Crisis in student loans

Educational debt should not continue for decades

Here is a statistic that will turn a student’s hair gray: Americans 60 and older still owe about $36 billion in student loans, and some of them are struggling to pay, according to TheWashington Post. Consumer advocates say it is not uncommon for student-loan lenders to garnish Social Security checks.

The conclusion from high-delinquency rates in every age range: “The long-touted benefits of a college degree are being diluted by rising tuition rates and the longevity of debt.” Not all of that debt was incurred for undergraduate degrees completed when the borrower was 22. Many people go back to school to keep up with a changing industry, to prepare for a job in a different field as the world changes around them, or even to qualify for something they have always wanted to do. Perhaps not all of them made wise choices, although it is fair to say that many of them probably did the best they could with the options they had.

In addition, some of those older borrowers took out their loans as parents or cosigners, not as students. The desire to provide a better future for a loved one is a powerful motivator, but many of them no doubt now wish they had kept their own credit unencumbered.

The problem is manifold. College is more expensive than ever, and some say its costs in many cases outweigh its benefits in terms of increased earning potential. Degree programs vary in cost, but at most universities, social–work students and education majors do not pay substantially less than future engineers. Unemployment rates and lower wages have meant that loans are difficult to pay off. Smaller payments mean longer terms.

Because most student-loan debt cannot be discharged by bankruptcy, let alone by advanced age, some former students can be saddled with debt their whole lives. Changing that is an attractive option that would, in the end, only eliminate some borrowers, including those aiming for second careers, from the loan pool.

Still, there is something wrong when debt collectors are harassing students in their 80s for loans made decades ago. An education should not take decades to pay off.

It is easy for critics to say, “If you can’t afford college, don’t go.” Someone has to go; the U.S. economy depends in part on a well-educated workforce: scientists, health-care providers, educators, etc.

As domestic manufacturing continues to shrink, post-secondary education remains one of the best drivers of upward mobility. If only those who are already prosperous can afford to go to college, the gap between economic classes will widen into a gulf.

The standard answers to this dilemma fail to fully address it. Yes, there are other ways to prepare for a career, and good careers that do not require a degree. Yes, there are ways other than borrowing to finance an education.

Yes, students should be counseled more thoroughly before they take on loans, which too often are used to finance college lifestyles rather than educations. Yes, parents, too, could make different financial choices. And finally, yes, some people are simply deadbeats.

Many are not. Despite careful planning, many simply cannot repay the loans they took out with such optimism. The world has changed around them.

Those borrowers are likely to steer their children and grandchildren away from higher education, believing it is no longer a good option for the working class.

That is too bad both for individuals and for the nation, which needs to find different ways to fund, and to value, higher education.