But people who borrow money to pay for their education can’t simply walk away without paying, unlike with mortgages, car loans or credit cards; there is no equivalent of foreclosure, and student loan debts aren’t cleared by bankruptcy.
That may all be great from a lender’s point of view. But there’s a growing body of evidence that rising levels of student loan debt are restraining the ability of young adults to enter the “grown-up” economy — to buy a car and to buy a home and start filling it with big stuff.
While the overall level of student debt may not measure up to that of mortgages — $8.2 trillion — it is highly concentrated among a small slice of people — those in their 20s and 30s — who are the engines of a great deal of economic activity. One of the crucial reasons the housing market has not expanded enough to support robust economic growth is that young adults are not setting up their own households at anywhere near the historical norm.
This seems obvious to anybody who can do basic math, which is probably why so many progressives would find it shocking. After all, nothing but good can come from a college diploma (note that I carefully did not say a college education), even if you saddle yourself with a lifetime load of debt that will preclude you from entering the economy in the normal way previous generations took for granted.
It is an article of progressive dogma that everybody is equal in talent and ability, and any difference in outcomes is caused only by some malign intervention from the “privileged” such as racism, sexism, or another form of exploitation, and therefore all we need to do is give the “underprivileged” the trappings of privilege – like houses and college diplomas.
And like all such fantasies, this notion eventually crashes on the deadly shoals of reality. Selling kids intellectually incapable of making use of a real college education worthless diplomas for very high prices produces ruined lives and little more. Selling people homes via trick mortgages that explode, and blow those folks into penury, doesn’t produce a middle class life of “privilege,” but a life of hand-to-mouth permanent renters who contribute much less to the economy and their own lives than they might otherwise have done.
So, yes, while these notions are always pushed as helping the economy, in the end they far too often not only don’t help the economy, they ruin the lives of the very people they are intended to help.
Progressives will do almost anything to avoid these hard truths though, even as they sift through the rubble of their own creation for the occasionally sparking pocket of unicorn gas.
Check out my new bestseller, Lightning Fall: A Novel of Disaster. Glenn Reynolds at Instapundit.com says: “Bill Quick has authored a terrific thriller that is also an all too plausible warning. Highly recommended!” Available in Kindle e-book or trade paperback formats.