That last sentence stayed with me. I have been researching what’s been happening to recent law school graduates, and it’s no exaggeration to describe the situation as a growing catastrophe. The statistics are shocking:

Approximately half of the 45,000 people who will graduate this year from ABA-accredited law schools will never find jobs as lawyers. (The Bureau of Labor Statistics estimates that over the next decade 21,000 new jobs for lawyers will become available each year, via growth and outflow from the profession.)

Most of those who do find jobs will be making between $30,000 and $60,000 per year.

People currently in law school are going to graduate with an average of $150,000 of educational debt. This debt will have an average interest rate of 7.5 percent, meaning the typical graduate will be accruing nearly $1,000 per month in interest upon graduation. Unlike almost every other form of debt, these loans cannot be discharged in bankruptcy.

In short, one out of every two law graduates will not have a legal career, and most of the rest will never make enough money to pay back their educational loans. This means they will either have to rely on other sources of income (spouses, extended family) to service their debts, or they will have to go into the federal government’s new Income-Based Repayment program. This program will keep people in debt servitude for 25 (soon to be reduced to 20) years, during which time the balance on their loans will grow, making it almost impossible for them to qualify for mortgages and many other forms of consumer debt. Finally, the debt – which for many law graduates will have grown to more than $1 million – will be discharged, meaning, of course, that taxpayers will be left to pick up the tab.

All this adds up to a completely unsustainable system – one in which the cost of acquiring a law degree no longer bears any rational relationship to the benefits the typical graduate can expect to receive from it. In this regard, the economic disaster that legal education has become is merely a particularly stark example of the increasingly absurd financial structure of higher education in America.

How did we get into this mess? The basic problem – one that goes far beyond the growing crisis inside America’s law schools – is a product of two related myths. The first is that educational debt is almost axiomatically “good debt” – that is, the sort of debt that will generate a positive return on investment. The second is that the market for higher education is rational and efficient.

For generations now, Americans have been told that it always makes sense to invest in higher education for themselves and their children. This belief was so strong that it had three unfortunate consequences: It convinced politicians and taxpayers that there was no good reason to subsidize public higher education (if people were going to enjoy such a good return on an investment why should the government subsidize it?). It encouraged colleges and universities to adopt a business mentality, which increasingly led these institutions to make revenue maximization their top goal. And it led the purchasers of higher education not to ask hard questions about whether what they were buying was worth the price they were being asked to pay for it.

It is true it is more realistic to expect prospective law students to try to determine the real net present value of attending law school than to expect high school students to make the same calculation regarding a college degree. Still, in the case of law schools the ceaseless message that more higher education is always worth the cost has combined with the misleading reporting practices regarding employment and salary outcomes to produce a classic case of severe market failure: Most law students now pay far more for their degrees than those degrees are worth.

The result has been several consecutive decades of rising costs in real dollar terms. Law schools provide a particularly stark example of these trends:  A generation ago, as measured in 2012 dollars, annual tuition at Harvard Law School was $12,500 per year. Resident tuition at my alma mater, Michigan Law School, was $4,400 per year, again in current 2012 dollars. Today the respective figures are $51,000 and $48,000.

Despite the rhetoric of self-interested and/or clueless academics, higher education is not “priceless.” At some point, the cost will come to outweigh the benefit.  That point has already been reached for countless university graduates in general, and law school graduates in particular. As prospective students and their families become aware of this fact, our debt-fueled higher education bubble, like so many other financial bubbles before it, will pop.

For three decades the cost of attending college anywhere — public, private nonprofit, or for-profit, Ivy League school or community college — has risen significantly faster than the rate of inflation. But the sharp acceleration over the last 10 years — and particularly since the onset of the Great Recession — has stoked a new wave of widespread anxiety over an impending “crisis” in higher education. The unrelenting cost hikes also explain why government aid for college students has become such a hot topic in this presidential campaign year. Even as the government continues to print money and throw it into the breach, the hole just seems to gets bigger. Total student debt is now over $1 trillion and rising.

In fact, for some critics, access to “easy government money” is the real problem, not the solution. No less an authority than House Budget Committee Chairman Paul Ryan, explaining why he wants to cut Pell Grants and reduce the availability of government-backed student loans, claims “there is evidence that subsidized lending contributes to tuition inflation.” Just last month, Moody’s Analytics chief economist Mark Zandi told the Associated Press that government loans and subsidies don’t work because “universities and colleges just raise their tuition. It doesn’t improve affordability and it doesn’t make it easier to go to college.’’

