The Student Lending Mess Needs to Be Fixed
Debt forgiveness was a misguided attempt to tackle an enduring problem: Too many Americans have college loans they can’t repay.
Better ideas are needed.
Photographer: Daniel Steinle/Bloomberg
After years of poor decision-making, the federal government’s $1.64 trillion student loan program is in critical condition. Congress needs to stanch the bleeding — and give serious thought to overhauling this flawed system for the longer term.
The underlying problem is clear: Too many students have loans they can’t repay. Even before the pandemic, about 17% of borrowers were delinquent or in default. Covid-related payment freezes and an ill-advised effort by President Joe Biden’s administration to offer debt forgiveness have exacerbated the problem, leaving millions of borrowers in legal limbo and fewer than half current on their payments.