Basically, Gen X got screwed by timing. They were the guinea pigs for the whole “take out massive federal loans for college” experiment. College costs quadrupled right as they were graduating high school, and the idea was that getting a degree was the way to get a good job. They’ve had these loans for over 20 years now, and the interest has been compounding into an absolute monster. A loan of 75k turning into 300k is a perfect example of how insane the interest accrual has been.
On top of that, as gen x were trying to buy houses and start families, they couldn’t always make payments. Their loan servicers told them to just pause payments, but the interest kept piling up during that time. As more and interest kept getting piled on top of the principal, they end up paying interest on their interest. So the whole thing turned into a debt trap in disguise.
And the final nail was when Biden admin dangled loan forgiveness, telling everyone to consolidate their loans to qualify. So they did, but this officially rolled all that unpaid interest into their principal, making their total debt explode overnight. Then the forgiveness plan got killed by the courts, and the next administration came in with a pay up or else attitude. They followed the rules for a program that vanished, and now they’re stuck with an even bigger bill as they head into retirement. It’s a total cluster fuck.
Which is a really weird strategy given that the US is becoming less attractive to foreign talent that’s traditionally been used to offset the need for making domestic education accessible.
oh I managed to find a podcast version which wasn’t paywalled for me https://www.wsj.com/podcasts/the-journal/student-loan-debt-is-strangling-gen-x/3e216e7e-f23e-4ea2-9e83-d2c637248446
Basically, Gen X got screwed by timing. They were the guinea pigs for the whole “take out massive federal loans for college” experiment. College costs quadrupled right as they were graduating high school, and the idea was that getting a degree was the way to get a good job. They’ve had these loans for over 20 years now, and the interest has been compounding into an absolute monster. A loan of 75k turning into 300k is a perfect example of how insane the interest accrual has been.
On top of that, as gen x were trying to buy houses and start families, they couldn’t always make payments. Their loan servicers told them to just pause payments, but the interest kept piling up during that time. As more and interest kept getting piled on top of the principal, they end up paying interest on their interest. So the whole thing turned into a debt trap in disguise.
And the final nail was when Biden admin dangled loan forgiveness, telling everyone to consolidate their loans to qualify. So they did, but this officially rolled all that unpaid interest into their principal, making their total debt explode overnight. Then the forgiveness plan got killed by the courts, and the next administration came in with a pay up or else attitude. They followed the rules for a program that vanished, and now they’re stuck with an even bigger bill as they head into retirement. It’s a total cluster fuck.
living nightmare fuel and proof that education will once again only be available to the highly privileged.
Which is a really weird strategy given that the US is becoming less attractive to foreign talent that’s traditionally been used to offset the need for making domestic education accessible.
making the education that can make you question the ruling class more difficult to attain strikes me as evilly genius.
Keeping workers just smart enough to extract value from is definitely part of the rationale, but you end up with unintended consequences. :)