Imagine a drug company selling a pill that promises to make you smarter and more capable. It costs $200,000, requires four years of regular doses, and

Skin in the game: Fixing higher education’s student debt problem » Anand Sanwal

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2024-11-16 13:00:05

Imagine a drug company selling a pill that promises to make you smarter and more capable. It costs $200,000, requires four years of regular doses, and is usually bought with borrowed money.

If it doesn’t work – if you end up no smarter or more capable – you still have to pay back every penny.

What’s interesting isn’t that this system is broken. What’s interesting is that we’re surprised it’s broken.

We’ve created a market where sellers face no consequences for failure and buyers can’t discharge their debt through bankruptcy.

The Education Data Initiative reports $1.73 trillion of student debt as of 2023. Look at the rapid climb in student debt and it’s clear that America’s universities have become phenomenal dealers of debt.

The average student loan debt for the Class of 2023 is $37k+. And the dramatic piling on of debt over time by these institutions is starkly illustrated below.