For some of these critics, the solution to higher tuition costs is to take government out of the education equation altogether; to allow the market to provide “innovative,” cost-effective alternatives to old-school brick-and-mortar-style higher education. Online learning, for example, could theoretically provide students with a cheap end-around to the existing establishment. There’s an intuitive attraction to this approach that crosses party lines. We’ve already seen the Internet wreak havoc on the music business and publishing industry by fundamentally changing the economics of content delivery. Why can’t it do the same for education?

Maybe it can, and will, in the long run. But before signaling a full-scale retreat of government from the higher education fray, it’s important to look a little more closely at the simplistic claim that “easy government money” is fueling higher costs. While there are certainly some sectors of higher education in which there is a clear relationship between student loans and higher tuitions, for the great majority of college students the problem isn’t that the government is giving them too much money. Quite the opposite: It’s the collapse of direct government support for higher education that is the main driver of higher tuition costs.

“The reality is that student debt is not rising because the government is putting more money into higher education,” says Kevin Carey, policy director at Education Sector, a Washington-based nonpartisan think tank. “It’s rising because the government is putting less money into higher education.”

The first step in grappling with the rise in the cost of higher education requires understanding where students go to school. There are three main categories — public schools (which include both four-year public universities and two-year community colleges), private nonprofits (the Ivys, most liberal arts colleges, etc.), and the for-profits (Kaplan, University of Phoenix, Corinthian Colleges, aka “career schools”). Here’s the key statistic: Fully 70 percent of the 19 million undergraduates and 3 million graduate students enrolled in post-secondary education in 2010 attended schools considered to be in the public sector — by which it is meant that some portion of their funding comes directly from government.

The problem: The word “public” doesn’t mean as much as it used to. Direct state support for public colleges has cratered over the past 10 years, and really fell off the cliff after the financial crisis. Yes, tuitions have risen, but not by as much as state and local appropriations for higher education have fallen. Just between 2008 and 2009, for example, average tuition revenue at public research institutions increased by $369 per student, but the loss in state and local appropriations per student was $751. Similarly, at public community colleges, tuition revenue rose by $113 per student, while appropriations fell by $488. Since the recession of 2001, tuition hikes, as exorbitant as they have been, still haven’t kept pace with the fall in government support.

The bottom line: For the large majority of college students, rising tuitions have nothing to do with the availability of student loans or Pell Grants. What’s happening, instead, is that the burden of paying for college that was previously provided directly by government has now been shifted onto the backs of students, in the form of crippling debt.

The picture becomes a bit more complicated when one considers private nonprofits, which don’t get government support, but where tuitions have also been rising, if at a slower pace than at public schools. There’s an argument to be made that one explanation for why college costs have consistently risen faster than inflation over many decades has to do with the built-in resistance that the education sector has to the kind of productivity increases that result in lower prices in other industries. You can’t outsource teachers to China like you can iPhones or blue jeans. You need talent to operate a full-service college, and there’s a lot of competition for the talent, and so prices keep going up. While there are some problems with this argument — such as, do schools really need to have as many administrative personnel as teaching personnel? — the private nonprofit sector is where this argument seems to hold mostly true. Generally speaking, the private nonprofits are more or less immune to the same market forces that result in economies of scale elsewhere. This is particularly true for elite schools, where astoundingly high tuition gets tremendous public attention. So what? If you’re turning away 75 to 80 percent of your applicants, what possible reason do you have for lowering tuition? Quite the opposite: Keep hiking it! The kids will continue to apply!

Of course, deserved or not, our culture places a lot of value on a degree from an elite institution, which further maintains their ability to charge as much as the market will bear. The same is not true for the rapidly growing for-profit sector, which has burgeoned in size over the last 15 years despite not delivering much that anyone values.

One out of every 10 American college students now attends a for-profit school. And there is absolutely no question that those schools’ entire business model is built on the availability of student loans. Eighty to 90 percent of for-profit revenue comes from government aid — and it would probably hit 100 percent if not for a government regulation capping the total percentage of revenue allowed to come from government aid at 90 percent.

“It’s very, very clear,” says Carey. “The for-profits set their prices to whatever the maximum federal loan limit is. They charge as much money as students can borrow. ”

As has been amply documented, the for-profit sector also does a horrible job of actually educating students. For-profit students are more likely to drop out and much more likely to default on the debt they accumulated while failing to get a degree.

