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The K-Shaped Student Loan Story
Not all borrowers are in crisis.
A while back, I wrote a story called There Is No Student Loan Crisis. In that article, I argued that use of the “crisis” was extreme, and the entire situation was vastly overblown.
There was some truth to that article, but there was also some lack of awareness on my part.
With the pandemic leading to suspension of federal student loan payments and interest since March 2020 and continuing through at least September 2021, I’ve had some time to rethink my position.
Plus, I’ve had some verbiage added to my financial lexicon: “K-shaped”.
This phrase has been most often used by the Biden administration to describe the bifurcation of financial benefits as the country recovers from the vast swath of economic ruin wrought upon the populace by the pandemic-induced lock downs, but it also accurately describes the similar splitting of financial benefits received from the use of student loans.
In both cases, the end result has been that those who needed the help the least received the most benefits.
- In the case of the economic recovery, most of the financial gains in the stock market has gone to the top 10% of earners, as they hold 84% of shares.
- In the case of student…
