and it has not been improving in the 18 years since. Also, it's nice that your extended family was able and willing to help you pay for college, but I hope you appreciate that that is highly unusual in this country. Not everyone who graduates from college can or wishes to enter lucrative careers. That isn't a sin - the world needs schoolteachers too - and shouldn't mean that they should be punished for their hubris with lives of debt-laden penury. The rich American bourgeoisie - the financially able Middle class families that you say don't need their debts cancelled - is dwindling. And if cancelling student debt gives some 1 percenter graduates a lift they don't need, who cares if it means that millions of poor and middle class students are enabled to live productive, rewarding lives?

  69. @Chris: even assuming you agree with Mr. Leonhardt, I don't see why college debt relief could not be "means tested". Nobody is feeling sorry for rich people who send their kids to the Ivy League, sorry.

  70. Forget debt relief; why not start with the more modest step of making student loan interest fully deductible? Yes, it’s ‘deductible’ now, but only if you itemize, and only the first $2500 per household. So it’s not actually deductible for most low- and middle income households, and mostly not deductible for those with large amounts of debt (think medical school debt) or two income households (how many of us with student loans are married to people with loans of their own?) Corporations are allowed to deduct interest on money borrowed to train their employees; why aren’t American workers allowed to deduct the cost of the money they borrowed to train themselves? Making student loan interest fully deductible would introduce a heretofore missing basic fairness to the tax code. It would also be a lot cheaper than full debt relief, and therefore actually achievable.

  71. @BlueNorth FYI, the $2,500 is an above the line deduction. There is an income cap that limits the deduction if you exceed certain thresholds. But I do agree with you that for someone paying $8-10k a year in interest, $2,500 seems like an insult.

  72. While student debt is a difficult burden for many, some families, like mine, decided to cut back on our expenses save for years in order to allow our children to graduate without any debt. We did not go on many vacations, we drove older cars, we dined out infrequently, we saved instead of spent. How do you justify cancelling student debt if you do not also reward those who sacrificed in order to avoid taking out loans in the first place? It’s not quite an “ant and grasshopper” scenario, as most who incur debts are not in the grasshopper mold. But, speaking for the ants of this world, it does seem to be a little unfair to provide a free or reduced cost college experience for some but to deny it to others.

  73. @JHHVTSC, it may feel unfair now. but at some point, if no student debt is the norm, families like yours could plan differently in the future. public policy shouldn't be based on "it was unfair for me, so it should stay that way forever." no change would ever happen, with that in mind. (ie: "i went bankrupt due to medical bills, we shouldn't reform the health insurance industry")

  74. @JHHVTSC We did the same. We would feel like such chumps if this happens.

  75. You live in Hilton Head — your “cutting back” is nothing like what those of us burdened with these loans have to deal with.

  76. I went to a solid state law school and am a practicing attorney. I work in a field of law that assists those who need it most and consequently is not very high paying. It is incredibly rewarding and incredibly needed - but we (my husband and I) struggle to pay the student loan. We currently pay $650 per month and it will not be paid off for another 26 years. This is the modern version of indentured servitude.

  77. @Jennifer Hang in there Jennifer. It is only a matter of time until our currency is significantly debased. Inflation favors debtors and the US Government--which substantially controls the value of our currency--is the biggest debtor of all.

  78. @Jennifer why are you only paying $650. Based on your numbers, the principal of your loan is likely in the range of $85000. Given that you are an attorney, your household income is highly likely to be greater than $100000, and hence your monthly salary is more than $5000. Why can't you pay more like $1000 per month, the you would pay it off in 10-12 years. If you pay more you can pay it off even sooner. On this salary, it will be hard for anyone to imagine you are barely scraping by and can only afford a $650 monthly repayment

  79. @Hc, Did you miss the part where she is practicing public service law?

  80. The giant welfare program of forgiveness of student debt would benefit the upper middle class. It would relieve parents of the choice between making additional financial sacrifices to pay for more of the education of their children and seeing their children burdened by debt as they were trying to start their lives. But since the upper middle class would pay the majority of the taxes necessary to fund this welfare program, it is not unfair or something for nothing. It is just the socialization of the college costs of upper middle class children, so these costs are paid by everyone. An educated youth is better prepared to make the economy productive enough to support its seniors. An indebted youth is hobbled in the sort of spending and taking on debt that increases demand and makes the economy more dynamic, and thereby hobbles the whole society. The lenders to whom they must repay the money are not going to spend or consume and thereby increase opportunities for investment; they will reinvest the money so that more investment money pursues fewer opportunities. Forgiveness of student debt merely restores the situation of students in other countries and in our past, in which investment in education was seen as building the country's infrastructure. The fear that people will get help who could have done without is just an attitude that discourages any public investment or public infrastructure. Libraries should be only for those who cant afford to buy their books.

  81. David is absolutely correct on this issue, and i would like to add even more detail and force to the argument. One thing that he failed to mention is that a lot of the student debt is also for student who pursued graduate and professional degrees after college. I would argue that there is no justification at all for a mass forgiveness of this debt...it was taken by 21+ year-old college graduates who knew (or should have known) exactly what they were doing when they signed those promissory notes. Another nuance to this discussion was buried in this article...this idea of a $30K average loan indebtedness. There is a good reason for this...undergraduate students are limited in the amount of loan they can take..in most cases, that number is exactly $27,000 over the first 4-years of college and a maximum of $31K if they stay in school longer. So, it is not really possible for the vast majority of students to go over that number. When you hear about students owing $100K+ in loans, those are private loans that require co-signers, so often the students and the parents are both on the hook for that debt.

  82. Eliminating all student debt for education is a good beginning. I do understand David's point of view but disagree that it is not Progressive to eliminate the overall education debt of all students. It is not just the average education dept that we are concerned about but the debt of professional education whether it be in Law or Medicine. it runs in $100,000's . It could be done in two steps. 1) eliminate all interest and fees from the account. 2) Next year eliminate all current loans. All this should also ensure that every student is able to study debt free at all levels of education. Let us get it done.

  83. Law schools are a profit center for universities. There is no expensive equipment required to educate new lawyers that would require such high tuition. Yet the ability to generate excess revenue encouraged far more law school start ups than the U. S. needed resulting in too many students borrowing money they later couldn't afford to pay back. Universities must be required to retain some liability for bad student loan debt to encourage more responsible behavior by their leaders.

  84. @Charlie I wonder if this could work for medical costs -- flood the market with doctors. I wonder if the rate in which the AMA has allowed new medical schools to be built and train doctors has kept up with population growth in the United States.

  85. For the first time in our lives, we are living in a rural area. Most of the people we meet have not gone to college. I can't help but wonder how our neighbors would feel if their tax dollars went to pay for someone elses's college debt.

  86. @Greener Pastures Probably less charitably than I feel about my tax dollars going to pay someone else’s agricultural assistance.

  87. Considering that someone else's "agriculture assistance" is the reason anyone in the developed world has food on the table these days...

  88. @Greener Pastures Maybe some of your neighbors should educate themselves on what's important to a society even if it doesn't benefit them directly. For example, I might not like every book in the library but I recognize that libraries are important. Maybe your blinkered neighbors don't go to college now but perhaps their children or grandchildren will. It's a terrible shame that so many people are unable to think past their own interests.

  89. "To be clear, student debt is a real problem." A bigger problem is that fact that US tuition is far higher than what is common in the rest of the world. Cut the non-academic expensive fluff and establish realistic tuition rates that will provide a good education and allow for research etc.

  90. Your use of averages rather than median values undermines the persuasiveness of your arguments. A $300 month dollar loan payment is most certainly a lot of money for most college graduates who are not making $60k in the STEM fields---and that is most new college graduates. You are also minimizing the financial burden to young people of increases in essential expenditures such as housing costs. Lastly, you seem to think that the middle --even upper middle, class is in much better off financially than it really is. Families making even $80k can struggle to make ends meet with the rising costs of housing and health care, and they are also paying a lot in income, sales, and medicare taxes. The high cost of higher education is holding this country back. You really need to approach this topic from a comparative perspective and look at the differences between the U.S. and countries like Germany and Finland, to understand how you've missed the mark.

