All Commentary
Monday, April 30, 2012

Trying to Shed Student Debt

“‘It’s enslaving,’ Ms. Reynolds-Rogers says of her student debt. ‘At a time I should be looking at the possibility of retirement sometime in the near future, I’m taking on another career if I’m lucky.’

Stories like hers have prompted Sen. Dick Durbin (D., Ill.) to introduce legislation to make it easier for borrowers to shed debt issued by private lenders, and not backed by the government, through the bankruptcy process.

The federal government now provides the bulk of student loans.Federal loans accounted for more than 90% of all student borrowing in the 2010-2011 academic year, according to the College Board. Nonfederal loans—including those issued by states, banks and credit unions—accounted for 7%. The government expanded its lending after the financial crisis drove up student borrowing costs.” (Wall Street Journal)

Intervention begets intervention begets intervention. But let’s just blame private lenders.

FEE Timely Classic

Why on Earth Do We Have a Student Loan Crisis?” by George C. Leef