The student loan crisis is media and political hype, argues Sandy Baum, a senior fellow at the Urban Institute and author of Student Debt: Rhetoric and Realities of Higher Education.
The 23-year-old graduate with heavy debt and a job at Starbucks is “rare,” Baum tells Claudio Sanchez at NPR. Most people who earn bachelor’s degrees will do fine.
But many go to college, borrow and leave with a low-value credential or no degree at all. “They tend to be older. They tend to come from disadvantaged, middle-income families and they’re struggling,” says Baum. But “not because they owe a lot of money.”
Flunking out of college doesn’t raise earnings. Many defaulters didn’t borrow very much, but they can’t handle the payments.
Baum’s book calls “free college” and “debt-free college” proposals “simplistic.”
It’s not realistic to say we’re going to pay people to go to college [for free]. Someone has to pay. We can have everyone pay much higher taxes. But short of that, it’s not clear how we would pay.
. . . Some schools don’t serve students well. Some students aren’t prepared to succeed no matter where they go to college. We just tell everybody: “Go to college. Borrow the money. It will be fine.”
We don’t give people very much advice and guidance about where … when to go to college, how to pay for it, what to study.
There’s plenty to worry about, Baum says.
. . . we should worry about the single mother of two, going back to school in her late 20s to try to get some training to help her get a job and support her children. We need to worry about supporting her and directing her in a way that will allow her to succeed. . . . We should worry a lot less about 18-year-olds going off to college and borrowing $20,000, $25,000, for a bachelor’s degree.
Student loan debt now totals $1.3 trillion. About half of that is held by 25 percent of graduates. Most borrowed for medical, law or business school, which means they’re high earners, says Baum.