AI Performance Task

Worth the Debt?

For decades, the message sent to American students was consistent and nearly universal: a college degree is the surest path to economic security. Guidance counselors repeated it, politicians endorsed it, and the federal government reinforced it structurally by expanding access to student loans so that cost would not be a barrier. Between 1980 and 2020, federal student loan volume grew from roughly $10 billion annually to more than $100 billion, as Congress repeatedly raised borrowing limits and expanded eligibility. By the early 2000s, going to college had stopped feeling like a choice for many families and started feeling like an obligation. Borrowing to pay for it seemed not just reasonable but necessary.

What the message obscured was that the promise was never equally reliable for everyone who accepted it. The earnings premium attached to a degree varied enormously depending on the institution, the field of study, and the state of the labor market at graduation. Meanwhile, tuition had risen sharply — at four-year public universities, average tuition and fees increased by more than 200 percent between 1980 and 2010, even after adjusting for inflation — partly because the ready availability of federal loans removed financial pressure on institutions to keep prices down. The students who borrowed most were frequently those with the fewest resources to absorb the risk, while the institutions and government that encouraged the borrowing bore none of it.

The debate over student loan forgiveness has exposed how difficult it is to assign responsibility when many actors contributed to a single outcome. Borrowers signed the loans. Colleges set tuition knowing loans would cover it. The government expanded lending without regulating costs or outcomes. Some argue that because the promise was so systematically overstated — by institutions with financial incentives to overstate it — borrowers deserve relief. Others contend that adults who voluntarily entered loan agreements bear primary responsibility for repaying them, noting that loan terms, interest rates, and total borrowing amounts were disclosed at signing, and that many borrowers took on significant debt for degrees in fields with well-documented limited earning potential. Both arguments are grounded in recognizable principles of fairness. They simply disagree about which principle should take precedence.