Debt and Disinformation

Why the student loan debate is about more than just personal responsibility

In the ongoing political feud over student loan forgiveness, few issues have sparked as much resentment and misunderstanding as the role of federal debt relief. On the political right, the rallying cry is often simple and loud: "I paid off my loans, why should I pay yours too?" Supporters frame any attempt at relief as a government handout—a burden unfairly shifted onto hardworking taxpayers.

But this framing ignores the complexity of the problem. It overlooks how dramatically the economics of education have changed over the last 40 years. And most importantly, it misrepresents the very people it targets: the borrowers themselves.

The Myth of Irresponsible Borrowers

Contrary to political caricatures, most student borrowers do not expect a free ride. They understand they borrowed money and intend to pay it back. What many did not expect was how the system would shift beneath their feet.

Today, student loans often come with interest structures more aggressive than mortgages. Borrowers find themselves trapped in repayment plans where monthly payments barely scratch the interest, let alone the principal. In many cases, total debt owed grows over time, not because of new borrowing, but because of compounding interest. Some federal loans accrue interest while students are still in school. Others continue accumulating during deferment or forbearance periods.

This isn’t about dodging responsibility. It’s about the impossibility of fulfilling it under a rigged system.

Then vs. Now: A Cost Comparison

When critics say, "We paid our loans, you should too," it’s worth asking: Which loans, and under what conditions?

A college student in the 1970s or 1980s paid dramatically less in tuition and living costs. According to the National Center for Education Statistics, in 1980 the average annual cost of tuition, room, and board at a four-year public university was about $2,550. Adjusted for inflation, that’s roughly $9,000 in today's dollars. In contrast, the average cost in 2023 exceeded $25,000 for in-state students and $45,000 for private colleges.

The rise in education costs has far outpaced inflation, while wages—especially entry-level salaries—have remained largely stagnant. A degree that once required manageable loans now demands decades of repayment.

Yet this comparison is rarely acknowledged in political arguments. The assumption is that borrowers today are simply less disciplined, when in fact they are navigating an entirely different economic reality. nces.ed.gov

Selling the Dream, Then Charging for It

There is also a deeper social contradiction at play. From a young age, American students are told that college is the key to success. Schools promote higher education as the singular path to upward mobility, often pressuring students to choose the "best" school regardless of cost.

Meanwhile, universities have increasingly adopted a business model, with rising administrative costs, luxury campus amenities, and aggressive tuition hikes. This is not a system designed for public service—it is one structured for profit extraction. Even federal student loans are administered in a way that generates long-term revenue for the government.

So when we ask why students take out loans they struggle to repay, we must also ask: Why is higher education in America priced like a luxury product?

Global Perspective: An American Outlier

Many of the world’s wealthiest nations offer free or low-cost higher education. In Germany, public universities charge little to no tuition for both citizens and international students. In Norway, education is funded by taxes and students are only responsible for living costs. Even the UK, while far from perfect, caps interest rates and limits repayment to a percentage of income.

The U.S. model stands alone in its emphasis on individual debt over public investment. We tell students to educate themselves for the benefit of society—then make them pay for it with interest.

Who Really Benefits from Relief?

Opponents of student loan forgiveness argue that it helps only the privileged. But data shows that a significant portion of borrowers are low- to middle-income earners. Many are first-generation college students, single parents, or public servants. Loan forgiveness doesn’t cancel all debt—it levels a playing field that was never even.

And it doesn’t come at the cost of the taxpayer in the simplistic way critics suggest. The federal government already loses billions on failed repayment and administrative overhead. Canceling debt for those most burdened may actually reduce long-term costs and stimulate economic growth. brookings.edu

A Broken System, Not Broken People

It’s time to stop pretending this debate is about laziness or entitlement. It’s about math, policy, and fairness.

The truth is this: the American student debt crisis is a symptom of a deeper flaw in our national priorities. We’ve chosen to monetize education instead of invest in it. We’ve chosen to profit from ambition rather than reward it.

Relief doesn’t erase responsibility. It acknowledges that the system failed to uphold its end of the bargain.

And until we fix the system itself—until we stop treating education like a commodity—we’ll keep punishing the very people we claim to empower.