The Debt Problem – Part I

Student debt is no small problem, but colleges can take the first step toward addressing it.

In his column in The New York Times on March 9, Charles M. Blow states: “We are reaching a crisis point in this country’s higher education system” because of “staggering levels of debt.” He notes that student loan debt has more than doubled in the last eight years, to almost $1 trillion, and that, not unexpectedly, student loan debt is hardest on families in the bottom quintile of family income. Mr. Blow ends his column with, “We are on an unsustainable track. This will not end well.”

How is it that this problem has become so large so quickly? How do we fix it? Is this as big a problem as people claim?

I’m glad you asked. This is a problem that resulted from many intersecting forces:

Posted on Monday, February 11, 2013

The Folly of Early Action

Early action pressures colleges to award financial aid without information on student need.

Some years ago, a few of the most prestigious colleges and universities adopted a new model for admitting students. Rather than facing a delay of several months after making application before hearing the university’s decision, a prospective student could choose to apply for “early decision.” The very best applicants would learn much earlier in the admissions cycle that they had been accepted – but the catch was that they then had to commit to attend the university that had accepted them. No longer could they wait and compare offers from other institutions. “Early decision” cut both ways: in return for an early answer, the student was obliged to make an irreversible commitment.