Opinion: ‘We’re missing the point when it comes to the crisis of student debt.’ – MarketWatch:

Last month, the Supreme Court ruled that the Biden administration’s student-loan forgiveness program, which would have forgiven $430 billion in loans held by 40 million borrowers, cannot move forward as originally proposed.

This is regrettable, but in some ways, we’re missing the point. When it comes to the crisis of student debt, where is the call for wise student borrowing? Isn’t anyone making the connection between this national problem and the financial-illiteracy crisis?

I don’t think this is regrettable at all. Taxpayers shouldn’t be paying off loans for people who willfully entered into them. (This is distinct from students who were defrauded by fly-by-night diploma mill colleges.)

No one put a gun to the head of the students who took on massive student loan debt. I’m sorry they don’t like the consequences of this, but community college is virtually free in most states and an excellent, affordable higher education option. 

Bottom line: the student-debt crisis exists in large part because young people borrow thousands of dollars for college, and oftentimes end up with jobs that make it difficult for them to pay off their loans in a timely manner. A rough guideline is that your total loans should not exceed the annual salary of your first job.

The average student-loan debt is $37,338, but that rises to $54,921 per borrower for private student-loan debt. Now for more bad news: The average starting annual salary for students graduating last year hovers at just over $55,000.

That is as easy a financial rule-of-thumb as could be. A grade schooler could do this math. Yet college students seemingly fail it all the time. 

Student debt in the U.S. currently exceeds $1.6 trillion — and rises to $1.7 trillion if you add on private student loans. A recent report by Moody’s Investors Service states that slow repayments are a bigger cause of the mounting national student debt than are increased enrollment and tuition costs. I’d add a lack of personal financial education as another major cause, and it’s a problem we can solve.

I think author is wrong on this final point, but only because I don’t think it’s an issue of personal financial education. I think instead it’s an issue of personal responsibility. That’s a much hard issue to solve for.