Profiting off Debt: Federal student loans facilitate a pernicious profit motive in higher education
"Student loan debt has achieved gargantuan proportions. Over the past two decades it has grown to $1.44 trillion, surpassing other forms of debt like credit cards and auto loans. This debt mountain didn’t form overnight and it wasn’t an accident. It has been fueled by intentional government policy. Instead of public investment and true accessibility, college on credit and for profit has become the norm.
Since its inception, the Federal Student Loan Program has been a patchwork solution — created under a guise of access and affordability — to demands for higher education as a public good. But instead of creating more opportunity, the federal loan program has set the stage for a looming student debt crisis by profiteering off students who are already economically vulnerable and obfuscating the urgency of abolishing debt altogether.
Just over a decade ago, outstanding student debt was $250 billion, meaning aggregate debt has grown more than fivefold since then. According to a recent report, the rapid increase in aggregate student debt between 2004 to 2012 is attributable both to an increase in the number of borrowers and an increase in the average debt per person: The proportion of students relying on debt to finance their education increased 70 percent during this period, while the average debt load per student went from $15,000 to $25,000. More and more students are becoming victims of onerous debt."