In my last column published here on October 12th, I argued that the current student loan market is different than other types of loans. Unlike other loans, government intervention in the student loan market has distorted the price (interest rate) and quantity (available funds) of loans. This is what I believe is the primary cause of the student debt crisis facing Americans today, and why I am in favor of the government cleaning up the mess with debt forgiveness.
But the government’s current debt forgiveness plan is only a temporary solution. This is a short-term bandage on the market with fractures that require a long-term reset.