There is a remarkably block-headed article by Gretchen Morgenson in today's NY Times about the student loan crisis. Morgenson, who sometimes makes sense, makes no sense in today's article. Her article is about the repayment, or lack of it, process that takes place when it is time for the borrower to repay.
You would think that these college students were totally incompetent to read a loan document. You would probably be right. It is highly likely that very few of these borrowers should have gone to college in the first place, much less had a convenient, taxpayer-backed, way of borrowing.
There was no discussion in the article about whether or not any of these students worked during their college years -- a phenomenon that is all too infrequent these days.
There is no concern in this article for the interest of the lenders, who are out the money. They turn out to be the villains in Morgenson's article. This is the usual NYTimes narrative -- those lending money are villains. This theme was the usual tale of 2008, where mortgage lenders were villified while those who lived high on the hog -- way above what they themselves could reasonably support -- were portrayed as the victims.
Why do you think students need so much loan money today? Could it be that all of those administrators pulling down high six figure incomes, while working a six month year, are costly to support? Take a look at the pay rate of deans, provosts, university presidents, sexual assault specialists, gender studies directors and on and on. These folks make a fortune and they have dramatically added to the cost of education.
Those who, unwisely, expanded student loan access to prop up the current over-bloated, wasteful colleges and universities, are the real villains.
Rather than blame lenders and innocent taxpayers, Ms. Morgenson should look into the root causes of the absurd costs involved in obtaining a college education today. While she's at it, take a look at the absurd courses of study that these borrowers are pursuing. No wonder they can't pay these loans off.
This problem results from an unholy alliance of university administrators and folks like Elizabeth Warren and Bernie Sanders who think that the average American should pony up for every cause that those motoring around in limousines and fancy jets can dream up.