Several recent articles have focused on the fact that student loan debt keeps increasing. Among them is Josh Mitchell’s August 18 Wall Street Journal piece, “Grad-School Loan Binge Fans Debt Worries.”
He begins with the story of Virginia Murphy, who borrowed “a small fortune” so she could go to law school at Tulane with the intention of getting a public defender job. Yes, I would say that $256,000 counts as a small fortune.
Her job pays $56,000 per year. Currently, Ms. Murphy is paying just $330 per month on her loan balance, which is less than the interest. The balance will keep growing and will exceed $300,000 in seven years.
Ah, but she isn’t worried. She told Mitchell, “the only reason I would ever have considered” amassing all that debt is that she expects that most of it will be forgiven. Most of the money she spent getting her JD at Tulane will ultimately come out of the pockets of the taxpayers, thanks to the kindness and generosity of the feds.
That generosity is helping to keep the higher ed bubble inflated, particularly at grad schools. The misallocation of resources is glaring. The bilking of the taxpayers is unpardonable and unconstitutional.