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The WSJ Cries for the Wrong Victims of Student Debt

Tuesday night, the Wall Street Journal undertook the commendable task of calling attention to the student debt crisis. The article opens with the tearjerker story of a young couple whose dream is to create plastic cupcake toppers “in the shapes of zombies, bikes and deer antlers” and the like. Tragically, John and Christine Carney, ages 31 and 29 and both currently students at the University of Maine, can’t afford the business loan for the laser cutter their ambition requires. “Instead, they use a university-owned laser cutter, which limits the size of the acrylic sheets they can work with.” Thus, their innovative, entrepreneurial spirits are crushed by student loans, and countless Americans are robbed of the tiny, plastic ninjas and eyeglasses that could have adorned their cupcakes.

I shouldn’t make fun. The article reports the Carneys have $140,000 in debt between them—no small sum for people who are determinedly working toward degrees in zoology and fine arts. But why the Journal thinks the deterrence of projects like this one, and, in general, business schemes cooked up in the brains of 22-year-olds, best captures the pathos of the student loan saga, I truly couldn’t say. Federal loan debt alone surpassed $1 trillion this summer. And in my experience, startups run by 20-somethings don't need much encouragement. 

The article points out, “Recent graduates and college dropouts account for a disproportionate share of the founders of technology startups that have transformed the economy over the past decade.” I guess there’s always the risk that the next Jack Dorsey or Bill Gates will go work for The Man because he’s neck-deep in loans. (In the interest of full disclosure, the editor-in-chief of The New Republic is a college entrepreneur and co-founder of Facebook.) That said, the flashes of genius student loans could deprive us of, according to the WSJ, include—in addition to cupcake toppers—“gluten-free hot cereals” and “a tool for managing social media.” At the college I attended, the highest placing projects in a startup-inspired “student app contest” included the “One Button Wenzel,” an interface with a single button that summoned a popular late-night sandwich. I’d argue that one of the worst pathologies of my generation is the mythic significance it attaches to founding your own company; the fact of having or joining a startup seems to matter to us far more than what the thing actually does. In the vast majority of cases, I’m convinced, we sapling 23-year-olds don't yet need to be the boss.

Student loan pathos is a pretty wide target, but, somehow, the WSJ still managed to miss. Besides hot cereal and social media, the things loans frequently put the kibosh on include: going to a private or out-of-state college, majoring in the subject you’re really passionate about (if it’s not something eminently practical, such as engineering), getting married, buying a car, buying a house, and having kids. If you want to know why it’s a problem that our astronomically expensive higher education system forces about 60 percent of college students to borrow their way to a degree, read about people like Kyle Laffin of Norwell, Massachusetts, who “asked his dad to co-sign a $100,000+ private student loan for a B.A. in accounting. Now, he has $1,200 monthly payments. His dad is working two jobs and dipping into his retirement savings to help him pay it down.”

According to the Journal piece, some groups are pushing for official policy to alleviate the suffering of young entrepreneurs. For example, “the Rhode Island Student Loan Authority, a quasigovernmental nonprofit group, is looking at whether it is feasible to temporarily forbear or reduce payments for recent graduates who start a businesses or go to work for a new venture.” To some extent, this is compatible with a policy the Obama administration has already put in place, whereby student debtors can pay back federal loans at a rate determined by their post-graduate income. But as for creating a separate bailout for all those Silicon Valley wannabes, it seems to me there are others out there who are more in need of a helping hand.

Nora Caplan-Bricker is an assistant editor at The New Republic. Follow her on Twitter @NCaplanBricker.