Last week the Washington Times (12/5/2012) discussed the “student debt explosion” in this editorial which provides an excellent overview of the matter. The numbers are getting more and more grim.
Of course, there will be increasing political pressure to write off these loans. Why not? We can just have the fed monetize some more debt in our funny money world. No problemo.
Nevertheless, conservatives should not be tempted to say that this is not a huge problem. Nor should we start blaming the victims. The college debt crisis is another example of welfare state policies run amok. Young debtors who wouldn’t be allowed to get a credit card have been allowed to pile up massive college loans. The subsidization of higher ed is producing massive wealth transfers from the middle class to academic institutions. The Academy is becoming the modern version of Standard Oil.
Conservatives need to offer hope to the young by using their influence both political and commercial to develop alternative tracks for academic credentialing for jobs. Simultaneously, we need to push hard for online alternatives to brick and mortar schools. It won’t be perfect, but this is a sector of the economy that desperately needs a couple decades of Schumpeterian “creative destruction.”