Today’s piece by David Leonhardt in the New York Times’ Upshot pulls apart the recent framing of the student-debt disaster story that dominates the national narrative on college borrowing costs. We agree. (Well, I guess, just me.) In fact, I wrote a similar story back in the spring, saying that the US student debt story isn’t as scary as everybody thinks.
People hate hearing this. At the Awl, Choire Sicha attempted a takedown of the Leonhardt piece, in which he wields the always-effective rhetorical strategy of analysis by italics. (“Doesn’t that sound like a fact? Well, it’s something that might be a fact.”)
No, really: It’s a fact.
Excessively high student debt loads are relatively rare. Despite all the eye-popping figures you hear about, the median—that’s the 50th percentile—debt load for all students receiving a bachelor’s degree in 2012 was $16,900. That’s according to an analysis (pdf) of the quadrennial National Postsecondary Student Aid Study, which samples data on 95,000 students. Now, it is true that debt associated with a four-year degree is much higher than it used to be. (Bachelor’s degree earners in 2008 had 44% less debt than they do now.)
But other research conducted by the Federal Reserve Bank of New York says that about 40% of the 39 million student borrowers have debt loads of just $10,000 or less. Those numbers are based on a random sample of more than 40 million credit reports, made as part of the Federal Reserve Bank of New York’s Consumer Credit Panel.
So is everything fine? No. That’s not what Leonhardt says. That’s not what I said. Rising student debt is definitely a problem. But the bigger issue is that it’s more of a problem for those who take on debt without getting a diploma. That’s where it will cause real hardship. Those who don’t get their degree carry the debt, but don’t get the wage gains associated with graduation.
The real question I have is why directing the debate away from large-debt horror stories and toward the more modest—but arguably more destructive—debt loads of those without degrees seems to stoke so much outrage.
Well, for one thing, stoking internet outrage is a tried-and-true technique to drive traffic. (Even-handed truth-telling is tough to take viral.) And there’s also the long-standing media dictum: Big numbers are scarier.
But my hunch is that this has a lot to do with class. A vocal, college-educated group dominates the mediascape. (Sicha, for the record, didn’t go to college.) For many of them, student debt is the most formidable of first-world problems. (That’s probably too mean. There are plenty for whom student loan payments are a very big nut each month. I’m not trying to make light of that.)
But the truth is, if you managed to rack up giant student debt loads, that’s likely because you’ve undertaken—and finished—the kind of extensive education that enables you to earn a good salary over time. And while it’s a drag to have to pay your loans, it’s really not a problem for society at large.
The real student debt problem comes in the relatively modest amounts of borrowing done by low-income, first-generation college goers, who are four times more likely to leave school after the first year than students without those risk factors. Incidentally, this is also why increased funding of state schools is probably the answer. And, of course, most elites didn’t go to state schools. (Go SUNY Binghamton!)