News coverage about student debt is piling up, just like the student debt itself. But the people who are struggling the most with student debt aren’t the ones you may expect, explains Susan Dynarski, professor of public policy, in an interview with Elissa Nadworny of WAMU.
In the July 9, 2019 article titled “These are the people struggling most to pay back student loans” Dynarski said “The people having problem with their debts are those who dropped out of school after just a few courses or a year.”
She attributes this trend to students who attended for-profit college, who often have “little education, lots of debt” because of the high dropout rates at those institutions. When students acquire debt, but not degrees, they don’t have the means to pay it off. “If you look at the likelihood that someone is going to default, it actually drops as debt goes up,” Dynarski noted. “That sounds completely counterintuitive, but that’s because the missing piece here is earnings. You can’t pay off a debt if you don’t have any money.”
Susan Dynarski is a professor of public policy, education and economics at the University of Michigan, where she holds appointments at the Gerald R. Ford School of Public Policy, School of Education, Department of Economics and Institute for Social Research and serves as co-director of the Education Policy Initiative. She is a faculty research associate at the National Bureau of Economic Research and the Center for Analysis of Postsecondary Education and Employment. She is a nonresident senior fellow in the Economic Studies Program at the Brookings Institution. Dynarski earned an A.B. in Social Studies from Harvard, a Master of Public Policy from Harvard and a Ph.D. in Economics from MIT.