  91. Your concern about the injustice in an education system that still witnesses economic segregation, compounded by freeing the wealthy from paying their loans, is well taken. Raising taxes according to our income may be more equitable. This may be akin to allowing the poor access to Medicaid, but not the rich, able to pay for their own private insurance. Ideally then, if our taxation were really progressive, all education ought to be 'free', provided we can achieve equality of opportunity. Unfortunately, we are stuck with the current protracted segregation in education, health, housing and income, depending where we live and what chance we have to make it in this competitive world. For now, making education free for all is not possible...but worth exploring.

  92. I see what Mr. Leonhardt is saying but I do not entirely agree. I believe whoever got taken advantage of by for profit colleges should have their debt forgiven. I also believe that if you follow the government’s directions and stay in a nonprofit you should have your debt forgiven. Why does it matter what background you have? I grew up fairly poor and had to take out a lot of loans but that was no more my fault than a rich kid growing up in his environment. Affordable college is in the best interests of everyone. It will also make colleges change how they pay their professors and fund their athletics. It would be a benefit, not a curse, to get dark money out of college.

  93. The problem with means testing debt forgiveness is that different areas have different costs of living. Comparing low income without consideration of cost of living will not accurately reflect the debt burden. If a debt relief bill can be passed that includes consideration of cost of living for the debtor, I might change my mind. Otherwise, I’d like to essentially forgive most if not all debt incurred in obtaining a four year degree. I’d follow that up with elimination of all federal loan guarantees. The federal government should not be in the business of enforcing for loan sharks. Debts must be able to be dismissed in bankruptcy. Then many of the most abusive practices will be eased.

  94. There is so much wrong about this. First other developed countries, think all of Europe provide free college and now have much higher rates of economic equality than we do. Second many poor and working class did not even go to college because they or their parents will not or can not take out the loans. They go to community college and then never get a full four degree. Eliminating the need for loans would not favor the already rich, it would provide a path for the needy.

  95. I agree. This article shows a disconnect from reality. The author's argument seems to be simple: don't help the poor because it might help the rich, too. Twisted. He states that most student debt is held by the rich. Really? My sense is that most of it is held by the middle class/working poor. But if the debt does mostly belong to the rich, it's because their children dare dream dreams routinely denied others. Tuition and debt terrifies families. They make college a non-starter for many. Not every parent can afford to start saving when their children are born. How many young people are told early on that "college is not for people like us?" To all of you who "worked your way through school": times have changed. A student salary won't make a dent when tuition is $30,000/yr or more. To those who don't want debt cancellation because you paid off your loans, I must ask: Are you actually arguing that since you suffered under a rigged system, but managed to survive, that others should have to suffer, too? We are paying a high price for being wedded to a fixed bad idea. Our current system leads to frustration and despair. It feeds crime and poverty, bigotry and fear. It leaves many in ignorance, unable and unwilling to think, to analyze, for themselves. We need access to education without the trap of indentured servitude. We need to stop seeing education as a personal luxury, and recognize it for what it is: a necessity for a strong democracy and a healthy economy.

  96. This is an inside-out argument. Many of the numbers you cite would most likely change dramatically if the system were changed to make college more affordable. Most college debt is carried by families in the upper-half of the earning scale; well, isn't that because its only affordable to them?

  97. @D. Cassidy Or, to put it another way, isn't most mortgage debt for luxury homes carried by families that earn well above the mean?

  98. Most college debt is carried by the upper-middle class because they had the environment--good neighborhoods, good schools, stable families, the right connections, etc--to thrive socially and academically, and earn admission to expensive universities. More affordable college would certainly change the numbers to a degree, but it would not create a huge wave of suddenly-qualified students from lower income backgrounds (through no fault of their own). The problems run much, much deeper than that.

  99. @Jonathan Stensberg I see. So we have to fix a variety of social ills before we can make college affordable to lower income families. Also, what exactly is the evidence that lower income people can't handle college, as you suggest?

  100. Government benefits shouldn't be progression; taxes should be. If you limit government benefits to poor people, everyone who isn't poor will be opposed to them and you have to have a cumbersome bureaucracy to determine means testing. The key is to give government benefits - eg education, health care -- to everyone, regardless of how wealthy they are and pay for the additional cost by raising taxes on the wealthy. That makes the system as a whole progressive, gets everyone to support the government programs, and reduces government bureaucracy since you don't have to have means testing.

  101. You are exactly right; there must be a way to distinguish between types of student debt and types of borrowers. Sweeping proposals to wipe out all student debt do not take into account that some students take out excessive loans to support more than just paying tuition and fees, and this has been going on for years: https://creativeloafing.com/content-185289-Cover-Story:-Their-cost-to-bear. Also, we should distinguish between forgiveness of undergraduate debt, and forgiveness of graduate or professional school debt. Finally, I think that loan forgiveness over time for college graduates who work in necessary public fields like teaching, nursing, medicine in underserved areas, etc. makes good sense. Current loan forgiveness/loan repayment assistance programs are good; more could be expanded. For instance, while that graduate is in that kind of job, let's forgive the monthly payments. When the graduate moves to a private sector job, or a public position that is paid above a certain level, let that person resume making monthly payments.

  102. I think David needs to take some time speaking to more lower and middle income families that have graduated from a 4 year college or master's program. Student loans and the compounding interest associated with them are tremendous barriers to establishing a stable and financially secure lifestyle after graduation. Sure, people might be able to pay their loans. There are various repayment plans and deferred payment options available afterall. Sure, people know what they are signing up for when they sign the promissory note. But they cannot foresee that their wages will not allow them to cover the cost of their monthly student loan bills, utilities, rent, insurance, food, and the other general costs associated with living within a social and technological community. For many, especially in this housing market, saving enough to put together a down payment for a primary home is daunting and even close to impossible. If we as a society could help alleviate these burdens for smart, hardworking, educated individuals who simply went to school to figure a "better" way to live and contribute to our communities, why wouldn't we? Why shouldn't we? Anyone who disagrees needs to take a hard look at themselves and the people around them and assess whether they are being calloused, insensitive, and ignorant. Consider your privileges and understand that there are those who may be less fortunate than you in ways that are not obvious to you.

  103. I spent over a year looking for a job in my field after graduating, taking a job that didn’t make ends meet. The author is kidding himself if he thinks that it’s no big deal for graduates to repay their loans. I came within several days of defaulting on my loans and was not in the position of getting help from friends or family. A clean break from that would have helped immensely.

  104. Housing is worse than that. A recent grad I know was offered a job in Dutchess Co....the salary was just under half of the living wage, so low that even with more than the legal number of roommmates, there was no place within commute distance to both live and purchase groceries and gas. The HR rep sympathized and suggested couch surfing if there was no relative with a free basement. Lots of greedy older people milking the younger.

  105. If tuition continues to rise rapidly well beyond rate of inflation we can’t simultaneously expect larger numbers of bright young students to go into needed fields such as medicine. Young physicians are already going into 300k of debt, pay over 1/3 of their income in taxes, and pay thousands a month in childcare. At some point it makes more sense to not invest the large amount of time and money at all and learn different job skills at a cheaper price. Don’t complain if there is a doctor shortage then.

  106. Blanket student loan forgiveness is a terrible idea. The prospect may encourage students to take on more debt with hope it will be forgiven in the future, or more default if it is deemed unfair that they have to pay it back. There is no incentive for universities to cut costs, that continue to rise - likely the opposite. Many years ago, I completed college debt-free by working part-time and summers at minimum wage. At the time tuition was 12 times the minimum wage. Tuition at the state university I attended is now 54 times the current minimum wage. (No wonder loans are needed.) Average professors’ salaries have increased at a rate not much higher than the increase in the minimum wage over the past 50 years. Tuition increases seem to be funding the sleek new buildings (some replacements of functional structures) rising at both my alma mater and a large state university near where I now live. If so, student loan forgiveness will mean taxpayer reimbursement for this construction of questionable necessity (at a time of falling birth rates). With K-12 public schools, taxpayers generally can rein in grandiose building schemes at the ballot box. The same should apply to higher education.

