Geraldine Damiani Brezler took out a $5,000 student loan in the late 1960s to study at the State University of New York. She became a nurse, got married, bought a house and repaid the debt in less than three years.
Today, her son, David, 38, owes about $85,000 in loans for a master's degree in education at New York University. He can't find full-time work, lives with his parents in White Plains, New York, and has deferred paying his debt for three years.
The financial-aid odyssey of two generations of Brezlers tracks the history of U.S. student loans, which, like the home mortgage, helped define the American dream. In the early years, the loan program let ambitious teens take on a small debt that could pay off with a lifetime of higher earnings. Now, the $1 trillion in outstanding student debt has become a drag on the economic recovery, a flashpoint in the presidential election and a threat to the egalitarian ideals of U.S. higher education.
"It's like waking up to a snarling wolf every morning," said David Brezler, who spends his days searching job listings, following up by email and phone and taking on short-term consulting jobs. "The idea of buying a house — it's completely inconceivable."
How did a once-modest federal program spiral out of control, weighing down low- and middle-income families like the Brezlers that it was designed to help?
The answer echoes both the health-care and mortgage crises. As college costs have soared faster than the rate of inflation over the past four decades — reaching $60,000 a year at the most expensive private schools — Republicans and Democrats alike postponed a reckoning. They encouraged borrowing and ignored surging tuition, leaving loans to balloon to the size of mortgages, shocking even the system's own architects.
"No one ever conceived this was a way to create a debtor class of former students, the indentured student," said Tom Wolanin, who worked on federal higher education policy for 30 years and was a deputy assistant education secretary in the Clinton administration.
Politicians of all stripes ignored repeated warnings that the day would come when debt would become unsustainable.
"The path of least resistance was to have the student borrow more," Wolanin said.
Congress, during the administrations of Jimmy Carter, Ronald Reagan, George H.W. Bush and George W. Bush dangled more credit to more families. The U.S. raised the total amount that dependent students could borrow during their college careers to $31,000, up from $7,500 when the loan program began, according to an April Congressional Research Service report. Under certain circumstances, the limit for dependent students is even higher.
In the final stretch to this year's presidential election, college costs and debt are looming larger than ever. In a January speech at the University of Michigan, President Barack Obama proposed rewarding schools that control costs with access to more loans and grants. In June, at the University of Nevada, Las Vegas, he touted an executive order that eases the application process for a loan program that lets students make lower payments tied to their incomes, stretching them over decades.
"I want to make it easier for more students like you to earn a degree without shouldering a mountain of debt," Obama said.
In his education plan released in May, Republican presidential candidate Mitt Romney said Obama's financial-aid initiatives encourage students to take on more debt, "claiming to help them today and then sending them the bill tomorrow." Romney advocates cutting education regulation and encouraging colleges to become more efficient, lowering costs partly through the use of online instruction.
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