Are Millennials Responsible for Their Own Student Debt?

Most college students borrow responsibly but the media can't stop showcasing people whose behavior is inexplicable and indefensible.

As the father to sons who are 25 and 17 years old, I love millennials and Generation Z. But it's getting harder and harder to feel sympathy for kids born between 1981 and 2012 (give or take).

It's not all—or maybe even mostly—their fault. Much of the problem stems from the ways in which the media covers the plight of younger Americans, especially the supposedly catastrophic amount of student loan debt they have taken on simply to get a college degree which is now, we're told, a nearly meaningless piece of paper that no longer "automatically" guarantees admission to the "middle class." A recent story in The Wall Street Journal exemplifies this approach. It's titled "Playing Catch-Up in the Game of Life: Millennials Approach Middle Age in Crisis" and promises "New data show they're in worse financial shape than every preceding living generation and may never recover." Mostly, it highlights individuals and couples who have tons of student debt and, as a result, supposedly can't buy houses, have kids, or even get married.

In fact, it's far from clear that crude economics is driving, say, the reduction in fertility rates, which have been dropping for decades everywhere in the world and are tied to increases in female autonomy. And for all the talk about generational poverty, it's not immediately clear that all is darkness. According to a Pew study in 2018, millennial households now "match the highest household income for their age group." Throw in higher rates of advanced education, and the future actually looks promising. And it appears that millennials may be better off in various ways than Gen X was at the same stage of life.

In any case, there is so much wrong with the narrative about student loan debt that it's hard to know where to start. In the first place, more people, including more low-income people, are going to college than ever before and college grads have much higher lifetime earnings and much lower unemployment rates than folks with just a high school diploma, an associate's degree, or a few years of college. As the economist Scott Winship has written, "If we're counting rising student indebtedness on the debt side of the ledger, shouldn't we count the value of the asset financed by the debt (human capital) on the asset side?" And despite the aggregate $1.5 trillion out there in student debt, the average and median amounts owed by individuals students are hardly breathtaking.