The Student Loan System is Dead. The Pandemic Killed It.

“…If a borrower’s spending increased during the pandemic, they should review their budgets to free up money to start making student loan payments. Cut back on discretionary expenses. Borrowers can also increase their income by asking for a raise, working a part-time job in the evening and weekends, or by switching to a better-paying job.”

The student loan “apocalypse” has already happened- more than two years ago. The pandemic is the nail in it’s coffin. There is no saving it, and there is no good reason to save it.

Source: U.S. Department of Education (Q4 2020)

A default rate 3–4 times higher than the subprime rate. Fewer than half of all borrowers paying. 80% of all borrowers underwater. Older borrowers outnumbering younger borrowers, and owing far more despite having borrowed far less. All of these happening before the pandemic. Is this not indisputable evidence of a totally and catastrophically failed lending system?

Turning the Federal Student Loan System Back On

Federal student loans are, for better or worse, vanishing into a mist of illegitimacy, and time only hardens this popular rejection. There is literally nothing that can be done to change this fact.

President Biden can spend the next 3 years pretending that the federal student loan system is viable, and preside over a painful, messy, probably civilly-unrestful unwinding. Or, he can toss this train wreck on the scrapheap of failed U.S. policy experiments, and spend (possibly) the next 7 years creating an efficient, fair, and uncorrupted higher education financing system that actually works.



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Alan Collinge

Alan Collinge


I am Founder of StudentLoanJustice.Org, author of The Student Loan Scam (Beacon Press), and creator of the petition Change.Org/CancelStudentLoans