The dependence of the for-profit sector on government money poses a bit of a conundrum for Republicans who decry “easy government money,” because ideologically, Republicans are big fans of the for-profit sector, and fight hard to keep it free of government regulation and oversight. Yet it is precisely here that the system is most screwed up. When profit is the goal, and government looks the other way, students are the losers.

One informative, market-based method for comparing public, private and for-profit schools, suggests Lauren Asher, the president of the Institute for College Access and Success, is to look at the “net price” charged by institutions. Posted tuition rates don’t actually give a very clear picture of what a college actually costs to the person writing the check. The “net price” subtracts whatever grants are provided to the student directly by the school or government from total tuition (but does not include student loans).

The most recent data is eye-opening. The net price of attending one year at a four-year public school in 2009-2010 was $10,175. At a private nonprofit: $16,672. And at a for-profit school? A whopping $23,771. In fact, says Asher, the data indicates that in the last couple of years, the net price of attending public schools has held even and in some cases declined slightly, despite tuition hikes. Asher says that even as state appropriations plummet, schools are finding ways to cut costs and plow whatever cash they have available back into aid for low-income students. The data seems clear: If you’re looking for a bargain, your best bet is still state-supported education.

So what does all this mean in the big picture? In a perfect world, the easy answer would simply be to restore direct government support for higher education. There are still clear economic rewards to getting a post-secondary school degree, making government support of education a good investment for future economic growth and prosperity.

Unfortunately, in the realpolitik of today’s revenue-constrained, tax-averse governments, that simply isn’t politically feasible. Way back in 1978, California pioneered the future that we all currently live in when voters passed Proposition 13 and severely restricted the ability of the state to raise taxes. As a nation, we’ve voted with our taxpayer wallets: We are no longer willing to fund massive direct investments in our future.

Carey holds out hope for alternative providers of education that leverage the Internet’s huge advantages to provide instruction at low cost. Although some of the for-profits, most famously the University of Phoenix, have already been conducting classes online for years, they aren’t doing so with the goal of lowering costs for students, but rather to maximize their own profits. They’re essentially exploiting the Internet to deliver product as cheaply as possible on their own bottom line, but charging top-line prices to consumers that force massive borrowing.

There’s a clear role for government to play here, says Carey, both in restricting the abuses rampaging through the for-profit sector and in realigning incentives that constrict student and educational facility flexibility. For example, he notes, you can’t get a student loan to take a single calculus course from whichever professor might specialize in delivering the best online calculus course in the world. There’s no current way to get government aid for mixing and matching credits from different educational providers that can ultimately be assembled into a full degree.

Carey points to new, free online education initiatives from MIT, Harvard and Stanford that promise to revolutionize the education business by offering high quality at extraordinary low costs. These elite institutions pose no threat to their own operating model — there will always be plenty of students seeking the validation of a brick-and-mortar degree from Harvard, but they carry massive potential to destroy, or at least severely constrain, the for-profit model of education. We may one day look back at the current era and wonder how in the world the for-profit schools ever got away with charging such huge fees. And of course you won’t need a student loan to pay for a free online circuit engineering course put together by MIT.

How close that future might be is anyone’s guess. For now, you can’t get a transferable college credit from the MIT/Harvard initiative — exactly the kind of problem government needs to help solve. But for now, as Republicans and Democrats continue to squabble over how to pay for low interest rates on student loans or how much money to put into the Pell Grant program, we should remember that the real story here isn’t how much students are borrowing, but how little government is doing to help.

“Dear New York City. We the students of public education are here to inform you of the injustice that is taking place in our school system,” he begins, surrounded by members of the school’s student leadership, some staring defiantly into the camera with arms crossed. After listing student grievances including the privatization of the public school system, budget cuts, school closures against community wishes and over-policing in schools, the young man announces the May Day walkout to nearby Fort Greene park in Brooklyn.

It would be easy to dismiss high-schoolers’ plans to participate in May Day actions — which included calls for “No School” alongside those of “No Work” — as an excuse to skip class. But the video from Paul Robeson High shows a politically aware and angry student body, which is keenly drawing connections between educational policy and broader political issues — most notably the production of racist systems. Their announcement connects the criminalization of schoolchildren to the institutionalized racism displayed in the case of Trayvon Martin’s killing.