  107. Most student loan payments are less than the new car payments they have. For profit college debt should never be forgiven. The students should know better. If Trump wants NATO members to pay a certain percentage of GDP, then to get educational aid states should pay a percent of their annual budgets. Some states pay nearly nothing to state colleges. Good students get more aid

  108. I paid off my undergrad debt within 10 years of graduation. What worries me is your conflation of a graduate’s debt with parents circumstances. Once a student graduates, lives separately, marries and/or has a job, parents wealth should not be part of the calculation. A mere year after getting my BA, my father was on disability retirement. It would have been grossly unfair to expect him to assist me with student loan debt. I do wish there were more accountability to schools that tell unsophisticated potential students not to worry about taking out loans to finance their education (often in for-profit programs) without explaining all the pitfalls. Too often, they paint a rosy picture of a great career for which the students are not prepared when the loan comes due.

  109. Student loans, guaranteed by the taxpayers, are the single biggest reason for the cost of education outpacing infliction by a considerable margin. If students and families had to pay with existing resources, tuition would go down. Supply and demand. End federal student loan programs. They were well intentioned but do more harm to society than they do good.

  110. Totally unfair. I worked 20 hours a week during graduate school, and full time over summer and winter breaks, graduating with no debt. My classmates were skiing or in Europe every break, many graduating with debt. Totally unfair that now while I am finally really earning and saving, my taxes should should go toward writing off their lifestyle choice.

  111. The author prefers to forgive the loans of those less fortunate than your grifter friends. That WOULD be fair.

  112. @RSSF I worked 25 to 30 hours a week and carried a full schedule at school. My grades suffered of course and I never really got to enjoy college life. But I graduated debt free! Then I got drafted...but that's another story.

  113. @RSSF If you were working 30 hours a week and paying tuition out of that amount of income, you were going to college a long time ago. There is no way you could do that now, even at a state school.

  114. Pay all medical school tuition and require all students to work in rural areas, underserved areas or the military after residency: student loan debt approaches $300,000 after medical school, especially for Doctor couples. Doing this for everyone in new school makes it part of the societal contract. We must address the healthcare crisis facing rural areas.

  115. thanks for minimizing all the money that I have paid to my student debt. As a teacher this has been a real hardship and has prevented me from gaining any sense of financial security, the bank bailout cost hundreds of billions that was fine bailed out in a matter of weeks but students don't deserve the same as the richest 1% percent out there.

  116. I'm largely sympathetic to Leonhardt's argument here, but he fails to consider some important points. First, many of those struggling with debt didn't graduate into cushy 50K jobs. They graduated into the 2009 recession and began their careers with the specter of unemployment and underemployment. A lot of research on the topic suggests that their career earnings will remain permanently depressed. Second, many of the booming regions for college graduates go get jobs are in places where 50k doesn't go so far. In NYC for example, the average cost of a one-bedroom is $3100. Even for a young person with roommates they'll still need to spend over 1k/month just on housing and NYC's combo of high state and city taxes will take a massive chunk of income as well. Next you have to remember that with Social Security likely to become insolvent, healthcare costs skyrocketing, and ever longer lifespans, millennials need to be able to save for retirement. That said, I'm not for total debt forgiveness and in fact, I think targeting skyrocketing tuition costs is a better bet. Additionally, further burdening a rapidly evaporating middle class with more taxes is not the answer. Why not tax university endowments over a certain amount? Or tax university building projects that don't contribute to education like sports stadiums.

  117. Taxing endowments would directly reduce the amount of money available for student aid, thereby increasing student borrowing and exacerbating the student debt crisis.

  118. Average salaries don’t mean much. Tech grads alone skew that upward. Median salaries factored by degree earned and locations in cities other than the big higher paying ones would be more realistic. $30K just for education debt with a $300 monthly payment affects access to necessities like housing and a car which are expensive. Of course we should be vetting who gets that debt eliminated. Not terribly difficult to figure this out.

  119. The implication is that welfare is a dirty word. Having lived through the great depression back in the 1930's, I am well aware that government aid to really needy people is as important to a nation as military expenditures extending into the trillions. China is now graduating more technologically sophisticated students than the USA and if the USA wants to maintain its level of sophisticated competence it must subsidize talented people from all classes to gain that ability. Investing in talent is always worthwhile.

  120. Just to add a historical perspective here. I went to a land grant school, the University of New Mexico from 1967-71. I was from a middle class family but anything but upper middle class. My dad was a copy editor for the Albuquerque Journal with 4 kids. My mom was a housewife. Tuition was $250 a semester and books and such were another 150 or so. Because my dad was a disabled veteran of WWII, I also had a living allowance of 135 a month for the first year and a half which increased to 170 for the last two and a half. I finished my degree in 4 years. I took four years off and returned to graduate school at the University of Colorado in 1975, earning an MA in 1978 and a PhD in 1984. This was paid for by grants, scholarships, and 7 years of working as a teaching assistant while I took 2 courses each semester. Also figured into the equation was the fact that 65-75% of my education was covered by tax-payer dollars (Now the states pay 7-10% and students and their parents pay the rest). Loans didn't come along until late in my student career and my husband I graduated with about $10,000 of debt which we paid off in 10 years. But almost all government and taxpayer support of education has been replaced by loans. Progressive programs like the National Defense Education Act are a thing of the past. The GI Bill is much reduced. So comparing the earlier days of University education and the burden of debt from then to now is like comparing apples and oranges.

  121. @Rebecca Hogan, New Mexico apparently wasn't even in the lower tier for tuition in those days. My undergrad tutition at the Univ. of Tx. at approximately the same time was $50 a semester, and I went to grad school on an NDEA fellowship during that program's final years. Results: zero debt for a fantastic education, an amazing experience, and a great start to adult life, all of which I'm forever grateful for. Even if it's not possible to get back to the level of coss and public financing on those days, It's far past time for this country to aspire to so much better than we have today.

  122. @Rebecca Hogan "Also figured into the equation was the fact that 65-75% of my education was covered by tax-payer dollars (Now the states pay 7-10% and students and their parents pay the rest)." That is the key driver of our current situation, along with the usurious interest rates. When states stopped funding their institutions, institutions looked to the students and loan programs to provide their funding. Why invest in a mind instead of a pothole. The latter is much more gratifying.

  123. The real issue with student debt has to do with the interest rates being charged. I, too, went to Yale and took on some debt, but it was back in the 70s when there were Federal student loan programs that offered interest rates that lagged behind the inflation rate. Taking on debt for the benefits of higher education was also a personal financial investment. Given that interest rates are so low, I fail to see why student loan interest rates need to be any higher than 1% at the most. Who can afford to offer such cheap loans? Well, the Federal government for starters, especially if they can see what it would mean: an affordable investment in the country's future.

  124. An easy fix for the student debt crisis would be to make these debts dischargeable in bankruptcy. That way, debt forgiveness would extend only to those who really need it.

  125. Leonhardt is completely missing the point of the free college principle. Also, he's misunderstanding the tax-progressive nature of the proposals. College ought to be free for the same reason that public elementary schools are free. Its nature as assistance (or as DL believes, a hand-out) to individuals and families is purely incidental. The beneficiary here is society at large, which gains more productive (and wealth-producing) members. Yes it's nice for the individual, but that's not core. Second, structured right, there is no benefit slanted towards the middle or upper classes. Just collect the money using our progressive tax system. Rich, poor or in the middle, we all pay for and deserve a public school education based on how much we pay in taxes every April 15th. Rich families over the course of a taxpaying lifetime pay more -- their fair share; working families pay less -- their fair share.

  126. @Ted Doolittle You must work at a university. University is basically a big scam to get taxpayer backed loan funds. Your pollyanna belief in yet more education as the solution to all ills is what has led us down this disastrous path to begin with.

  127. Two things that bother me about student loans: One, that during a period of the lowest interest rates in our history, interest rates were not automatically lowered nor could students easily obtain the same loans at more reasonable rates. You can re-finance other kinds of loans, but not student loans? I do understand that student loan consolidation is available and this combines multiple loans into one loan with a fixed interest rate based on the average of the interest rates on the loans being consolidated, but when the interest rate on each loan seems to exceed the “going rate,” that’s not much of a bargain. Why hasn’t there been any movement by Congress to lower the interest rates on student loans? Two, I admit to not well understanding the Dept. of Education’s relationship with their contracted loan servicers such as Nelnet. But, the amount of outstanding student loan debt is huge so the contracts with these collection agents must also be substantial. Unless the Dept. of Ed. Plans to go out of the student loan business, it would seem prudent to stop paying someone else to do what could be done by themselves at less cost in the long run.

