Sunk Cost

"Student loan horror stories are seemingly endless. And yet, since research continually shows that the clearest road to financial stability is a college degree, Americans continue to make the optimistic choice to attend college. Whether they attend state schools or elite privates, community colleges or for-profit behemoths, they will almost certainly need loans to make it to college. If and when those students receive their diplomas, however, student loan payments quickly follow. With rising housing and childcare costs, even those with secure, full-time employment can find it difficult to make ends meet. Many Americans would insist that they chose to enter into debt and should be responsible for those choices. In this book, journalist Jillian Berman shows that focus on personal choice misses the forest for the trees. Through the stories of a diverse group of American college students, history, and policy analysis, Berman demonstrates that the college loan system is built to generate debt. First, federal loans-initiatives designed to support education-are surprisingly difficult to pay down. Second, there is no truly public option for college, making debt all but inevitable. Both of these issues initiated in and were exacerbated by years of policy decisions influenced by corporate lobbyists. The way the student loan system is set up-with guaranteed payback to institutions from the federal government-encourages abuses from all players. The government simply provides too much incentive for schools to list high tuitions and recoup all those funds through government reimbursement. While President Joe Biden's aggressive plan to cancel student debt was overturned by the Supreme Court, his administration has been chipping away at the debt crisis through piecemeal legislation. Berman shows how these measures have helped borrowers, but ultimately argues that these small fixes won't get at the structural problems she identifies. If college continues to get more and more expensive (and for-profit), we'll keep throwing good money after bad"--