The Miseducation Of America

Student loan programs have vastly expanded the ranks of college graduates. That’s a problem

- Bryan Caplan

TOTAL U.S. STUDENT DEBT NOW stands at $1.5 trillion. Without the support of the federal government, most of this debt would never have been possible. Even so-called unsubsidized student loans are, in fact, heavily subsidized, compared with, say, credit card debt. Yet, strangely, almost no one argues that America has gotten its money’s worth. Our student loan programs’ main payoff is complaints.

Parents, students and activists fret that this crushing debt has to be repaid. Student loan programs have saddled a generation of young people with onerous financial obligations—commitments that prevent them from starting a family or moving out of their parents’ basement. Wouldn’t it be better if college were affordable for everyone?

Yet many of these same critics also blame student loans for “sending too many kids to college.” Lots of academically weak students, the thinking goes, use cheap credit to gamble on their future. While this occasionally pans out, weaker students usually fail. One major study found that more than half of high school grads with below average math scores now start college, but less than a quarter who do so actually cross the finish line. And when weaker students manage to graduate, they rarely have the prestigious majors and high grades required to get the lucrative jobs they need to repay their loans. Isn’t it perverse to dangle cheap credit in front of naïve young people and expect them to choose well?