, Newburyport, MA


July 8, 2013

Our view: College tuitions are driving student loan crisis


Higher education has become higher-and-higher education as tuition, fees and other costs have outstripped the rate of inflation by better than 2-1.

Congress has only fueled the fire by giving it more oxygen -- cheaper and more readily available loans and grants.

As more money becomes available, colleges raise prices to suck it up.

The average student carries a debt of almost $30,000 into the working world. Some owe six figures.

The collective debt has become a colossal drag on the economy and on the lives of young people. Many can’t afford cars or homes. Disposable income? Sorry, I owe my soul to the college store.

So what can be done?

Pressure must be brought to bear on “Big Education” to drive down prices and, thus, student debt.

One way to do that, suggests Glenn Reynolds, author of “The Higher Education Bubble,” University of Tennessee law professor and influential blogger at “Instapundit,” is to make colleges partly responsible when their graduates can’t repay their loans because they haven’t been equipped to find decent jobs.

“I would favor allowing students who can’t pay to discharge their loan balances in bankruptcy after a reasonable time — say, five to seven years, maybe even 10 — with the institutions that got the money being liable to the guarantors (i.e., the taxpayers) for, say, 10% or 20% of the balance,” Reynolds wrote in a recent Wall Street Journal column that also made the point that it’s not so much the interest it’s “the principal of the thing.”

We like the idea.

Ultimately, however, students and parents can bring even more pressure to bear on colleges by asking critical questions before incurring debt that will follow the students long into adulthood.

Is a degree from this school really worth $40,000 or $50,000 a year? Can it get me a job that will pay enough to repay the loan?

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