Economists Offer Unconventional Wisdom on Student-Loan 'Crisis'

"Student debt is a crisis, holding back the economy and hobbling a generation. Wonder why today's young adults aren't getting married, having children, buying homes, starting businesses, saving the world? Look no further, the culprit is obvious. That's the conventional wisdom, and it's taken for granted in many news articles and plenty of policy prescriptions.That narrative, however, is misguided, according to two new books," The Chronicle of Higher Education reports

"What’s worse, they argue, the crisis talk precludes a closer examination of the student-loan system’s real problems and hinders efforts to help the borrowers who are struggling the most. To push back on that understanding of debt, the books offer data, evidence, context. But will any of that change people’s minds? After all, the assumption that the country is in a student-debt crisis is everywhere.

The books, Student Debt: Rhetoric and Realities of Higher Education Financing (Palgrave Macmillan, 2016), by Sandy Baum, and Game of Loans: The Rhetoric and Reality of Student Debt (Princeton University Press, 2016), by Beth Akers and Matthew M. Chingos, make complementary arguments — as one might guess from the similar subtitles. (In fact, the authors know each other. Ms. Baum and Mr. Chingos are now colleagues at the Urban Institute, though they weren’t aware of their similarly themed book projects until last summer, when he was starting there.)

... The authors turn to what the data show: what’s happening nationally, on average, and over time. They 'tell a very compelling story, steeped in data,' said Justin Draeger, president of the National Association of Student Financial Aid Administrators, who has read Ms. Baum’s book and is familiar with Ms. Akers and Mr. Chingos’s earlier work on the subject.

There’s just one problem. People connect with — they remember — anecdotes. That’s as true of policy makers as it is of the rest of us, Mr. Draeger said. The fresh-faced English-major-turned-barista who’s $80,000 in debt is memorable. The data? Not so much. The nonfiction books that persuade readers make a big effort to entertain them, Mr. Draeger said. The student-debt books aren’t aimed at academics, but still, no one would accuse them of being what Mr. Draeger calls 'infotainment.'"

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

 

Publication Date: 9/27/2016

View Desktop Version