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> Bottom line: with so many borrowers set to default on their student loans, those who can't make ends meet will be able to pay roughly 10% of their income for 25 years. The remainder, such as Mark Meru's $2 million balance, will be an obligation of the United States taxpayer.

Is this generally true now? I mean, "10% of income for 25 years"? That's not so bad, really. Only half of 20% income tax bracket.

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That's not so bad, really.

That 10% is what middle-income people would typically use to save for things like a 401k, a house deposit or a car. If people can't afford those they'll be much poorer in retirement, stuck renting for much longer which will keep them poor, and for many it'll mean they choose not to have children because they're financially unstable. On an individual level these things are unfortunate; on a societal level they're catastrophic. An aging population can ruin an economy. Tax receipts don't cover basic services. It's happening in many places already (Japan, UK, etc).

It's not so bad for the individuals who are paying 10% of their income, it is bad for US taxpayers who are as I understand this article collectively liable for that burden in 25 years.

I get that. It's just that this is the first coverage that I recall which doesn't focus on unemployable graduates.

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