What Student Loan ‘Crisis’?
We reported on student loan debt in a pair of stories earlier this year: “The State Of Student Loans: More Debt, More Defaults, More Problems” and “Student Loan Debt: To Pay or Not to Pay?“
Paul Solman frequently answers questions from the NewsHour audience on business and economic news on his Making Sen$e page. Here is Monday’s query:
Name: Bob Fults
Question: I saw your piece on student loans. One trillion owed by 37 million? That’s an average of $30,000 per student. That’s not a crisis. It’s a car. Buy a used car. Put your SUV payment against your loan and you’re out in five years. Why are you people making this look like more than it is?
Paul Solman: Partly because we in the media like to dramatize things to make them seem important and get your attention. To slightly paraphrase the noted author Richard Rosen: What’s the first job of a TV reporter? Answer: To keep the viewer watching. But are we really “making this look like more than it is”? We put out a request for student loan laments and received hundreds of them. We were set to interview one of the most traumatic of them — a seventy-something woman still staggered by debt — but after checking with her daughter, similarly saddled, she said she just couldn’t tell her story on camera and please, not even to give the details here. The plain fact is: Student loan debt is actually a crushing burden for many, especially in the current jobless maybe-it-is/maybe-it-isn’t recovery. And there’s no doubt in my mind, given all the people I’ve interviewed and studies I’ve seen, that the debt overhang is dampening consumer spending.
Look, an average is just a statistic. If the average is $30,000, there’s likely a person who owes $45,000 for every ex-student who owes $15,000; $59,000 for everyone who owes $1,000. We’re talking 37 million Americans in total. The media’s penchant for drama should not obscure the fact that millions of them are struggling with student debt. In fact, it wouldn’t be a story without them.
As usual, look for a second post early this afternoon. But please don’t blame us if events or technology make that impossible. Meanwhile, let it be known that this entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions.