Writer: Steve Dinnen
Today, some 70% of students take out loans to pay for their higher education. The outstanding debt load for 45 million students stood at $1.7 trillion last year, growing at a rate six times faster than the nation’s economy. The average debt is $37,691 per student. The University of Iowa estimates 2021-22 tuition, room and board at $21,610 per year for an in-state student.
There have been efforts to address the situation. The CARES Act of 2020 suspended student payments on some loans and provided tax benefits for employees whose employers can help with loan payments.
Now there are calls by some congressional Democrats for President Joe Biden to cancel as much as $50,000 of loan debt for every borrower. Biden has rejected that idea.
Opponents ask where the government might get the money to pay for this. And students who paid their way through school without taking on debt might ask why they went to the effort.
Student debt is a suppressant to wealth accumulation by new graduates. Money spent on a loan leaves less to acquire a home or a car, or to invest in a mutual fund or otherwise join the adult, career world.