WSJ’s Student Loan Coverage Improves: More Facts, Fewer ‘Deadbeats’

And not just facts, neutral facts, which is how reporting is supposed to be. I’ve criticized The Wall Street Journal‘s student loan coverage, but its most recent article on the topic, “U.S. to Forgive at Least $108 Billion in Student Debt in Coming Years,” is a start in the right direction.

Okay, the title could use some work. More accurately, it should be something like: “GAO Projects U.S. Will Forgive $108 Billion in Student Loans in Coming Years.” It’s 76 characters, which is too long for most SEO-obsessed editors, but it doesn’t characterize a possibility as a certainty.

Conversely, the WSJ neglects to cite another GAO study on the subject of student debtors’ earnings. Its data are nearly two years old, but they show that 72 percent of people on income-sensitive repayment plans were earning $20,000 annually or less. Not even 10 percent of IBR and PAYE participants (157,000) made more than $40,000 per year.

Thus, the WSJ’s reasoning still follows a shaky line of reasoning:

(1) IBR participants’ debts are high,

(2) High debts are only feasible for grad students taking out Grad PLUS loans,

(3) Graduates tend to find jobs with high incomes and have low unemployment rates,

(4) So the benefits of IBR go to high-income people.

The prior GAO study pokes holes in (3) and (4). Income is the independent variable, not debt, and incomes are low. Still, the WSJ’s reporting this time inserts enough adverbs to qualify these claims that I’m going to give this an earned “C.” There is no grade inflation on this blog.

Oddly, in its haste to cover the GAO’s attacks on the government’s accounting for student loans, the WSJ neglects to include immanent compensating factors that will raise student debtors’ incomes: tax cuts, stimulus, job growth, a harried Fed, and 3-4 percent growth in the near future. Things will rapidly get better for America’s student debtors.

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4 comments

  1. If they admitted there is no million dollar premium and that higher education in no way improved employment, not even today’s special snowflakes would willingly incur that debt load and give up those prime years of their lives to line the pockets of predatory liberal academics.

  2. The “government is going to let all these doctors and lawyers” bs has been around since bankruptcy protection was stripped away from college debt starting in the 70s. It’s no more true now as it was then.

    A lot of this anti-borrower screed in the media is coming from a few sources: A “fellow” at the American Enterprise Institute named Jason Delisle, who has long been a paid mouthpiece for the college debt industry. Also, some
    Of the more sociopathic and hateful members of Congress like Enzi, Foxx, Lamar Alexander, Grassley et al.

    Finally, your use of the word “deadbeat”
    Is unfortunate. So glad no one in your world ever gets sick and/or loses a job.

    1. Hi, Jason paskowitz. Just to clarify, I use the word “deadbeats” to satirize Delisle’s and the WSJ’s fear-mongering over hypothetical high-income debtors who are on IDR plans and could otherwise repay their bills. I’ve changed the title of the post to reflect the joke. I apologize for the confusion.

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