When the government guaranteed student loans, it removed the risk for colleges. This allowed them to hike tuition prices unchecked, knowing students had access to funding. The resulting flood of graduates has also made a college degree less of a differentiator in the job market.

The student debt crisis is less about the cost of college and more about the failure to graduate. The vast majority of a degree's economic benefit is realized only upon completion. Attending college without graduating is a poor investment, making completion rates a more critical focus for policy than enrollment.

Senator Warren highlights a critical omission in standard economic calculations: the cost of servicing debt. Expenses like credit card interest and student loan payments are often left out, meaning official data doesn't capture the full financial pressure American families are facing.

Senator Warren highlights a major flaw in how economic stress is measured: the cost of servicing debt from credit cards and student loans is often excluded from calculations. This omission masks a huge financial burden on families, making their economic situation appear healthier than it actually is.

A surge in student loan delinquency rates to double-digit levels indicates significant financial distress, particularly for the middle third of the income distribution. These borrowers are forced to prioritize essential expenses like housing over their loan payments, revealing a deepening affordability crisis.

To fix the student debt crisis, universities should be financially on the hook for the first portion of any loan default (e.g., $20,000). This "first loss" position would compel them to underwrite the economic viability of their own degrees, creating a powerful market check against pushing students into overpriced and low-value programs.

After a long forbearance period where many new graduates had never made a payment, the resumption of student loans saw delinquency rates spike to over 20%, more than double the historical 10% average. This reflects both immense financial strain and widespread confusion over repayment programs.

Blanket student loan forgiveness fails to address the root cause: skyrocketing tuition fueled by easy credit. A better solution is to force universities to have skin in the game by making them financially liable for a percentage of defaulted loans, which would incentivize responsible lending and curb price inflation.

A new agreement ensures borrowers in income-driven repayment plans who qualify for forgiveness this year will not face federal taxes on the canceled debt, even if administrative processing pushes the cancellation into next year after a temporary tax break expires.