Do student loans cause income inequality?

Posted on February 14, 2013 by

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Do student loans cause income inequality?

Engineering Professor - complains about the destructive effects of capitalism requiThe distribution—and redistribution of income—is back in the news. The Economist reported on study of the persistence of income distribution from generation to generation, which generated some discussion.

Then, Gary Becker and Richard Posner jumped into the debate with some often overlooked observations.  Judge Posner, however, flag a growing problem that is just getting some attention:

And it must be borne in mind that some programs that purport to reduce inequality, such as the federal student loan program, may well increase it, by imposing debt burdens disproportionate to the value of the education that they finance.

Seems only a few years ago, the discussion of higher education focused only on the benefit side: How much more money will you earn with a BA, MA, or Ph.D.? Now, the discussion starting to turn to the costs: Will the bump in income more than offset the additional cost of debt?

Do student loans cause income inequality? | Economics International Blog.

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Posted in: Debt, Economy