There's a tendency to talk about student loans in terms of arcane statistics like cohort default rates.
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?
The rise of student loans into the largest category of unsecured debt in America surpassing credit cards earlier this yearhas put recent grads on a treadmill of short-term greed: doing whatever they can to earn the most money now to avoid defaulting, while shortchanging their long-term career goals and ambitions.
In the long run, this is bad for borrowers and even worse for America.
Policymakers, educators, and most importantly, families need to come together and recognize that more loans are not the answer to the problem of rising college costs. Milton Friedman had already figured that out in 1955 when he wroteof the "inappropriateness of fixed money loans to finance investment in training.
When I graduate in the spring, I'll be student loan-free because I chose an affordable school and worked throughout high school and during college so that I could pay cash for it. When you run the numbers on it and break it into bite size pieces with a monthly payment plan, you might be surprised at how doable this actually is.
There are all kinds of formulas about how much students can borrow, but the only way to guarantee that youll never be constrained after college is to do it debt-free.
Watch the premiere of "Price of Admission: America's College Debt Crisis," a CNBC Original documentary, Tuesday December 21 at 9pm ET.
Zac Bissonnette is a student at the University of Massachusetts Amherst and author of Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching Off My Parents.