Fear of Links–Blame for Student Debt

This little NY Times piece caught my eye:

Ron Lieber, “Placing the Blame as Students Are Buried in Debt

Gems like, “For starters, it’s a shared failure in parenting and loan underwriting.  But perhaps the biggest share lies with colleges and universities because they have the most knowledge of the financial aid process.” sound like fingernails scratching chalkboards.  No, parents are not to blame for not knowing whether their kids’ student loans are worth it, especially when they didn’t know the economy would crash.  Nor are they to blame for encouraging their children in the competitive education world.

Second, the “biggest share” lies with a bankruptcy system that does not allow consumers to discharge student loan debt unless their hands have been sliced off.  Without dischargeability, lenders (Lieber’s erstwhile blameworthy underwriters) have no incentive to conduct risk assessments of potential borrowers.  True, “colleges and universities” shoulder some blame but not because of their knowledge of the financial aid process.  More significantly, they don’t advocate dischargeability nor do they ensure the educations they provide lead to sustainable incomes, which they’d never admit to.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s