Personal Finance

I'm not hand-waving the student loan issue away, I'm merely saying it's not as impactful as the media makes it out to be. I'm a massive opponent of the 1992 bill that made student loans much easier to get because we ended up with a bunch of kids taking on debt who don't know what they want to do with their lives, much less understand the long-term consequences of debt.

However, pointing at student loans in isolation to show that millennials are screwed isn't reasonable, we need to look at the big picture. Look at home-ownership rates (biased source, but they had a good graphic; there are plenty of others) as an indicator. Millennials lagged previous generations for a bit (perhaps due to student loans?), but they've caught up and it's possible they'll surpass previous generations. They're buying houses a bit later, but they're still buying houses in similar numbers. To me, home ownership is a strong indicator of a healthy economy, because you can't buy a house if you're unable to scrap together cash for a down-payment and meet the monthly payments.

So while the student loan crisis is bad, it's not completely ruining the millennial generation, it just seems to be a unique detail, and each generation has those. We should obviously do something to fix it, and my proposal is to allow them to be discharged in bankruptcy and phase out government loans and go back to using grants instead. I think that has the best chance of being a "soft landing" since only those who are completely screwed over by it will choose bankruptcy, and those who value their credit will just pay them.