Two new books argue that student debt is a more nuanced issue than we are often led to believe.

Two books by two economists, who are colleagues at the Urban Institute, point out that the people carrying the highest level of debt also tend to be the folks with the most advanced degrees... that is, the people with the greatest ability to repay the loans.

On the other hand, the authors seem to agree, the most heavily burdened, and most likely to default, are the college drop outs.

This analysis seems to comport with the US Department of Education's stance against the for-profit sector of higher education, if I understand what is happening to outfits like ITT and Corinthian Colleges, which went out of business because their access to the federal loan stream was cut off.

I have repeatedly argued in this space that the business model of many a for-profit entity has been (1) entice marginal applicants to apply and borrow from Uncle Sam to attend; (2) sign them into some courses and collect their tuition money; (3) let them flunk out.  The loan dollars become profits at the bottom line of the company.  The ex-students default.  We the taxpayers pick up the tab.

I'm not saying all for-profit higher-ed entities have done this.  But I have no doubt some have done it to their own enrichment.

My view is supported by this excerpt from a story published two years ago by Inside Higher Ed:

"What led so many companies astray is a story of strategic choices made at the height of the 2000s boom. Faced with the means to achieve infinite scalability by tapping into a federal entitlement program, the opportunity to use online learning to cut costs, and motivated by Wall Street cash and its accompanying investor pressures, several companies pursued hypergrowth at all costs. They moved away from traditional missions, pursuing any and all students they could through sophisticated recruitment machines designed to feed the neverending demand for hitting enrollment and earnings targets.
"U.S. Department of Education data on students who left school in 2008 and 2009 at the peak of the for-profit college boom show just how bad the strategic emphasis on growth over quality has been. In total, 40 percent of programs offered by publicly traded companies, representing 48 percent of for-profit students in the data, fail one or both of the tests of debt-to-earnings and student loan default that the Education Department is proposing to use to judge the success of career training programs. This includes 44 percent of students enrolled in colleges owned by the Apollo Group, which runs the University of Phoenix. It also includes 90 percent of students at ITT Technical Institutes."

Thus, as the two new books argue, the so-called student-loan "crisis" is not a calamity across all of higher education, but rather a more focused tragedy for those who borrowed perhaps far less than their successful counterparts, but also are far less capable of making good on their debts.