The student loan crisis is a myth.
So say Nicole Allan and Derek Thompson, who argue in this month's issue of The Atlantic that the economic returns of college far outweigh the burden of student loan debt.
"Horror stories of students drowning in $100,000+ in debt might discourage young people from enrolling in college, but they are as rare as they are terrifying," Allan and Thompson wrote in the article. "The economic value of college, meanwhile, is indisputable."
Allan and Thompson looked for crisis in the wrong places. Six-figure calamities are indeed rare, but millions of Americans are caught between stubbornly weak labor markets and increasingly costly higher education.
1. The employment prospects for young grads are pretty gloomy. According to an Associated Press analysis, 53 percent of recent college graduates are either unemployed or not putting their degree to use.
2. Because of the weak job market, borrowers are struggling more and more to keep up with payments. According to TransUnion, federal student loan delinquencies shot up 27 percent between 2007 and 2012. (Private loan delinquencies dropped 2 percent.)
3.Ddon't expect the problem to go away once the economy picks up. As Campus Progress recently reported, the growth in Americans with degrees is far outpacing the growth in jobs that require them, meaning jobs that offer a secure path to debt repayment will become ever more competitive.
4. But repayment is already causig hardship: 13 percent of students whose loans came due in 2009 to default on their debt by 2012. Another 26 percent are delinquent, on the cusp of default.
5. It's not just a debt crisis—it's an affordability crisis.
CNN Money found that the cost of attending a public university has more than doubled since 1988, even as Americans' median income stagnated. If our incomes had kept pace with the cost of higher education, the average American would now make $77,000 yearly.
Finally, the cost of college prevents many low-income Americans from even seeking a higher education. Forty-eight percent of adults aged 18 to 34 without degrees told the Wall Street Journal that they can't afford to go to college.
Among high schoolers who score highly on the SAT and ACT, 80 percent of kids from wealthy families go on to get college degrees, compared with just 44 percent of those from low-income families. Student loan debt not only makes life miserable for many graduates, it prevents some Americans from even setting foot on a college campus. That's what we call a crisis.