By Thomas Woods
Ron Paul was asked about student loan programs, which have made debt slaves out of countless kids, in his excellent interview on Meet the Press. Here’s an excerpt from Rollback, my book from earlier this year, that amplifies his points:
We know all about the easy-money policies that lured people into crushing amounts of mortgage debt, but we hear less about how those same policies have encouraged impossible amounts of debt related to higher education, for undergraduates and graduate students alike – especially in the wake of the financial crisis, when the job picture for these students is so bleak. (Many of them have indeed found employment, to be sure, but not quite the jobs they were looking for.)
In early 2009, Forbes magazine told the story of Joel Kellum and Jennifer Coultas, who met at the California Western School of Law and were later married. When they graduated in 1995, their combined debt was $194,000. Each got a six-figure job. But even with one of them moonlighting, they managed to come up with only $145,000 in loan payments. That reduced the principal of the loan by $21,000. Just $173,000 to go.
When they divorced last year, the couple cited the crushing burden of law school debt as a key factor in ruining their marriage. “Two people this much in debt just shouldn’t be together,” said Kellum.
Or there’s Mindy Babbitt, who enrolled at Davenport University in her mid-20s to get a degree in accounting. She borrowed $35,000 at 9 percent interest, and assumed the income she could command with her degree would make it all work. Instead, the entry-level job she found upon graduating barely kept her above water. She deferred her loan payments, and for a while was out of work. At age 41, she told Forbes she despaired of ever paying off her loan. She earns $41,000 per year – $10,000 more than the average high school graduate. But by now her student loan balance has risen to $87,000.
Watch the video interview of Ron Paul on Meet The Press:
Thomas E. Woods, Jr., is the New York Times bestselling author of 11 books, most recently Rollback: Repealing Big Government Before the Coming Fiscal Collapse and Nullification: How to Resist Federal Tyranny in the 21st Century. A senior fellow of the Ludwig von Mises Institute, Woods holds a bachelor’s degree in history from Harvard and his master’s, M.Phil., and Ph.D. from Columbia University. Learn more about Tom Woods here.