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More fuel for the student loan debate in the US

A recently released report, "Drowning in debt: the emerging student loan crisis", by Education Sector – a Washington think tank – comes at a critical moment for the student loan debate in the US. As the title already shows, the report aims to highlight a long term growth in student borrowing, which has intensified in recent years (between 2003 and 2008, the reference years for the analysis) and the fact that students in the US have increasingly turned to private lenders to meet their escalating college bills. The study shows that the percentage of students in this situation had risen at undergraduate level from 5 percent in 2003 to 14 percent in 2008 – an alarming growth rate, the report warns. The authors, Eric Dillon and Kevin Carey, also criticise President Obama’s plan for student loans for not addressing the root cause of the steep increase in student debts, namely the escalating tuition costs.

While there is general consensus that student debt is a problem in the US, there appears to be less consensus on how big of a problem it really is. Consequently, criticism of the findings and interpretations in the report has already been voiced. For a closer look, the report is available for download on the Education Sector’s website.

Education Sector