The Debt Trap: How Student Loans Became a National Catastrophe

The $1.6 trillion Americans owe in student loans is greater than the size of the Canadian economy, notes Wall Street Journal reporter Mitchell in this meticulous, eye-opening history of the student debt crisis. Though the G.I. Bill effectively paid for mass higher education in the years after WWII, Congress rejected Harry Truman’s attempt to make the first two years of college free. Instead, the U.S. government assumed all the risk of student loans, while banks and colleges profited. Universities raised tuition costs because consumers could simply borrow more to pay for it, and banks extended government-guaranteed loans to students who had little hope of paying them back. Mitchell poignantly recounts the stories of borrowers including Lisa (no last name given), a 54-year-old single mother of two who took out loans to pay for her undergraduate and graduate degrees and now is on the hook for $96,820, on top of dealing with breast cancer and anxieties over her daughter’s student debt. Mitchell masterfully explains how America got itself into this debacle, though readers will wish for a more robust inquiry into the solutions he supports, which include forgiving interest on student loans, making community college “truly free,” and government funding for apprenticeship programs. Still, this is an immersive and illuminating introduction to a hot-button issue. (Aug.)