We are all aware of rising student debt, which now exceeds $1.6 trillion in the United States, dwarfing credit card debt ($930 billion). Although student loan totals have been growing for decades, only recently has their human toll been widely discussed, leading to calls to forgive debts and make some college tuition-free.
“Student debt has shaped how Americans live, work, and form relationships,” writes Josh Mitchell in his new book, The Debt Trap. Young people are delaying home ownership, putting off marriage, avoiding starting businesses, and failing to save for retirement, he says—all because they are trying to pay off their student loans.
Mitchell is a Wall Street Journal reporter. The book’s subtitle is “How Student Loans Became a National Catastrophe,” and Mitchell’s job is to tell the complicated story. Federal guarantees of student loans began in 1965, when the Higher Education Act was passed with the enthusiastic endorsement of President Lyndon B. Johnson.
It is a grim story and in many ways familiar: a long, slow process by which politicians, government bureaucrats, and private businesses pursued their narrow interests while failing to acknowledge the logic and warnings that foretold disaster. Supporting it all was the public, ignorant of the details but eager to send their children to college.
In fact, the “debt trap” is a classic “Bootleggers and Baptists” story.
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