  128. Where are you getting your data? I know first hand more than 15 recent graduates with over 80k debt, some more, all with families who cannot cover these costs. College debt is a drag on the economy. They aren't buying cars, starting businesses, buying homes, and postpone having children (which has a lot of impact on our future economy) and they have payments far higher than a car payment. Although I dont personally know any recent grads whose parents are super rich but simply make a sliding scale to reduce debt based on wealth. College costs are out of control and some relief would benefit all of us.

  129. The author’s figures are accurate and reflect the national average. Your 15 friends greatly exceed the national average and probably borrowed privately in addition to the Federal Student Loan program. The Federal program has a ceiling on how much can be borrowed each year, under which it is physically impossible to leave a 4 year college or university with $80,000 of student loan debt. If your friends borrowed more than what’s allowed under the Federal Student Loan program, then that means they made some bad decisions and/or went to a school they couldn’t afford. I don’t feel sorry for them. Neither should you.

  130. David, do you think we should treat lower income students as any less capable of working hard and finding jobs to pay off their student debt than children of upper middle class parents? I left university with over $50,000 of student debt. Nobody in my family offered to pay it off for me. I spent the next 20 years paying it off through hard work and saving every penny I could. Why should we treat college graduates from lower income families any differently? Let them find the same jobs and make the same sacrifices that I had to make to pay it off over a long period of time.

  131. As someone who was part of the generation that entered the job market during the Great Recession, when our elders did absolutely nothing to prevent the financial/social problems we statistically knew would befall those of us in the position we were, and as someone who is still feeling the effects of the Great Recession, I think student loan forgiveness is the least that can be done for those of us trying to clean up the mess we’ve been left.

  132. @Funn-Exact same age cohort, and couldn’t agree more. I went to Medical School and between my debt and expected salary (once residency is over) there is no way I can live a “comfortable” lifestyle until at least my forties; and this is in a low cost of living area. I am lucky compared to many of our peers. Student loan debt is weight holding our generation down from ever coming close to living like our parents did at our age.

  133. @Funn Your elders also suffered from the Great Recession, many losing jobs, homes, and retirement savings some of them were too old to ever regain before they were forced to retire by employer ageism or health issues. They do not "owe" you anything; they are not substitute parents or grandparents. I think part of the problem is younger generations feeling that because their parents or grandparents or even great-grandparents owned a home or had children by X age, that everyone else is entitled to that. We just don't have the same economy as in the 1950s and 1960s. I am a Boomer and my parents' generation is the one everyone wants to think is "normal." In fact, they grew up (and suffered financially) during the Depression and then there was World War 2, when many people were killed. The middle class had a better chance at good jobs in the 1950s, but life before that wasn't great for many people. Also, my middle-class father could not afford a home till he was 35, and my mother was older than he was. But not owning a home till your mid-30s was not considered to be a tragedy then. I started my career in the 1980s when middle-class women discovered that it now took two wage earners to support a family or even a couple. I always wanted a career outside the home, but some women did not. They just got jobs and forged ahead. I think it's best to focus on your own hard work, and continued debt payment and savings, rather than feeling cheated.

  134. I'm not sure blanket forgiveness is a great idea but there is undoubtedly some nuance to the intent that deserves serious thought. It's also amusing that getting through Yale of all places with only $22K in student, provides any kind of meaningful perspective. Also loved the hand wave about the "real" cost of tuition at public schools. Student debt is an economic depressor, unless you think it's normal for kids to have parents pushing 60 when they get their high school diplomas.

  135. How about cancelling interest on student debt, or making it equal to the Fed's benchmark interest rate? Wouldn't that be a good start? There is no need for us to use college students as milk cows.

  136. Is $50,000 a year for new grads the median or the average? Because nobody I know made anything near that after graduating from college, and we were generally decent students from pretty good schools.

  137. @ian Amen. $50K cannot be the norm. I know STEM graduates who were not offered that much with a BS. Plenty of college grads have starting pay in the mid-30s. Consider what nonprofits pay alone, and that is a very popular sector with college grads.

  138. If you borrow money, you are obliged to repay it. That is something students, and their parents, know when they take out loans.

  139. @Frances Grimble Why must "you" repay a loan? Dollars can be printed for free. It's a fiat-based money system.

  140. Great article. I agree. The student debt crisis is more complex. Throwing a lot of money at white middle to upper middle class families is not a good solution. It has as the potential of warping the whole playing field of higher education. Some very strong oversight would be need or vast amounts of money would disappear into the massive public education system. We also may ended up with a K-16 system. Is that what we want? I liked Bernie Sanders, but his education policy really worried me. Seemed like a giant give away to white folks, and had little accountability or understanding of the complexity of higher education education.

  141. @BillC-“Like a giant give away to white folks”. If you replaced white with any other race, it would be considered racist, and rightly so. Even if student loan forgiveness overwhelmingly helped white people, which I believe it wouldn’t, it still does not denigrate the concept. “White folks” are people too, with their own economic hardships and difficulties. In fact, the race with the largest sheer amount of people below the poverty line are people of European descent. Student loan forgiveness is a topic that shouldn’t be fought on racial lines. And by the way, don’t you realize minority students likely take out a large amount of student loans to pay for education?

  142. There is something terribly wrong with the current system of student loans and college tuition. However, total loan forgiveness and college for free isn't realistic. One question we need to answer is what level of education is now needed for a person to enter the workforce with the skills to make a living wage. It used to be high school. This is a complicated subject, with many possible unintended consequences. We need serious thought, discussion and debate from all sides, to come up with a good workable compromise.

  143. @Sharon What's unrealistic about loan forgiveness, why is great study required, and why is any compromise needed at all? Congress could simply direct the Federal Reserve to print dollars to pay student lenders and cancel the debts. The US Government would have more in its reserve account to fund social spending, lenders would be repaid otherwise unpayable debts, and educated millennials would have a chance to raise families. Everyone wins, and if inflation picked up Congress could just tax the dollars out of circulation.

  144. Until we can control the rising costs of education, loan forgiveness is just reseting the balance and not confronting the problem. We'd just be dealing with this problem again in another 10 years.

  145. Other first world nations invest in the education—and health—of their citizens. Why can’t we? Americans—relieved of high interest student debt and high monthly insurance premiums—would have more money to spend to booster the economy. How come billionaires get all the breaks?

  146. @Zejee How come? This is America. The United States of Grifters. In a way, it always has been. Samuel Adams warned of the oligopoly, AFTER the signing.

  147. End government involvement in return for a one time bailout. Return the loan system to the private markets however the debt to be dischargeable via bankruptcy. Not allowing bankruptcy, thus not allowing individuals to "start over again" is fundamentally un-American. The American dream to me has never been the home in suburbia but the ability to get up and start anew some where. End government involvement, you will see private markets loan to degrees more in demand. Right now that seems to be stem. Those who go into those fields and make money might then be able to afford to pay for their kids college home decide to go into the humanities and liberal arts to prepare for a life of philanthropy as they ready to inherit their parents wealth.

  148. @DavidLibraryFan "Those who go into those fields and make money might then be able to afford to pay for their kids college whom* decide" My apologies for the typo.

  149. I wrote the last tuition check for my youngest child a year ago today. He borrowed a small amount through the student loan program, but he reasonably expects to pay that off in a year or so. In effect, though, he borrowed from his family. So if the government is planning to hand out free money to lenders, I want mine too.

  150. Rather than completely free college/graduate school (which is an investment that pays off and mostly is for the middle and upper classes), eliminate private student loans. Have the Department of Education directly lend money to students for tuition and charge only 1, 2 or 3 percent interest. The problem with large student loan debt is how much money it takes to actually pay off $30k or 200k when so much goes to servicing interest on the debt. Recent graduates make student loan payments for five years and look at their principle balance and are shocked that they have barely reduced it (or it has grown), and banks are raking in money and the government guarantees the loans (and the debts are not dischargeable in bankruptcy). Cut out the banks entirely, have the fed govt lend directly at very low interest rates and most of the problems are solved for the vast majority of students. (Just like medicare for all, cutting out the private insurance companies, would be far more efficient).

