I’m very late in highlighting this piece by Justin Draeger, the president of NASFAA. But better late than never. This is especially true because the myths he highlights are at the heart of the systematic exaggeration inherent in much of modern reporting on higher education cost and student debt.
In brief …
Myth 1, student aid drives up cost.
This is hard to reconcile with broad trends. The real value of Pell Grants rose in the 1970s, as real college costs fell. The real value of Pell Grants fell in the 1980, 90s and 00s, yet college cost rose substantially.
Myth 2, If you liked the Mortgage Bubble, wait till the college debt bubble bursts.
I cannot fathom how people glibly compare investing in the earning-power asset called education with betting on profitably flipping real estate. The comparison should be suspicious to anyone who has examined the rising return to higher education. In fact, the carrying cost of student debt as a fraction of earning power has remained basically constant over time.
Myth 3, We’re in a debt crisis of over-borrowing for college.
As I have noted before, the work of Sarah Turner and Chris Avery offers a wealth of information about college borrowing. There is no evidence that borrowing for college is wildly out of control, despite the yellow-tinged journalism that focuses on anecdotal stories of students saddled with 120K in debt with little gain in marketable skills to show for it.
The real problem today is that the myths have acquired real power. They have become the common starting point for most discussions of higher education today, and thus they have become truly difficult to dislodge despite ample factual evidence to the contrary.