From the NYTimes – Once again, the headlines are filled with claims that student loans are bad. Several articles have highlighted results from a Gallup poll that shows that college graduates who borrow for college are less happy, healthy and wealthy than debt-free graduates. The Gallup report (which is cautious in its interpretation of the data) has been drawn into a rising chorus of news media reports on the negative consequences of borrowing: Student loans not only make you sick but also hamper homeownership and delay marriage.
Student loans need reform. But recent reports obscure the key benefit of borrowing for college: a college education.
The highlight of the Gallup report is a comparison of the well-being of college graduates who did not borrow and those who borrowed more than $50,000. As I discussed in this New York Times article in June, 43 percent of undergraduates borrow nothing, and 98 percent borrow less than $50,000. The report is therefore comparing the 43 percent of undergraduates who borrow nothing with those with the highest debt loads.
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