We have a similar impending, though more distant, student-loan disaster in the UK, although the details are very different (generally to the benefit of the loan

We have a similar impending, though more distant, student-loan disaster in the UK, although the details are very different (generally to the benefit of the loanholders, thankfully). Between 2012–22, university tuition more than tripled and student loans were offered with the following terms: no debt collection or defaulting; no impact on credit rating; only repay 9% when you earn over £27,000/yr (average UK graduate salary is £38,500, ranging between £16,000 and £90,000[1]); debt wiped after 30 years.[0] The idea was that having more graduates was a good thing, but this was in the midst of the post-2008 austerity hysteria so the government couldn't be seen to just be paying to subsidise higher ed. So the dumbest possible solution was devised, such that all the money given out as 'student loans' could be recorded on the balance sheets as loans that would one day be repaid (i.e., not an expense but an asset). One can voluntarily make additional repayments, but there is no benefit to doing so because there is no downside to having the debt.[2] The interest gained (which is comparatively high) results in the balance usually increasing faster than most people are paying it off. The government has in the past backed off on highly controversial plans for retroactive changes to the repayment thresholds,[3] although in 2022 they did freeze the thresholds for three years (which had until then been rising with inflation).[4] As a result, in 2042 a good amount of the first tranche of these loans will default, leaving a big hole in the budget. By that point, the total value of student loan debt is forecast to be £500bn.[5] It's estimated that over 80% of loans will never be fully repaid.[6] For comparison, UK annual spending on defence is ~£55bn and healthcare is ~£180bn. [0]: https://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/ https://www.moneysavingexpert.com/students/student-loans-tui... — I think post-2022 loans are similar, but I'm less familiar with them [1]: https://www.savethestudent.org/student-jobs/whats-the-expected-salary-for-your-degree.html https://www.savethestudent.org/student-jobs/whats-the-expect... [2]: https://www.moneysavingexpert.com/students/repay-post-2012-student-loan/ https://www.moneysavingexpert.com/students/repay-post-2012-s... [3]: https://www.moneysavingexpert.com/news/2015/11/autumn-statement-2015-hidden-retrospective-hike-in-student-loans-repayments-a-disgrace/ https://www.moneysavingexpert.com/news/2015/11/autumn-statem... [4]: https://www.moneysavingexpert.com/news/2022/02/plan-2-students-to-pay-p8-000-more-of-their-student-loan-as-gov-/ https://www.moneysavingexpert.com/news/2022/02/plan-2-studen... [5]: https://commonslibrary.parliament.uk/research-briefings/sn01079/ https://commonslibrary.parliament.uk/research-briefings/sn01... [6]: https://fullfact.org/education/about-17-students-are-forecast-fully-pay-back-their-loans/ https://fullfact.org/education/about-17-students-are-forecas...