In today's Boston Globe, Harvard Law professor Elizabeth Warren and student Ganesh Sitaraman have a good summary of the repercussions from soaring student loans:
The high costs of carrying student loans echo through dozens of life-shaping decisions. Big student loans? Don't become a public school teacher, a firefighter, or a police officer - the pay is too low. Better not go into business for yourself - too risky when you have big loan payments every month. Don't apply to graduate school - just more debt. And don't even think of moving back to Iowa or Oklahoma - pay scales aren't high enough to support debt payments. Today's students talk about delaying marriage, not buying a home, and working full-time when babies are born, just so they can keep paying those student loans.
Their solution is to offer graduates full or partial loan forgiveness in exchange for a few years' work in public service. Not a new idea, but one that may get more support as the costs of education continue to rise.
Warren's op-ed fits into her larger thesis that housing and education -- not frivolous spending on TVs and cars -- are pushing the typical American family into debt. Read her interview with former CommonWealth editor Bob Keough from 2003, in which she notes how the desire for a home in the suburbs is about more than social status:
[P]arents are trying to pick among the ruins to find the school districts they believe represent a decent chance for their children to make it safely through school, get a good education, and launch them toward college. But as it becomes harder and harder to find good school districts, the prices in those particular zip codes keep going up.
Warren also participated in the CommonWealth forum titled "Going for Broke: Middle Class Families on the Financial Edge." Read the transcript here.