The Surprising New Effort to Tackle the Student-Debt Crisis
The discussion over the student-loan crisis has become much more sophisticated of late. Instead of sneering coverage of people with expensive basket-weaving degrees, or anomic millennials too entitled and disaffected to get a job and pay off their debts, there’s increasing focus on places where student loans are genuinely an emergency. Predatory for-profit schools have left people far in debt with worthless degrees, while students who didn’t graduate are hit with a double whammy of carrying debts without an income boost from a college degree to show for it.
We know this is a crisis because we can measure it. We can see delinquencies using data from the Treasury Department. We can see where people have far too high debt-to-income ratios from academic surveys of incomes or from for-profit credit reporting agencies; they are concentrated in poor areas. And we can see the way for-profit schools implode like a fly-by-night racket the moment they encounter any formal accountability measure for their practices and actions. This all tells a story of a student-loan crisis that’s real, but one that’s limited to the world in which the system didn’t work for students.
While these arguments are being led by academics and activists, there’s another group of interested parties: Professional business groups, representing members of their occupation, are also telling a story about student loans. Their worry is that even when things work out for young people, and they graduate from a good school and get a job, their life stories are still significantly altered as a result. Student debt has serious consequences for the type of work people can do, and how they can do it, as well as their transitions between the stages of life, from building a family to retiring. These are stories that are much harder to pick up in the data, but business interests see them every day. Student loans have grown faster and more pervasive than our ability to measure them, and there’s concern that these changes are happening in ways we aren’t seeing until it’s too late.
Student loans are a barrier to the highest-level professional work, and the business groups representing those careers are reacting. This is obvious with one of the most debt-intensive graduate degrees, a medical degree. Doctors’ groups are worried student loans are now a major barrier to becoming a doctor. For instance, the American Medical Association recently wrote in a statement that high student debt can “dissuade students from attending medical school altogether, especially students from diverse ethnic and socioeconomic backgrounds. According to surveys of the [Association of American Medical Colleges], under-represented minorities cited cost of attendance as the top deterrent to applying to medical school.”