The Truth About the Student-Loan Debt Crisis

Journalism in the public interest.
May 18 2012 4:08 PM

Happy Graduation! Now, About Those Loans …

Here’s what you need to know about the state of student debt.

US President Barack Obama speaks with graduating seniors and their parents during a roundtable discussion on the interest rates of federaly subsidized student loans at Washington-Lee High School in Arlington, Va., earlier this month.

Saul Loeb/AFP/GettyImages.

Outstanding student loans now top $1 trillion, more than the nation’s credit-card debt. ProPublica has  rounded up some of the best explanatory and investigative journalism on student debt.  Anyone can contribute by tweeting a link to a story and just including the hashtag #MuckReads or by sending an email to

ProPublica also reports on student debt on an ongoing basis. If you’re struggling with your loans, they would love to hear from you.

Degrees of Debt, New York Times, May 2012
This sweeping overview of the state of student debt, and its effects on students and their families, includes a useful interactive that lets you discover the average student debt at your alma mater.


The “Small” Numbers on the Student Loan Interest Hike, Ed Money Watch, April 2012
In July, the interest rate on some federal student loans is set to double. But is the outrage overplayed? This piece breaks down student loan interest rates by the numbers; the author also appeared on Marketplace to discuss the same issue.

Student Loans: Is There Really a Crisis?, Time, May 2012
Before giving up on college altogether, you may want to take a look at some of the stats in this piece by Andrew J. Rotherham, who also runs the EduWonk blog. The Atlantic’s Derek Thompson echoed his points in a quick post that included a helpful graphic on the share of student-loan debtors by amount. 

Seeking Arrangement: College Students Using “Sugar Daddies” To Pay Off Loan Debt, Huffington Post, July 2011
As student debt soared and jobs became scarce, some students and recent grads turned to an alternative method to pay off their loans: websites that pair the smart and broke with “wealthy benefactors” who might help with the bills in exchange for sex.
Contributed by @BostonReview

Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans, Bloomberg, May 2012
The government relies on a little-known pool of collection agencies to recoup student loans made by banks and other private lenders. They can counsel a borrower to avoid default, but they receive massive amounts more for collecting defaulted loans–up to 37 percent of a borrower’s entire loan amount, half in collection costs and half in taxpayer-funded commissions.
Contributed by @KYWeise

Obama Relies on Debt Collectors Profiting From Student Loan Woe, Bloomberg, March 2012
The private debt-collection companies helping the Education Department recoup $67 billion of defaulted student loans made about $1 billion in commissions last year , while also facing growing complaints that they’re forcing troubled borrowers to pay more than they legally owe.
Contributed by @paulkiel

Unrepaired Education Department System Leaves Thousands Stuck in Default, Chronicle of Higher Education, April 2012
After the Chronicle reported on problems with the government’s debt-management system in December, the Education Department promised to fix the issues. Checking in, they found thousands of borrowers still stuck in default, even though their loans should have been restored to good standing and their credit histories cleared. ProPublica also chronicled issues with changes in the servicing of federal student loans in April 2012.

Education Department Bureaucracy Keeps Disabled Borrowers in Debt, ProPublica, February 2011
Students who become severely disabled are entitled to have their loans forgiven, but our reporting found big problems with the Education Department’s review program – and refusal to adopt a basic reform .

NYU Students: Debt and Debtor, Village Voice, September 2011
NYU is on a “multi-decade spending spree,” but as tuition has skyrocketed, financial aid hasn’t kept up. When the Village Voice story was published in 2011, NYU ranked No. 1 in student debt, with the exception of for-profit colleges. This piece gives a nice overview of NYU’s hefty price tag came to be—and why students keep paying it.
Contributed by @seleross

ProPublica education reporter Marian Wang helped curate this list.


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