From acclaimed Wall Street Journal reporter Josh Mitchell, the dramatic, untold history of student debt in America.
The average graduate in 2017 left school with $35,000 in student-loan debt. The national student debt load has soared to $1.6 trillion, far surpassing credit card debt. Default rates are climbing. At the center of this crisis is a multibillion-dollar industry that profits from student's financial peril. It is clear that the system is broken. How did we get here?
In The Debt Trap, Wall Street Journal reporter Josh Mitchell tells the untold story of the scandals, scams, predatory actors, and government malpractice that have created this monster.
The tale begins in 1957 with the launch of Sputnik. Afraid that America was falling behind the Soviets in science education, Congress created the first ever student loan program in an effort to enroll more students in college. What followed were a series of well-intentioned government actions that set in motion a cycle of reckless lending. Suddenly, the higher education market was the Wild West. Easy access to loans allowed colleges to raise tuition to unheard of levels, which in turn lead Congress to increase loan limits. This spiral continued for decades as the private banks that fronted the money made huge profits on interest. Sallie Mae, originally a government entity, was transformed into the most profitable publicly traded student loan lender in history. Suddenly, student loans were big business.
As he charts the gripping seventy-year history of student debt in America, Mitchell never loses sight of the countless student victims who find themselves ensnared by an exploitive system that depends on their debt. Mitchell also draws alarming parallels to the housing crisis in the late 2000s, showing how we may be on the brink of another catastrophic crisis. Mitchell's character-driven narrative is required reading for anyone wanting to understand the central economic issue of our day.