  151. I don’t think we should cancel all student debt, we should prevent it from existing in the first place. It is in the interest of our society to have an educated populace and workforce. The GI Bill after World War II is estimated to have benefited the country seven times its monetary cost. We shouldn’t enslave our children to student loan vampires or prevent gifted ones from obtaining higher education. Higher education should be free to those who qualify.

  152. @gk When I went to college for my undergraduate degree, the state paid most of the college's expenses as its philosophy was that the state needed educated citizens, thus my expenses were low and I could pay for them with part time work. That was true over much of the country in those years (1950s). What happened to the legislatures in those states? Why has the education at the college level not been funded adequately to relieve the cost to the students? Is it because too much goes into administration, hack research, new buildings, etc., or is it just lack of commitment to education or both.

  153. @Harold Johnson It's a historical fact that the government and the country gets what it pays for. As a WWII veteran my GI bill paid to educate me to increase my abilities and received taxes for my extended income as a result. Much of the technological advances of the digital era are a direct result of government investment in basic research in the area. Currently the government has invested far more in enlarging its military capability than any other single area or any other country and is rewarded by having an endless series of wars throughout the world. You get what you pay for.

  154. Have the IRS collect student debt. Put the loan on a 10-15 year payment plan. Put a maximum on what fraction of a person's income will go to repaying student loans. As each payment is due, the amount that the former student can't pay should be owed to the government by the university/college. Let the institution take the risk that their degree is worth little, or that the student they admitted was unable to finish. Nobody goes bankrupt except schools selling worthless degrees. Most students still pay for their educations, which is entirely sensible for the reasons Leonhardt gives. They are the main beneficiaries of that education, they should pay for it.

  155. My kids have been fighting for years to climb into the upper middle class, and without student loans, that struggle would have been impossible because as educated as I am and erudite as I may seem, I am too physically disabled now to provide them with the resources they have needed to succeed. The return on investment to the government and to society would be enormous if their loan burdens were absolved.

  156. The upper middle class pays full tuition, subsidizing enormous discounts for students from lower wage families. I approve of those discounts and I am willing (though it's hard) to pay a lot to make my children's college experience more egalitarian and to make education a more justly distributed experience. The fact is I am in debt because I pay a sticker price which makes college a lot cheaper for other people. If their debt is forgiven and mine isn't, what that really amounts to saying is that their debt isn't really forgiven as long as I am the person who is in debt on their behalf.

  157. This issue is one that turned me off from Bernie Sanders. It's cheap rhetoric for the base and not well-thought-out. There's no need for free college for everyone and it's not affordable anyway. It should be completely means-tested. There is no reason the upper middle class should get a free ride, and certainly not the wealthy. That doesn't adjust economic inequality at all. The Democrats need to be careful not to get starry-eyed at this juncture in our politics. There is a lot of very difficult hard work ahead and keeping feet on the ground is vital. It won't take much to turn off the undecideds and working folks again, and the same ol', same ol' mix of identity-progressives and Davos "Democrats" - Goldman Sachs-cozy with affirmative action - isn't going to cut it. At all. Get real.

  158. Way to assume everyone is in your position. I have $60k in student loans I’m just now getting to the principal on and I never graduated. I’m also the sole provider for a family of five. The reason I have so much debt is because when I started attending college, the only option I had was a private university. The big state school in town offered nothing for working adults. I stopped attending two years ago because the loan balance had gotten so large it freaked me out, so I decided I wasn’t going to continue until my loans were paid off. I am blessed and have done well in technology, but those student loans prevent me from doing all sorts of things, things that would contribute to the economy and create jobs. My parents were unable to help pay for my college, so I have loans that not only covered tuition, but helped out with living expenses. I know many others in the same boat. Next time you write a piece like this, maybe ask around rather than assuming everyone should be so lucky as to only have $22k in loans and a four year degree from Yale.

  159. @Mike Why would you not qualify for debt forgiveness or partial debt forgiveness under the proposal advanced in this opinion piece? It seems to me you would have received aid given your's and your family's circumstances when you applied for college entrance.

  160. The Democrats campaigned on making healthcare affordable for all, regardless of per-existing conditions and reducing medical costs in general. That should be their priority. I agree that forgiving student debt would mostly benefit the upper middle class and even if not, should be at the lower end of the Democrat's priority list and additionally be means tested. Healthcare first, then a realignment of the tax cuts, so they benefit mostly the middle and lower classes. They will spend their tax cut, whereas the top 10% will just save it, where it will do very little for the economy.

  161. What the author does not say: Colleges are very hard! To their credit, they have kept standards up. Those who get thru have worked and studied like mad. I spent 100 hour weeks at times to get an undergrad degree. Never in my working career, NEVER, has it been that hard - with a few exceptions. There is alot of stress - lots of students get high doses of anxiety. Middle class welfare? If this was a country club - maybe then. But those who graduate have earned something - and will apply it to the country's good. Perhaps the reverse - students should get a salary. As the birth rate is 1.7 kids per woman now, the demand for workers in 10 or 20 years might transform the whole system to do just that.

  162. Thank you for this "cooler heads must prevail" reminder. DL, you've been working the education beat for a long time, I know (I own "Class Matters" and teach from it); so thanks for that final paragraph. "The right approach is a debt-forgiveness program that helps families who really need it. People whose income is below a certain threshold should have some of their debt forgiven (expanding the income-based repayment programs that already exist). And federal financial aid should expand too, with a focus on poor, working-class and truly middle-class families." My case was similar to yours: $25,000 in debt after Dartmouth and Yale, but I paid it off in accelerated fashion in only 3 years after finishing my PhD because I had a decent visiting teaching job in those years and no dependents, no car, small apartment. 25 years later still making only $60,000 but that's ok, it's social-democratic France. I'd like to see US state universities fund their systems properly through appropriate taxation -- Dems need to reconquer the idea that education -- all of it -- pre-K through to PhD is a society-wide burden and benefit, NOT simply a service bought by a customer/student. Bret Stephens nailed it: Dems must do the hard things now and not just jump at the quick fixes that grab headlines.

  163. the loan repayment on student debt is a TEN Year Standard repayment plan the student loan amounts are in addition to the Parent Plus Loans that begin interest immediately, upon disbursement, due from parent borrowers, how do you repay to eliminate capitalized interest FEES ON LOANS increasingly, UNsubsidized Student Loans less state funding for schools, more loans mean less new purchasers of homes, and perhaps effects decisions to have children for this new indebted student graduate in the next years

  164. @margaret I don't see that people waiting longer to purchase homes or have children is really a problem for the nation as a whole. Maybe people should banish expectations that by X age they must have a house or they have somehow been cheated.

  165. I am over 200k in student loan debt from undergraduate, master’s and law degrees. I make good money and have absolutely no complaints about repaying, but I’m not even paying the loans down because of the 8% interest rate! I don’t need forgiveness, but deserve and need a lower interest rate if I’m ever actually going to pay them off. All I ask for is some interest rate relief.

  166. Having started with $40k in debt and working in non-profits since graduating from Oberlin College in 2009, I have been at times enraged and at other times despondent about my debt. Leonhardt assumes that getting raises over the course of your career will make debt manageable, but it's well known that average wages have hardly increased meaningfully in years. Assuming it's true that the people who would benefit most from student debt forgiveness are upper middle class, wouldn't a reformed student debt system also make it easier for working people to begin to afford an education? Frankly, regardless of a few new firebrands in DC, most of Congress would balk at something so radical as giving away more than $1 trillion. Better to focus on meaningful legislation to rein in abuses by for-profit colleges, set limits to variable rates on student lending, and address the reasons behind the rising cost of a college education (proliferation of deans/administrators, etc.).

