Weighing the Costs and Benefits

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Some economists argue that there is not a debt issue, but rather a repayment issue. Susan Dynarski, is one of those economists.  She is a Professor, University of Michigan; Nonresident Senior Fellow, the Brookings Institution; Faculty Research Associate, and apart of the National Bureau of Economic Research and exemplifies a strong sense of logos in her writing through her use of quantitative evidence and graphs that provide unbiased information. Dynarski revels if this trending issue is really enough to be considered a crisis, and explains the cost-benefit of college.

Dynarski describes education as an investment. Defending the government to lend students money because they predict they will profit more in the future. The issue of student loans is actually less than the majority of people think it is. The focus is always on the borrowers who have high loan balances, when the most defaults occur on much smaller loans. There is always a major focus on undergraduate debt degree, when 40% of federal loan dollars were disbursed to graduate students.   

A college education is an investment.  A person who has graduated from college typically earns several thousand dollars more than a person who only graduated high school. In most types of borrowing the loan matches the life of the collateral.  For example, a person who is buying a house can expect to pay the house off for 30+ years.  But considering our current terms the standard time allowed to repay your loans is 10 years. This is difficult for young borrowers to manage.  Among borrowers under 21, 28% of those people will eventually default their loans.