In the January 28th Wall Street Journal, Mitch Daniels (president of Purdue and former governor of Indiana) had an op-ed piece in which he decried the economic harm done by the heavy student debt burden. He made a pretty good case that all the money that grads have to divert to cover their student loan payments is dragging down home purchases, family formation, entrepreneurship and other things that contribute to our economic vitality.
He isn’t wrong, but student debt is the the visible symptom of the real economic problem, namely the waste of land, labor, and capital on educational credentials with little or no human capital value. Whether the costs are paid out of pocket (as quite a few do) or through huge loans is immaterial. Either way, the true burden is the waste of student time and energy plus that of faculty members, administrators and so on for a college experience that has minimal educational benefit.
The only real way of lowering the economic burden is to eliminate the government subsidies that cause many young Americans to see college not as a learning experience worth striving for, but instead as a pleasant interlude between high school and work that they are entitled to.