  167. If you look at every policy choice through the prism of progressiveness, you won't do much. Abolish college debt? Not progressive. Reduce college costs? Not progressive. Raise the gas tax? Not progressive. A carbon tax? Not progressive. A VAT? Not progressive. Heck, even having a fire department isn't progressive, because in saving property, it helps the rich more than the poor. But this is not the road to a better future. The place to put in progressiveness is where it belongs: on income taxes, and on wealth taxes (the estate tax, and the property tax). If you can't do that, it is bootless to complain about this or that policy not being progressive, because income and wealth is where the real money, and the real progressiveness, lies.

  168. Affluent students also may tend to receive more than their fair share of financial aid because they may be more adept than working class students in knowing how to apply for scholarships and also because at least some colleges may exclude from financial aid calculations the type of assets that affluent people tend to have. I was too poor to receive financial assistance during the 1970s when I attended two of the nation's most expensive private universities. I was the first person in my family to attend college, and no one told me about various academic scholarships for which I might have qualified. I also failed to qualify for financial aid even though upper middle class students often seemed to qualify. It was my understanding (although I'm not absolutely certain) that the universities did not include in financial need calculations the value of lavish family homes, family businesses, trusts, pension funds, and other kinds of assets that affluent people often have. Nearly all of my father's assets consisted of cash that he had saved as the result of assiduous thrift during a lifetime of hard work, and the universities expected him to spend that money for my education -- which he did -- even though he was 62 when I started college and retired soon afterward and depended upon his savings for income since he had virtually no pension. I hope that universities no longer skew financial aid calculations in favor of affluent students, but I would not be surprised if they did.

  169. Let me preface by stating that I was granted the opportunity to earn a PhD via attendance at publicly subsidized institutions and never needed a loan despite my very modest financial circumstances. My gratitude to the taxpayers who made this possible is beyond words. Thank you California, and thank you America! I also had the opportunity — thanks to my PhD — to teach for a number of years at an elite liberal arts college with tuition that is now above 60 grand per year, not including living expenses. My experience there was sheer pleasure, but while there I could never stop comparing the student experience to my own undergraduate days in community college and subsequent transfer to a four-year state college. And all I have to say to any aspiring student (or parent) is that if what you are seeking is education, the high priced institutions are not worth it. Not even close. Yes, they offer prestige and contacts and open doors, but they are no better and perhaps, in the case of large universities, even inferior to the average state school in terms of general education when one factors in how much graduate students are responsible for teaching rather than famous professors. Wake up America — you’re being bilked, ripped-off, Shanghai-ed, taken to the cleaners, and, yes, cheated. To echo Nancy Reagan, just say no.

  170. It is progressive. It must really frighten Brooks, and his fellow NeverTrump Republicans, to think that they might be about to get progressive policies. Brooks responds with nonsense, that progressive isn't progressive, don't look behind that curtain, the Great and Powerful Oz says it just isn't so.

  171. @Mark Thomason This column was written by Dave Leonhardt. He is a progressive and is correct in his analysis.

  172. If free college is not a good idea, then why is free high school or free elementary school? On average anyone achieving any level of education is more economically enabled than someone with less. Education benefits not just the educated individual but the nation as a whole. If someone graduates school with debts amounting to "only" 7% of their income, they are precluded from alternative use of that 7%. Examples foregone might be earlier home ownership, childbearing at a more opportune age, larger retirement investment, the ability to take a greater risk in career choice, more resources to care for aged parents. Let us not forget that a better educated population equips the entire nation to better compete in a challenging world.

  173. If I had had financial forgiveness for university expenses I would have become a “professional” student. Instead, I worked two part-time jobs, drove a used car, and had several roommates.

  174. Excellent article. Thanks for the facts, something that gets lost in the emotions often. First, I do think we should have "free" public college education like many advanced countries. However, since I don't see us willing to raise taxes to cover it I'm not holding my breath it will happen soon. 40 years ago when I graduated from college with student loans from the University of AZ, my ability to pay it back was comparable to the author's. However, I paid for my first two year's tuition and books by working full time in the summer and part time during school. Once I was accepted to the nursing program this was no longer possible. I was lucky I lived with my parents. They gave me their very old truck, as you had to have a vehicle to be accepted into the nursing program at that time. Neither of my parents had a college degree and I was one of 9 children. The loan I had was through the government which had lower interest rates than the private banks. These banks only gave loans if parents co-signed, which my parents rightly would not do. Back then you could get your loan eliminated if you choose to work in low income/high need areas of the country for a few years. I think there are many ways to help student debt, aside from forgiveness. This needs to apply to trade schools as well. I had a client with loans for culinary school for $40,000. Her parents had to co-sign the loan which she was unable to repay. The whole family, not just the student can get impacted for years.

  175. Thank you, David, for the considerable thought you have put into this massive problem. For Michael Bloomberg to pledge $1.8 billion for seed money to kick off a student loan debt-free program is monumental. LET'S assume that the program would only include the Baccalaureate and comparable programs such as Nursing. But perhaps it would include post-graduate programs leading up to Ph.D, J.D, M.D. and many more. THAT would be a truly beneficial aid. I would venture to say that the student debt for post-graduate programs can amount to at least $25,000 to $35,000 per year. This is after scholarship and similar grants of aid have lowered the gross tuition costs. I don't mean to disregard living expenses which are considerable. I just don't have the capacity to make a realistic estimate. My daughter worked to help pay her living costs since she graduated from high school. I believe most students who are middle income do the same. She was certainly from a simple middle income family, as are most of the people whom we know. The factor which I believe you have left out in your comparison of costs, and for me that period starts about 53 years ago, is that in the middle '60s costs for everything were roughly 1/10 of what they are today. The college and post-graduate student can in no way accomplish on his own or with reasonable student loans, the management of putting himself or herself through college and onward. If this country's leaders were interested in jobs, but they are not.

  176. What about all of us who paid full price in cash for college? Or intentionally attended discounted State schools in lieu of ringing up a big tuition bill? What kind of equitable recompense as students or parents do we receive?

  177. What an atrocious article. Let me be clear, years of living in Europe, as an American, have shown me without a doubt that university and colleges without a fee, treated as a public good (as with K through 12 education in the US, which of course needs massive improvements, yet has delivered on literacy, numeracy etc in the major) is essential to level the playing field. There should be no student debt associated with tuition fees, and this would greatly increase the amount of working class students capable of entering and finishing college. Additionally, direct federal funding for K through 12 education should be dramatically increased, especially in areas with low income populations. Teacher pay must be increased in those areas that are harder to attract talented teachers and preschool should become the new normal via well funded Head Start like programs for all. Creating an environment for students from working class backgrounds to thrive means looking at education from preschool to PhD, and yes making college tuition free.

  178. @Tony Cochran In Europe they ration their free college by setting high admission standards and flunking out people who can't keep up. It's not like Harvard where you pay $50,000 per year and can't get less than a "B" if you try. If we had the same system here you would be very disappointed at the number of poor and working class (especially minorities) who would actually be able to get a free PhD.

  179. I can not think of a single reason not to forgive the student debt of anyone who income lies below some level. I paid mine off decades ago but that is when student debt was so much lower. Yearly tuition costs have become so expensive in the interim. they have now become ridiculous. We need to pursue a national program of debt forgiveness so that young people can actually participate in the economy but restrict it to those who do not have financial resources to draw on.

  180. It is not a myth that liberal arts students carry impossible student loan debt... particularly those who took out loans for grad school in the fine and liberal arts. There are probably no fewer than 25,000 living recipients of creative writing MFA degrees... perhaps no fewer than 25,000 living recipients of theatre arts MFA degrees... and my guess is that they owe an average of seventy-five grand each... including their undergrad nut. Perhaps these certified writers and theatre artists were led to believe, by the schools that accepted them into grad programs, that the culture needed them... led to believe that they owed it to themselves to borrow so as to develop their talent. Do we really need over 130 MFA creative writing programs? And how many MFA's in musical theatre cannot gain work in their beloved art? So it is that we can find our surplus of student loan debt artists, half-talented poets and actors, working as impoverished adjunct junior college teachers. Worse: higher education has become administration top-heavy with bloated administrator salaries... and college maintenance workers are driven by low wages to food banks and payday loan sharks. The banks got bailed out. Apparently no bankers went to jail. Meanwhile...

  181. @Red Shuttleworth There is a Beethoven trying to write a symphony or a Herman Melville trying to find time to write a book but, as you hope, not in the US.

