Why Student Debt Burden is Falling Like a Stone

Alex Usher, odd time signatures, Jan 28, 2014
Commentary by Stephen Downes

I don't know what Higher Ed Strategy's Alex Usher is up to with this article purporting to show that the student loan debt burder issue is "people trying to manufacture a good crisis" but this article doesn't show it. It purports to "care about the data" but is almost completely unsourced. The one reference to an external resource is to a Canadian Tax and Credit Simulator, which while it may be a great tool, is not data. Most of his data is based on total borrowing for the year, not individual debt loads. OK. Reality check. Net income for graduates has been steady or declining a bit in real terms over the last couple of decades. Interest rates - the main determinant of repayments - have fallen a lot; they were up over 16% when I graduated in 1986, were down to the 7% range in the 1990s, and now are in the 3% range. But despite this - according to Usher's own figures - the student loan burden is as great today as it was in the 1990s. Imagine what they would look like should the interest rate return to 7% or even 16%! The purported 'easing of the debt buden' isn't actually an easing at all, it's a temporary (albeit welcome) but of relief. An interest rate increase, combined with stagnant net incomes, will pull the rug out from under a very precarious house of cards. And that's in Canada; things will be worse in regions where tuition is much higher.

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