Does More Debt Lead To Fewer Babies?

Romper, a website for young mothers, asks a good question.

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Is crushing student debt a big factor in millennials’ not having children? Its answer is yes. Members of the class of 2016 left school owing an average of $37,173 in student loans. And that “doesn’t calculate the average amount of interest and dollars that will be added on over time,” the site notes.

The U.S. birthrate fell to another record low last year, the National Center for Health Statistics reports. Most startling, the actual number of births was down by 500,000 from 2007 — even though there were 7 percent more women in the child-bearing ages of 20 to 39.

Pummeled by the Great Recession, today’s 18-35-year-olds face persistent economic insecurity. Wages have only inched higher. The federal guarantee for health coverage may soon collapse. Pile on the burden of student loans and one can understand the reluctance to take on parenthood.

The $1.5 trillion mountain of student debt now threatens the broader economy. Nearly 5 million federal student loans are now in default. Their credit ratings pounded, many of the debtors can’t borrow for a house or a car. A Federal Reserve Bank of New York report blames student debt for up to 35 percent of the drop in homeownership among people in their late 20s.

Are the leaders in Washington doing anything about the crisis? Yes, they’re making it worse. Regulators had begun to curb the worst abuses and excesses of the student loan industry. Then the Trump administration happened.

Memo from Mick Mulvaney, temporary director and avowed destroyer of the Consumer Financial Protection Bureau: “The office of ‘Students & Young Consumers’ will be folded into the office of ‘Financial Education.'” Translation: The bureau will stop focusing on cruel student lending practices and instead provide more consumer information. This is good news for Navient, the nation’s biggest student loan company. Navient had been in trouble for allegedly tricking young people into taking unnecessarily high-cost loans.

You see, Navient had promised on its website to help students find the best loan deals. In practice, it herded low-income students into the more expensive options. Here was Navient’s remarkable excuse for its false promises to help consumers: “These are general marketing statements,” a Navient lawyer told a Pennsylvania judge. “It’s friendly talk. It’s puffery. But it is not the stuff of a legal obligation to now become your financial counselor.” So much for financial education.

Student loan collection companies, meanwhile, have been overcharging borrowers through processing delays and “billing errors.” Several states are trying to curb these outrages. The Trump administration is trying to stop them, warning states that they are stepping on federal authority.

Elsewhere, Education Secretary Betsy DeVos is killing investigations into possible fraud by several large for-profit colleges. One of them, then known as DeVry Education Group, agreed in 2016 to pay $100 million to settle a federal suit alleging it had duped potential students about their job and salary prospects upon graduation.

DeVos last summer chose the former dean at DeVry to supervise the “investigation” team. Guess what. The probe into DeVry stopped.

The borrowers are not entirely blameless. They often fail to assess how much debt they are taking on and for what. But even the sophisticated can get trapped by slippery sales talk and ugliness in the fine print. It’s in the national interest to rein in the worst kinds of consumer deceit.

Young Americans striving to better themselves are the very people we should want to raise a next generation. How sad that so many, carrying the elephant of student debt on their backs, are opting out. Does the future matter in Washington?

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