Oh, please!(the ECONOMIST) (student loans) (Viewpoint essay)

• Author: Adams, Tucker Hart

I'M GETTING VERY TIRED OF THE HEADLINES and hand-wringing about student debt. I realized how strongly I feel when a business professor whom I respect started in on the subject at a recent board meeting and burst out. "That is such a bunch of BS!"

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I assume the statistics we see quoted claiming $902 trillion in federal student loans for education, along with another S140 billion in private loans, are correct. I don't doubt that 94 percent of those earning a bachelor's degree borrow to help pay their tuition, double the figure 20 years ago. And, yes, education debt exceeds the $820 billion Americans hold in revolving credit (primarily credit. card debt). Incidentally, revolving credit has fallen almost 20 percent since 2007. Americans really have made progress getting their financial house in order.

Do student loans mean young graduates have to put off buying a home fir a few years? Probably. But where did we get the idea that one has a right to be a homeowner in his twenties? 1 remember a conversation with a German central banker in Denver on business who was shocked to find out that anyone under 40 could afford to buy a home.

Certainly many young people moved back in with their families during the Great Recession and its aftermath 10 save money. But they aren't just new graduates with college debt. It's happening in every category. Unlike when I was that age, living with one's parents is now quite acceptable among one's peers, perhaps even the "smart" thing to do. And I'm guessing those young people aren't delaying the purchase of a car in order to pay their other bills.

The basic problem is that we keep referring to student loans as "debt." Technically, of course, that is true. But in reality it is an investment, an investment in human capital, to use the economic term.

How large an investment? According to the New York Federal Reserve Bank it averaged $23,300 in 2011, with 87 percent owing less than $54,000 and only 3 percent owing more than $100,000. It's that 3 percent who get featured in the horror stories.

What is the return on that investment? For starters, an unemployment rate of 3.9 percent at a time when high school dropouts face an unemployment rate of 13 percent and those with only a high school...