“We believe that trying to control our schools is just another symptom of the blatant racism in our country similar to the government’s response to the senseless killing of Trayvon Martin,” the young man reads from the walkout announcement, while symbolically pulling up his hood over his head, referencing the hoodie marches in response to Martin’s murder.

Combined with a college student population fighting back against budget cuts, fee hikes and crippling student debt, these high school students are an indication that today’s young adults — cresting the Occupy zeitgeist and facing precarious futures — are fast becoming a political force with a taste for direct action.

Students from Paul Robeson and several other large high schools facing closure under New York Mayor Michael Bloomberg’s education administration (which has seen 140 struggling schools shuttered since 2003) participated in a protest walkout and converged with Occupy supporters in February. Indeed, across the country protests organized under banner of Occupy the Department of Education have brought students, teachers, parents and allies together to speak out against growing school privatization (much of which has been based on model legislation from right-wing policy group and Occupy bête noire, ALEC). The walkout tactic in particular was also recently employed in South Florida, when hundreds of young people left their classrooms in a coordinated protest to demand the arrest of Trayvon Martin’s killer, George Zimmerman.

The importance of young students autonomously organizing against perceived injustices — be they overbearing cellphone policies to heavy police presence in schools — should not be underestimated. Kids not yet of college age are prepared to act in defiance of institutions they see as oppressive; their anger comes from a place not of empty youthful rebellion but an awareness (far belying their years) of the harms of privatization and systematic racism. Only recently, as writer Alexander Zaitchik pointed out this week in Salon, has the student debt crisis and the corruption behind it become a front for protest in this country. Meanwhile, in Quebec, currently more than 165,000 college students are on strike (this from a total student body of 495,000) — an underreported student strike against proposed fee hikes that is now in its third month.

College student protest is nothing new, but has often in history been quixotic and merely a passing phase for campus dwellers — “radical until graduation” as the saying goes. But now college graduates entering a world of underemployment and precarity no longer see radical political action as the preserve of students. And now, it seems, we can add a growing number of high school students to these ranks of the politicized and radicalized. As the student leaders from Paul Robeson High note, the May Day walkout is just their “first action” against injustice.

This is a bit of a surprise, because it would seem to go against the position of the deficit-fixated Congressional GOP. As reported in Salon two weeks ago, in the summer of 2009 the Obama administration implemented several measures of a bill passed during the Bush administration aimed at helping students afford college. One of those measures lowered interest rates on federal student loans, but is set to expire on July 1st. In recent days, Obama has been making a big push to extend the low rates, while Republicans have complained about the cost of doing so.

Romney’s position also would seem to go against his own stance on federal education assistance. In March, he told a high school senior at a town hall that “it would be popular for me to stand up and say I’m going to give you government money to pay for your college, but I’m not going to promise that.”

Flip-flopping aside, as a political maneuver the student loan switch looks pretty smart.  Despite their grumbling, Republicans don’t seem all that eager to let interest rates jump on students in the middle of an election year, and Romney’s sudden decision to align with Obama defuses it as a campaign issue.

One does wonder what the reaction of the conservative base will be, though. The paint is hardly dry on Romney’s locking up of the GOP nomination, and already he is supporting big government handouts. Next thing you know, he’ll be backing universal health care with an individual mandate.

A year ago, the student debt crisis was a quiet one. Default-triggered cascades of compounding interest and collection fees were matters of lonely shame and anxiety. Journalists writing on the issue networked through friends and family to find subjects willing to go on record. Then the debt-confession signs started popping up at OWS protests, and stories of debilitating student debt were everywhere. Numbers that had been a source of private depression became symbols of generational defiance. “I have $80,000 in student loan debt,” declared a typical sign. “How can I ever hope to repay that now?” Others demonstrated the vertiginous arithmetic of the classic default spiral: “Borrowed $26,000. Paid back to date $32,000. Still owe $45,000.”

There’s no shortage of statistics capable of illustrating America’s economic elephantiasis. Taxes, health care, wages — take your pick. But it’s the student debt numbers that most shock college graduates over 50. If you went to school in the 1960s or ’70s, it doesn’t seem possible that the class of 2012 is graduating with an average debt load of more than $25,000. The macro milestones tend to get more press — America’s $1 trillion in aggregate student debt now surpasses that owed on its credit cards — but it’s the 25 large that makes boomers whistle and start talking about the days when a semester at Berkeley cost the same as a trip to the laundromat.

