I worry, though, that we don't talk enough about the impact this debt has on the ability of borrowers to pursue the dreams and ambitions. With two-thirds of graduates borrowing an average of about $24,000, most young people are starting their adult lives with a financial anchor around their necks that is without precedent in US history.
And that anchor is impacting the decisions they make about their lives.
In their study Constrained After College: Student Loans and Early Career Occupational Choices, Cecilia Elena Rouse and Jesse Rothstein examined the impact of significant levels of student loan debt on career choices. They found that "debt causes graduates to choose substantially higher-salary jobs and reduces the probability that students choose low-paid 'public interest' jobs."
Is this the America that we want? Where people are coerced into taking the highest salary jobs they can possibly find out of a need to service loan obligations they entered into at the age of eighteen?
One recent University of Pennsylvania grad told me that because of his nearly six-figure student loan debt he wouldn't able to pursue the tech start-up hed always dreamed of. His loan payments were starting now, and he had to take the highest-paying job he could find now.
We know that small business and entrepreneurship are the drivers of job creation and economic growth in America. But I wonder: If Larry Ellison, Ben Cohen, and Warren Buffett had left school with the five- and six-figure debt loads that are now commonplace among students who pursue undergraduate and graduate education, would Oracle , Ben & Jerry's, and Buffett's $30.7 billion donation to the William & Melinda Gates foundation ever have happened?
How many of the great start-ups of my generation will never exist because recent graduates are constrained after college?