There was a time when conventional wisdom said that student debt is not a problem in and of itself—rather, “high” debt of $100,000 or more is the more pressing concern. A recent report from the Federal Reserve Bank of New York highlights just how out of touch that view is. A staggering percentage of Americans do not pay their student debt, no matter how big or small.
Analysis reveals that 34 percent of students with just $5,000 of outstanding debt—hardly “high”—default on their student loans. Student debt imperils far more than just individual borrowers’ monthly budgets. It erodes higher education’s ability to deliver on the promise that those who have similar abilities and work equally hard will achieve similar outcomes. Unfortunately, the prevailing policy response—Income-Based Repayment (IBR) plans—does not address the core of the problem.
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 plans—does not address the core of the problem of why people are not repaying their student loans.){kind=link}