Now Berkeley costs as much as Princeton, and the days of paying for any state university with a part-time job aren’t coming back. But neither is the time when exploding education costs went unchallenged and the loan industry got away with murder. Post-Occupy, there is a new militancy around student debt that signals a break with the decades leading up to the present mess. “There are groups popping up all over the place who are slowly coming together under one movement,” says Kyle McCarthy, an organizer with Occupy Student Debt and the creator of “Default,” a documentary airing on 140 PBS affiliates. “Our generation has no disposable income anymore. Some of us aren’t getting married, having kids, buying a house. People finally understand this is a huge freaking problem that isn’t going away.”

Indeed, the crisis grows with every graduating class. Amid an anemic recovery, America’s recent graduates continue to default in record numbers; according to some estimates as many as one in three. Tuition and fees at public and private schools are galloping ahead of inflation, while state funding per student has dropped by nearly a quarter since 2000. The number of students taking on toxic debt in the scandal-plagued private loan sector, where interest rates can tickle 30 percent, has more than tripled during the same period. Activist sites continue to be flooded with stories of student debt hell — of educated 20- and 30-somethings forced to choose between health care, day care and servicing the interest on ballooning student debts the laws ensure they will take to their graves.

It is a sign of the times that sites like StudentLoanJustice.org aren’t the only ones crowd-sourcing student debt misery. The Consumer Financial Protection Bureau, launched last year over Republican opposition as part of the Dodd-Frank Act, is collecting stories from distraught borrowers as part of an investigation into corruption and abuse in the growing private student loan market. “For the first time, a government agency is empowered to supervise this industry and prevent a whole generation from losing trust in institutions promoting higher education,” says the bureau’s student loan ombudsman, Rohit Chopra. “The financial interests of these companies are often at odds with those they are claiming to serve.” The CFPB may be a little late to save those bonds of trust, but it plans to release its report this summer, possibly as part of congressional hearings.

The CFPB effort is a welcome but small development. It does not address the myriad larger issues that constitute the student debt crisis, a partial list of which includes federal loan debt and defaults, predatory collection practices, rising tuitions, disinvestment in public education and a lack of basic consumer protections around student loans such as bankruptcy. Another recent development that better reflects the scope of the problem is the Student Loan Forgiveness Act, which the House freshman Rep. Hansen Clarke, D-Mich., introduced in March. The bill would establish an income-based repayment plan that caps student loan payments at 10 percent of income over 10 years following graduation. After a decade, the remaining balance is forgiven up to $45,000.

“After 10 years of repayment, you should be able to save and make other investments in your life, but now increasingly what you get is a nightmare,” says Clarke. “It undermines American competitiveness when those best suited to start a business or buy a home can’t because of student debt. Freeing up $500 a month for millions of people over decades is real stimulus. The student debt bubble won’t burst the way the housing bubble burst, because the Treasury backs most of the loans, but crushing personal debt is a slow-burning social crisis that’s robbing people of their American dreams.”

The stimulus logic behind Clarke’s bill is supported by recent data showing student debt’s drag effect on the housing market. But it’s human-scale suffering that’s driving the increasingly pissed-off conversation outside Washington. When Clarke travels to Michigan to discuss his bill, he hears stories that could be multiplied thousands of times over in every state: of young people putting everything on hold and taking jobs they hate just to service the loan interest, of older Americans who went back to school to learn new skills now fearful that default will mean chunks of interest subtracted from their Social Security checks. An online petition in favor of Clarke’s bill is rapidly nearing its goal of 725,000 signatures.

Though Clarke’s bill is a nonstarter in the current Congress, it has the potential to serve as a rallying point for a growing movement. Among Clarke’s brain trust is a former assistant Brooklyn district attorney named Robert Applebaum. In 2009, Applebaum founded ForgiveStudentLoanDebt.com in disgust over the Wall Street bailouts that bypassed everyone else. The following summer he launched a petition to forgive all student debt. Intended as a conversation starter more than a policy proposal, the petition garnered more than 700,000 signatures and became the most popular campaign in the young history of SignOn.org.

“So many indebted graduates entering a decimated job market has triggered a rapid shift in the conversation,” says Applebaum, who now organizes full time around the issue. “What we’re seeing are the spoils of what happens when education is treated not as a public good, but as a commodity, as just another way to turn a profit.”

With the class of 2012 preparing a graduation walk that for many means walking the financial plank, it’s worth asking: How did we get here?

