“Canceling” student debt has become a top priority for progressive Democrats. Key to their argument for having taxpayers financially absorb the $1.6+ trillion in federally-held student debt is the notion, much parroted by the mainstream media, that we’re currently amid a student debt crisis.
But this isn’t actually true. Student debt is not actually a “crisis.” Sure, $1.6 trillion is a lot of money. Yet as the Cato Institute’s Neal McCluskey reports in a new analysis, it’s entirely manageable when viewed in the context of more than 43 million borrowers.
Here are some pesky facts from McCluskey’s analysis that you’ll rarely see acknowledged in mainstream media coverage or progressive rhetoric on this issue.
- The average bachelor’s degree debt at graduation is still just $15,600.
- People with a bachelor’s degree still earn $1.2 million more over a lifetime than those with only a high school education.
- The average starting salary for a graduate with a bachelor’s degree is $55,260.
- The average monthly payment for a graduate under typical conditions is just $287.54.
- On average, repayment costs only consume about 6.2% of a graduate’s annual salary.
That’s right: The average borrower owes a few hundred bucks a month and it’s less than 10% of their annual salary… in exchange for an investment that increases their lifetime earnings by over a million.
What’s so horrible about that, exactly?
Sure, you’ll have little trouble finding an anecdote here or there of some sympathetic individuals who can’t afford to pay their loans. But they are the exception, not the rule, and their cases cannot be used to justify the widespread “cancellation” of all student loans.
Yes, college is way too expensive, largely because of dysfunctional government policies and subsidies. And no one denies the fact that student debt is a problem. But it’s simply not a “crisis” in any meaningful sense, and the misleading attempt to push a narrative otherwise may have nefarious motivations.
“We can never know motives for certain, and they no doubt vary from person to person,” McCluskey told BASEDPolitics. “But to get change in politics it is often necessary to frame problems as far worse than they are—a ‘crisis.’”
“There are also very legitimate concerns about the adverse effects of federal student aid that have made getting a degree more expensive and more necessary,” the education expert added. “Subsidies to students have enabled colleges to raise their prices at very fast clips and have made degrees more common and, hence, more often demanded by employers, even as the knowledge and skills signified by the average degree have declined.”
“That said, the data show most borrowers will be able to pretty comfortably pay off their loans,” McCluskey concluded.
Podcast: Canceling Student Debt with Neal McCluskey https://t.co/MH2d2IV9ZP
— Neal McCluskey (@NealMcCluskey) June 3, 2022