There but for the grace of God go I: Back in January, the Urban Institute—a widely respected Washington think tank—published a statistic about student debt that pretty soon caught fire among economics journalists. Based on an analysis of federal data, its researchers concluded that 49 percent of all outstanding education loans belonged to highest-earning quarter of American households. In other...
It shouldn’t be so easy to go to grad school
There is a limit, of course, to how sorry we should feel for people who borrowed lots of money for a graduate degree, and found that it wasn’t a surefire ticket to easy prosperity. I am sympathetic to those people; indeed, I am one of those people. But people with graduate degrees, even not-very-useful-ones, are more affluent, more educated and more skilled than the general population. We should...
An unsettling graph about student loan debt
Student has $328,000 in student loan debt!
And no, there is no moral hazard with the federal loan forgiveness program: He graduated from Ohio State’s law school in 2010—a particularly tough year for Ohio law grads, according to a study by a law professor at the school, Deborah Jones Merritt. And he had $328,000 in student debt, according to the New York Times. TaxProf Blog noted the story. Times were good when Shirkey began law school...
Student loan problem is worse than we think
Nearly one in three Americans who are now having to pay down their student debt–or a staggering 31.5%–are at least a month behind on their payments, new research from the Federal Reserve Bank of St. Louis suggests. That figure is far higher than official delinquency measures reported by the Education Department and the New York Fed. And it’s also likely the most...
Why the feds should get out of the student loan business
As we move into the twenty-first century, the commodities we want to produce are becoming less “Smithian”. More education–and I do not think anyone in the U.S. is happy with the decisions twenty-year olds are currently making about how much education they should get and how to finance the debt incurred. Deciding to fund education via long-term loan-finance and to leave societal...
One-third of people with student loans are delinquent
Yikes! About one-third of borrowers with federal student loans owned by the U.S. Department of Education are late on their payments, according to new federal data. The figures, released by the Education Department on Thursday, are the first comprehensive look at the delinquency plaguing those who hold federal student loans. By the new metric, which the department has never used before, roughly 33...
Repay as you earn loan programs are not looking good
According to Politico: In obscure data tables buried deep in its 2016 budget proposal, the Obama administration revealed this week that its student loan program had a $21.8 billion shortfall last year, apparently the largest ever recorded for any government credit program. The main cause of the shortfall was President Barack Obama’s recent efforts to provide relief for borrowers drowning in...
The importance of financial resources for student loan repayment: evidence from Canada
Government student loan programs must balance the need to enforce repayment among borrowers who can afford to make their payments with some form of forgiveness or repayment assistance for those who cannot. Using unique survey and administrative data from the Canada Student Loan Program, we show that nearly all recent borrowers with annual incomes above $40,000 make their standard loan payments...
There is no student loan problem
Don Heller nails it in this Washington Post op-ed, my favorite quote:
It is not uncommon to read stories about college students who say, “I woke up one day and realized I had $50,000 in outstanding student loans and had no idea how I got there.” And yet nobody would accept at face value someone stating, “I woke up one day driving a Mercedes and had no idea how I was $50,000 in debt.”