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The student loan era begins with the Higher Education Act of 1965. The educational cornerstone of LBJ’s Great Society, the bill fueled the postwar democratization of higher education by funding need-based grants and zero-interest student loans. The act was no civilian expansion of the GI Bill, but began to shift the burden of paying for education from the government to students. Richard Nixon sped up this shift in 1972 when he created the Student Loan Marketing Association, a government-sponsored entity best known by its maternal nickname, Sallie Mae. The outfit was tasked with encouraging banks and schools to issue more student loans, which for a fee Sallie Mae would purchase and service, backed by the U.S. Treasury.

As long as tuitions stayed in line with inflation, Sallie Mae grew without controversy alongside college enrollment. Well into the 1970s, the typical student could cover the costs of college with part-time work, government grants, and zero- or low-interest federal loans. In the event of economic calamity, those loans could be discharged in bankruptcy.

Like so much else in the U.S. economy, this changed in the 1980s. The tuition-federal loan cycle is not well understood, but it’s likely schools began charging more simply because they could: A college degree was becoming the new high school diploma, and the Treasury, not the schools, was on the hook for the loans. States, meanwhile, began reversing the postwar trend of investing in community colleges and state university systems. In Reagan’s budgets, yearly increases in need-based Pell Grants, which targeted low- and middle-income students, came to a grinding halt. Where the maximum Pell grant covered 69 percent of the cost of a four-year college in 1981, it covered just 45 percent a decade later. The number is now 34 percent.

“By the time Reagan left office, the balance between need-based grants and interest-bearing loans had shifted dramatically,” says Stephen Burd of the think tank Education Sector. “And the student loan industry began to see its profits soar.”

No one understood the profit potential of this shift better than an ambitious Sallie Mae executive named Albert Lord. Within a decade of joining the company as comptroller in 1981, Lord rose to CEO with a plan to take Sallie Mae private and shift the company’s center of gravity from Washington to Wall Street. The desire was mutual. Sallie Mae’s assets multiplied eightfold during the Reagan years. Investors were salivating over the chance to get a piece of Sallie Mae’s expanding $15 billion portfolio of government-backed loans.

With enrollment numbers and tuitions ticking up, Bill Clinton’s election briefly threatened the plans of those planning to take the federal loan gravy train private. In 1993, Clinton instituted the Direct Loan program in the Department of Education. The intent of allowing the Department of Education to issue loans was to cut out middlemen like Sallie Mae and save money. But the industry’s friends in the newly Republican Congress successfully undermined the program. In 1996, Sallie Mae went private and began trading as the SLM Corp. All of the trends of the 1980s accelerated, and by the early aughts Lord sat on a personal fortune of $230 million. Sallie Mae’s 2003 annual investors report boasted of “strong fee income growth, largely from debt management operations.” With his profits Lord began building a private 18-hole golf course on his Maryland estate. Shortly after breaking ground, he bitched to the Baltimore Sun about having to deal with zoning officials. “I hate rules,” said Lord.

Not all rules. When he uttered these words, Sallie Mae had just spearhead the lending industry’s lobby effort behind the 2005 Bankruptcy Act, which stripped private student loans of bankruptcy protection. (Such protections around federal loans had long been chipped away.) Leading the effort in Congress was Lord’s golfing buddy and current majority leader, John Boehner. It was around this time that Sallie Mae hired Boehner’s daughter as an executive at one of its largest collection companies. Sallie Mae remains the largest donor in the history of Boehner’s PAC, followed by the unctuous for-profit education industry, where private student loans are most common, most toxic and least likely to result in a college degree.

The removal of bankruptcy rights from private student loans startled education economists at the time and remains a central grievance of student debt activists. “There was and is no public policy rationale for holding private student loans to the same standards as federal income taxes or child support,” says Mark Kantrowitz, author of three books on student finance and publisher of FinAid.org. “These loans are comparable to credit cards.”

The Bankruptcy Act proved the high-water mark of student lending-and-collection industry influence. The following spring, “60 Minutes” aired an investigation that featured student borrowers in default spiral, as well as victims of sleazy lending and brutal collection tactics. For many viewers it was their first glimpse into the realities of modern student debt, where borrowers down on their luck can quickly find themselves drowning in runaway debt totals many times their initial loan. Following the segment, members of the newly elected Democratic Congress called for investigations and assembled a student loan reform agenda. They were assisted by New York state attorney general Eliot Spitzer, who unearthed multiple instances of Sallie Mae and other major lenders colluding with financial aid departments against the interests of students. The Senate Education Committee and the New America Foundation conducted their own investigations, uncovering high-level conflicts of interest and revolving-door hiring between Sallie Mae and senior management at the Department of Education.

