The American student loan crisis is often seen as a problem of profligacy and predation. Wasteful colleges raise tuition every year, we are told, even as middle-class wages stagnate and unscrupulous for-profit colleges bilk the unwary. The result is mounting unmanageable debt.
There is much truth in this diagnosis. But it does not explain the plight of Liz Kelley, a Missouri high school teacher and mother of four who made a series of unremarkable decisions about college and borrowing. She now owes the federal government $410,000, and counting.
This is a staggering and unusual sum. The average undergraduate who borrows leaves school with about $30,000 in debt. But Ms. Kelley’s circumstances are not unique. Of the 43.3 million borrowers with outstanding federal student loans, 1.8 percent, or 779,000 people, owe $150,000 or more. And 346,000 owe more than $200,000.