Student-loan deferral programs compound debt by capitalizing unpaid interest

Evidence

In theory, deferral programs make it easier for students with significant debt to pursue advanced degrees; in practice, however, as interest accumulates, borrowers end up with a balance higher than the original principal. Consider how black college graduates are more likely to enroll in graduate school compared with their white peers (47 percent versus 38 percent) and more likely to have graduate school debt (40 percent versus 22 percent). — Dorothy A. Brown, The Whiteness of Wealth, 309

Categorization

• XREF: connects to: Student loan debts survive bankruptcy and trigger wage garnishment and license revocation — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 384; Financial self-help rhetoric collapses into absurdity when applied to student debt — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 965; Dispersing debt across the planet compounded rather than minimized risk — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 182 (+1 more)