The revelations did not shock Alan Collinge. The Tacoma native had spent the previous two years researching the industry and collecting borrower stories for his website, StudentLoanJustice.org, some of which were featured in the “60 Minutes” segment. Among them was Collinge’s personal story of watching a $38,000 debt incurred studying aerospace engineering grow into more than $100,000. In the summer of 2006, Collinge launched a one-man crusade. He gave up his apartment, purchased a run-down Winnebago, and conducted a speaking-tour of the home districts of every member of the House and Senate education committees. He ended the tour in Washington, where he met with Sen. Hillary Clinton.

When the financial crisis of 2007 and 2008 resulted in a wave of new defaults, Collinge began organizing pissed-off borrowers who were just beginning to understand the depth of their hole. He collected the stories for his website and continued to agitate on Capitol Hill. By 2010, Collinge was a well-known gadfly among education economists and members of Congress. But it was a lonely vindication he felt when during nationally televised TARP hearings, the chair of the oversight panel, Elizabeth Warren, described the student loan industry as having won powers “that would make a mobster envious.”

He worried that not even Warren understood that the comparison was unfair to the mob, which actually wants fast repayment and makes plain the consequences of default.

“At least loan sharks look you in the eye and are upfront about the terms of the loan,” says Collinge. “The student lending industry, including the Department of Education, is structurally predatory and makes more money from defaulted loans. In the mob analogy, the lenders make more money breaking fingers.”

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Obama entered office with a moderate reform agenda and delivered. Fifteen years after Clinton established the Direct Loan program, Obama finally removed the right of private lenders like Sallie Mae to originate federal loans (though they continue to profit by collecting and servicing them). He created a Grad Plus program guaranteeing access to unlimited low-interest federal loans for graduate study. Most recently, he ordered the Department of Education to speed up the introduction of a new income-based repayment plan for federal loans. Less generous than Clarke’s bill, the administration’s plan caps payments at 10 percent of income (down from 15) over 20 years (down from 25) after which the balance is forgiven.

But like Clarke’s bill, Obama’s income-based repayment plan treats the symptoms, not the disease. It does nothing about the soaring costs of education, budget cuts, or widespread corruption and abuse in the private loan industry. Nor does it help the huge number of borrowers already in default with their federal loans.

“Obama’s IBR can help people entering school next year, but it’s limited to federal loans and does nothing for those who’ve already paid more than they borrowed and shouldn’t have to face another 20 years of payments,” says Collinge. “It also forces defaulted borrowers, who may have been defaulted improperly to begin with, to sign a fresh loan document that legitimizes a massively inflated amount.”

Perhaps the biggest problem with Obama’s program is that it ignores the baseline uncertainty of life in America. If you want to remain in the program, you have to stay current with payments for ten years. There’s little room for the unexpected.

As with health care, the U.S. is the higher ed outlier of the industrialized world. This November, British students staged massive protests against a new law that would have raised the maximum annual tuition charged by universities to $14,000 — or less than half of what California residents pay to attend UC-Berkeley. Closer to home, annual tuition at elite Canadian universities tops out at $6,000. But even this is too much for some regional Canadian governments. Newfoundland has maintained a tuition freeze since the 1990s, and last year it eliminated interest on all student loans. Experts say the first step in resolving America’s student debt crisis is a similar recommitment to quality public education. “You can’t fix the U.S. student debt problem without addressing disinvestment in public education, which leads you to federal and state lawmakers,” says Education Sector’s Steve Burd.

Making American higher education universally affordable again should be easy (unlike health care). There already exists a vast public infrastructure of state universities and colleges, as well as a widespread belief in government’s obligation to educate its citizens. But nearly a half-century after the signing of the Higher Education Act, the costs of attending college make a sick joke of LBJ’s signing ceremony claim, in which he described higher education as the path “to deeper personal fulfillment, greater personal productivity, and increased personal reward.” For today’s graduates, it’s just as often a path to a lifetime of debt bondage. Whether this will be the case for generations to come is still an open question. The answer depends on the Unemployed Superhero wielding his economic ball-and-chain not as an stage prop, but as a battle flail.