  182. I agree and also let’s put back the consumer protection legislation initiated in the Obama years. We should not allow federal funds to be used for bogus private colleges.

  183. All of my friends that are upper middle class have no student loans, or very little. Their parents could afford their tuition. I am lower middle class - my parents made too much to qualify for much aid but not enough to help with the majority of tuition. My husband and I pay a second mortgage every month in student loans - and we have decent paying jobs. I wouldn't say we are doing "fine". It can be a struggle some months to make ends meet. I don't agree with this article at all!

  184. @CJ You just wonderfully torpedoed the entire flippant argument of the article. A population with equal access to college makes the country stronger and cohesive. This is not rocket science.

  185. As someone from the middle class (I dont think upper) who pays $1200/month on $134,000 of student loans for a bachelor's degree, I heartily disagree. I only started paying principle this year, and I am 30 and went to MIT.

  186. My wife pays less in our home loan than I do in my student loans. My interest rate is also something like 400% higher and non-negotiable. My wife didnt go to college and so we can own a house. I cant even be on our home loan my debt is so high. It definitely has set me back by about 5 years, not to mention the 6 years it took me to get my bachelors. The only saving grace is that I went to MIT. That definitely opens doors. Even still I'm 30 years old and just started paying principle. This debt just means you have to struggle for 5-10 more years to get to where you want to be in life. I would be grateful for some help.

  187. @Jacqueline: You went to MIT, but apparently did not learn that the sum due on a loan is the ‘principal,’ not the ‘principle.’

  188. Forgiving all debts now would also be extremely unfair to those of us who paid off all, or most, of our debts already, through our own hard work and careful penny-pinching. After finally getting into the black, I'm meant to be saddled with additional taxes to support everyone else? No thanks! A better approach to complete forgiveness would be for federal funds to support lower interest rates. This is an acceptable middle ground that would help current debt holders and not punish those of us who worked and lived frugally for many years to get ourselves out of debt.

  189. @David Johnson Your objection is basically just “I suffered so others must suffer.” The whole “extra taxes for someone else’s benefit” angle is a red herring. We all pay taxes for all kinds of things that benefits others but not us. Comes with the territory of being taxpayer.

  190. @David Johnson And here lies a problem... "but I had to do it, so why don't they?" You are not being punished if someone else doesn't have the same debt you had for the same thing at a different time... If we took this attitude about progress, nothing would ever progress.

  191. @David Johnson I hope you had the same reaction when Republicans gave tax cuts to the wealthiest.

  192. "Most graduates of four-year colleges, by contrast, are doing just fine." Everyone who benefits owes something. Graduates aren't the sole beneficiaries of their investment in education anymore than car manufacturers are the sole beneficiary of theirs. The issue with Student Loans is that the lenders are making out like bandits and they aren't providing a balanced service for what they charge. Simple solution: calculate the sum of student debt and the sum of the cost of a four year degree in all colleges, trade schools, and universities in the land. Education contributes to the GNP and therefore ought to be shared, as a cost, among the nation's beneficiaries, the same way the military is. Of course, military is a defensive/destructive force and education is constructive and attacks limits imposed by ignorance, but since everybody benefits from both the destructive and constructive aims of education and military, everybody ought to be paying. The risk of making the military a pay-as-you-go kind of thing is unimaginable. Why, in a democracy, when knowledge and critical thinking are our only defense against tyranny, why is education so devalued to the point that it's a thing to be bought and paid for by the bourgeoisie? If students have to pay tuition, room & board, and textbooks, then so ought those who join the military. Both groups provide a valuable service and the taxpayers should not be taking the goods they provide without paying for them.

  193. How about we compromise and eliminate the impact student loan debt can have on one's credit and ability to get a mortgage or business loan? At the very least, interest rates should be capped, repayments should be capped at no more than 5% of one's take home pay, and the student loans can't affect you ability to get a home loan or otherwise continue life as regularly scheduled? This would be the best of both worlds and make everyone happy.

  194. Too much of the policy discussion in this area is focused on how much students pay, and not on how much universities are charging. The cost of a college education has soared at 3-4% higher than inflation for decades now, with no justification for the increases. Much of the money goes not into a better education, but into either a better lifestyle for students (I did NOT have a sushi chef my my cafeteria at RPI back in 1986) and to increasing the size and cost of administration. The fact that students are willing to pay a quarter of a million dollars for 4 years at an elite university simply shows that they don't understand cost/benefit. Spend half that at a good state school with an honors college, come away with little or no debt and with lots of freedom.

  195. Simple solution: parents and students with incomes over $100,000 a year should not be eligible for any from of government loan repayment. The same should be true for private religious and charter schools pre-college. Universal free college is a bernie idea. If the establishment Dems listen to them, Trump's people will have a field day for the next two years and then sweep them out of office.

  196. I am in my third year of a PhD program (in a in-demand field) at a very prestigious university. I come from a working poor family in a rural part of the country. When I turned sixteen, I began working 30 hours a week outside of school to help meet expenses. My parents told me from the time I was in kindergarten that they could not help me pay for college. I knew my ticket out was my grades. So, apart from working nearly full time, all of my available resources went to studying. Sports, socializing, taking vacations, etc., all got cut. I graduated near the top of my class in my undergraduate program. I received need-based financial aid along the way. But the majority of my school fees had to come from student loans. Same with my Master's degree. And now the same with my doctorate. I have $209,000.00 in student loan debt. Spare me your criticism. Why is it okay to borrow $300k to buy a house, which doesn't always pay off; yet, it's "financially irresponsible" to invest in yourself and your society via an advanced education? Guess what, folks? This is what it costs now to get to this level. Dozens of my friends who are doctors, lawyers, engineers, scientists, etc., - they are all at around $200k to about $400k in student loan debt. I have a LOT of company. I took on this debt largely because I wanted to apply my talents toward the more vulnerable parts of society. But I have paid, and will continue to pay for the rest of my life, such a devastating price for this.

  197. That was your decision. Not mine. Why would you ask me to pay for it? Your house example is a terrible one. Investing $300k in a house only makes sense because there is a market that establishes a value. If you default, the bank takes the house and gets paid back. If you are taking out hundreds of thousands of dollars to go to school for 8-10 years to then do social work and you can't pay back your loans, then you invested amounts that were in excess of their market value. Bad decision. But it was yours.

  198. @Josa When I was in grad school, a classmate from eastern Europe (not sure which country exactly), sniped that Americans don't study science because we're too lazy. I told her no, Americans can do science. But in our education system, the state does not subsidize your PhD in STEM, you have to pay for it yourself, and then face trying to pay back the loans on postdoc salaries. So those with real gifts in math often choose MBAs and go into writing algorithms for finance, which is far more lucrative. Our system actually discourages people from going into useful, productive careers. It's sad, and it's why most of the scientists are now coming from India, China, and eastern Europe.

  199. @Josa Could I ask if your student loan debt is from your undergraduate education? Unless, I am seriously out of date, a Ph.D. program should be (financially) supporting any student it admits.

  200. The simple and obvious solution is to pay for universal free college with higher taxes on high incomes. Affluent people and families will benefit, and they will also pay. We literally did this fifty years ago. It isn't that complicated.

  201. @GMB It is easy for you to say that if you are not one of those people you think have the income that you want taxed so there is Universal free education.

  202. I am sorry, but I disagree. I have an MA from an Ivy League school. My student loans accumulated interest from the moment I started my degree, so I graduated with $105,000 in debt. At 28, I am making $55,000 a year. All my money past expenses, all of it, goes to this loan. If I wanted to do the minimum payment, that would be over $1,100 per month, but to reduce the amount I pay in interest, I have already paid $7,000 since beginning my job in August. So-- don't imagine I'll have children or a house or retirement savings; don't imagine that your burden is similar to the exploding bubble of the past years; and don't imagine the well-educated can keep up with this kind of debt. What will happen instead is what is seen during the first moments of that uncomfortably prescient film, Idiocracy.

  203. @Madeline -- I hear you. A big part of your problem is that you are living in New York. That 55 k$ doesn't go far here. it would go a lot farther elsewhere, but then maybe you could not get a job, or it would pay considerably less. Paying of that loan at over 2 k$/month is admirable though. If you keep it up you'll have it completely paid off in about 5 years.

