Economists Offer Unconventional Wisdom on Student-Loan ‘Crisis’

Student debt is a crisis, holding back the economy and hobbling a generation. Wonder why today’s young adults aren’t getting married, having children, buying homes, starting businesses, saving the world? Look no further, the culprit is obvious. That’s the conventional wisdom, and it’s taken for granted in many news articles and plenty of policy prescriptions.

That narrative, however, is misguided, according to two new books. What’s worse, they argue, the crisis talk precludes a closer examination of the student-loan system’s real problems and hinders efforts to help the borrowers who are struggling the most. To push back on that understanding of debt, the books offer data, evidence, context. But will any of that change people’s minds? After all, the assumption that the country is in a student-debt crisis is everywhere.[...]

Mark Huelsman, a senior policy analyst at Demos, a liberal-leaning think tank, agrees with the authors about which borrowers are really struggling. But that, he said, doesn’t mean that there isn’t a student-loan crisis.

Some people see that the typical borrower is all right but that those in some corners are struggling, and think that "crisis" is the wrong description, Mr. Huelsman said. He’d put the authors in that category. Others look at what’s happening in those corners and see a crisis. "Most smokers don’t die of lung cancer," Mr. Huelsman said, and "most people in the wake of the housing crisis didn’t lose their houses. But there’s real pain."[...]