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Opinion
Megan McArdle

What We're Buying With $1 Trillion in Student Loans

College is a big investment. Does it make people that much more productive?
Well. At least it was fun.

Well. At least it was fun.

Photographer: Christopher Furlong/Getty Images

College is expensive, and getting more so every year. Since most families don’t have tens of thousands of dollars lying around, the government has responded with ever-more-generous student loan programs.

First there were the loans themselves, with interest subsidized while you’re in school. Then, when that proved inadequate, we instituted income-based repayment, allowing students to cap their payments at a percentage of their discretionary income (stretching out the loan, and getting forgiveness on any balance remaining after 25 years). Then, since that wasn’t quite enough, we made the terms more generous. Now the Obama administration has announced that it’s making 5 million more people eligible for the program.