  204. @Madeline Borrow over 100k to make 55k? You chose the wrong school. Yes, I know, attending an Ivy league school ( but not Harvard or you would have mentioned it) is tempting but you should have resisted the temptation.

  205. I suppose that going to a prestigious school like Harvard, Yale or Princeton might on occasion be worth it regardless of the cost or amount of debt incurred, but I myself have always had a positive distaste for debt in all its forms, and except for a few house mortgages have always stayed away from it. A debt free life provides you with an opportunity to save and accumulate money and money provides you with the freedom to pursue one's real interests whatever they may be, which in the long run is likely to be a much better deal than attending Harvard, Yale or Princeton. There are plenty of very good state universities around that provide excellent educations at reasonable costs.. My advice to young people is go to one of them and avoid schools, expensive cars and all other purchases that saddle you with unnecessary debt.

  206. There are literally hundreds of principles at stake here. The main one, though, is that you borrowed the money. You pay it back. There are tons of reasons to lower the interest rate and to lengthen the period in which the loan is paid back, but there is no justifiable reason for forgiving the debt, outright. I am sure it would benefit the wealthy more than the average or poor person. After all, they went to the more expensive schools, and pursued the more expensive curriculums, largely because they "believed" they had the money to do so, and because they did, institutions probably selected them over those that could not afford to pay the freight. The time to think about a career and college financing is before you enter college. The fact you have to make changes along the way is part of the experience. They chose poorly, did not adjust and will limp along the rest of their life as a result. They are not the only ones suffering from the Great Recession. It would be laughable to think that the banks will just forgive $1.5 trillion dollars in debt, and for the tax payer, who might have paid already for his own education, to be asked to pay for the education of others in this predicament is equally laughable. The fact that there are 20 Democrats, who think it is a great idea to forgive the debt, one way or the other, is truly scary. That would be as irresponsible as the Republicans giving a tax cut to the wealthy and creating a $1.5 trillion dollar debt, as they did.

  207. @Reuben Ryder Why is it laughable to expect banks to forgive student debt, after we the taxpayers bailed them out by the government's buying mortgage-backed securities after the 2008 crash? I thought then and still think now that a far better way for the government to rescue the economy would have been to give every adult taxpayer $100,000 to spend as they would. Many would have used it to catch up on their underwater mortgages. Others would have paid down student loan or credit card debt. Those not under crushing debt burdens (like me at the time) would have bought cars, put down payments on a home, paid for their own education or needed healthcare, etc. The economy would have recovered quickly as a result. But no, bailing out the little guy is a no-no, bailing out the bankers who donate to political campaigns was far more important.

  208. The problem should is not in accumulating debt but rather in avoiding it. When loans are universally available at below market rates, individuals who have no reasonable chance of graduating or who have no intention of graduating are being granted loans and other subsidies. Bursars should meet with registrars and program consultants to determine whether it reasonable for EACH student to receive aid.

  209. @Dr. Sam Rosenblum Bursars don't make that decision about aid, they just collect payments. Financial Aid office doesn't even determine who gets aid if the student is in good standing. What are you even talking about?

  210. I went to a top college and received financial aid and had loans. This was some decades ago. Like David L I resented paying the loans at times, but eventually managed to pay them off. So I do believe that students with financial aid should have some skin in the game. However the way the deck is stacked now is abusive. Loans begin accruing interest from the moment they are taken out; then go into repayment almost immediately upon graduation. When I graduated repayment began nine months after graduation, which was enough for most students to get grounded, and interest didn't start accruing until that point. And don't get me started with the other tricks of student loan companies

  211. I respectfully disagree with you sir. From what I observe, the upper middle class is the most productive segment of this country and wiping out college debt will benefit our society far more than the tax cuts for the 1% and the public money doled out to superrich Amazon for HQ2. I have a better idea, transfer the entire debt to the 1% through higher taxes.

  212. I was the beneficiary of loan programs in the 1960s and partly due to them moved from a blue collar background to the upper middle class. Paid them all off. Of course I didn't have Starbucks to eat up dollars, and I drove used cars, deferred my family and belonged to no country clubs order to meet my obligation. Those with degrees/certificates need to repay their loans. Those who for whatever reason fail to graduate should receive some consideration. Perhaps waiving interest and requiring only repayment of principal? If there is a moral hazard in not requiring repayment, it is in building a society with no ability to flex.

  213. @JPE College also cost $75 a year in the 60s. Tell me how that worked again?

  214. Why not cancel all the debts of people who didn't go to college? It's just unfair to pay somebody's personal choice by tax money of people who didn't go to college. They get more in return for what they paid to go to college.

  215. My son finished school in 2015 with 30K in debt, all of which has been repaid through him, his dad and me. We began saving for his college since before he was 2. We are in the low-to-mid portion of middle class, yet we forewent certain material things, lived in a house many would consider too small and kept our medium value cars for an average of 7 years each. So, if all this student debt is forgiven for others, will we be reimbursed? Just wondering.

  216. @Louisa If everyone did what you did the economy would stall. You don't need to be reimbursed because of the choice you made to sacrifice and pay it back.

  217. @Stephanie Wood -- this story is relevant how? I hope you do realize that the vast majority of Americans are not so fortunate as to get "less than $200,000 in cash, $10,000 a year in dividends, and I got a tumbledown, worthless, flipper house?"

  218. Why do we even use this convoluted system of government-subsidized loans and pseudo-scholarships, anyway? Just make higher education a public service like it should be, and cut out the middleman. Like we mandated health insurance instead of just providing health care.

  219. Yes, young people frequently have a mixture of (1) susceptibility to pie-in-the-sky solutions to social/economic/political problems,(2) passionate belief in their convictions, and (3) inability or unwillingness to acknowledge that some of the convictions (erase student debt, free housing and health care, higher taxes on the rich) -- while sounding idealistic and charitable - are born of self-interest. They also don't realize that in 20 or 30 years they will be the fat cats who own the wealth and property, and the younger generation will be decrying them.

  220. @Dr. Reality Are you serious? Do you forget that it was probably your generation that told us all to go to college and just a degree in anything, it didn't matter what, because the jobs and money would follow? It was your generation that got nearly free tuition then closed the door behind you and made us pay 3 times as much. Us "young people" did nothing more than what we were told by our older and wiser parents and school administrators. You leave us with the bill of goods then tell us it's our fault that it isn't working out. What a bunch of hypocrites.

  221. "But this country has too many big problems to start showering the upper-middle-class with enormous government benefits." The main "big problem" is that we have just showered the upper 1% with a truly gigantic government benefit. As another reader commented, the student loan system places hundreds of thousands in virtual perpetual indentured servitude. "I owe my soul to the company store".

  222. Forgiving student debt is not so much a bailout of the upper middle class as a bailout of the thousands of marginal US colleges with mis-priced product due to a distorted marketplace. One does have to wonder what the value of certain degrees is when there is no way to repay their artificial cost. The hard truth is that all college degrees are of equivalent value, to the individual or to society.

  223. The writer has swallowed whole the arguments from the right that generally go like this: if we spend government funds on such and such, it really won't help the poor. Well get this - the poor have aid programs for them. It is the white middle class who left the Democratic Party because it does little for them. Tax cuts help the well to do, so do tax privileged savings accounts for college and for medical expenses. So the Democrats can help the struggling middle class too. That would be reasonable.

  224. Eliminating won't happen. Giving monetary to the rich is one thing; helping students is another. Big banks give money to politicians, some of the money made from student loans. Student loan borrowers don't give money to politicians, nor do they vote in proportion to their numbers. Mortgaging a home is tax deductible, but mortgaging your future and future ability to pay for one is not. Therein lies the trick; how to better manage a payment schedule, perhaps according to earnings. The rich who have just been handed a tax break so big that no college borrowing will ever be necessary, the diminishing middle class needs a modicum of similar help in managing school debt. One last thing; while the congress is driven to reduce the flood of regulations for business, reduce the flood of regulations required of colleges. They also cost money, which means more debt. Colleges have too much bureaucracy, too man administrators, and too few full time faculty, the one group students are actually in need of.