This country will bail out a bank before it bails out a body.
In the “land of personal responsibility,” the rule is simple: the bill never stops. Not when you’re sick. Not when you’re educated. Not when the system itself is broken.
The American Dream used to mean owning a home.
Now it means surviving the hospital bill from the heart attack you had trying to afford one.
College? The $180,000 experience that qualifies you for a $45,000 job. If you’re lucky enough to be in the shrinking slice of graduates where that math still works.
Medical debt is the only debt in America you can accumulate unconscious, with zero decisions made.
And yet the lectures about responsibility never reach the institutions that create the bill in the first place.
If we’re serious about accountability, start with the ones selling six-figure degrees with no jobs attached.
Because when government talks about “helping the economy,” it usually means helping banks, corporations, and lobbyists.
Not the people the country is supposed to work for.
What We’re Covering in This Episode
The Numbers That Should End the Debate
Student Debt: The Tax on Trying
Medical Debt: The Bill for Still Being Alive
The Objections — And Why They’re Weak
The Four Strategic Fixes
The Uncomfortable Honest Part
And Finally...
The Numbers That Should End the Debate
Two numbers. That’s all this needs to start.
One point eight four trillion dollars. That’s the current total student loan debt in the United States, carried by roughly 43 million Americans. Not 43 million deadbeats. Not 43 million people who made bad choices. Forty-three million people who were told, at 17 or 18 years old, that college was the ticket — by their parents, their guidance counselors, their government — and who borrowed to buy a ticket the system had already started repricing behind their backs.
Two hundred and twenty billion dollars. That’s the current estimated total of medical debt sitting on Americans’ credit reports and in collections. Owed by 100 million people. Not people who overspent on vacations. People who got sick. People who got hurt. People who, through no decision of their own, needed medical care in a country that decided to run healthcare like a luxury goods market.
$1.84 trillion in student debt.
$220 billion in medical debt in active collections.
100 million Americans. One illness or one diploma away from financial destruction.
Together, those two debt categories form a system so efficient at extracting wealth from working and middle class Americans that, if a foreign government had designed it, we’d call it economic warfare. But because it grew domestically, through legislation, through lobbying, through decades of policy choices that always managed to benefit lenders more than borrowers, we call it personal responsibility.
This is Episode 24 of Make America Grow Again. We are one episode from the end. By now, if you’ve been reading this series, you understand that these problems don’t live in separate silos. Student debt connects to income inequality (Episode 4). Medical debt is the downstream consequence of the healthcare cost crisis we tackled in Episode 2. The two together — student debt plus medical debt — are a direct cause of the family formation collapse we walked through in Episode 23. You cannot fix one branch of the tree while ignoring the roots. Every episode in this series has been building toward a simple thesis: the system isn’t broken. It’s working exactly as designed. The question is: designed for whom.
Student Debt: The Tax on Trying
Let’s start with the argument you hear most often against student debt relief: you borrowed the money, you pay it back. It’s clean. It’s simple. It resonates with a certain moral framework about personal accountability that sounds hard to argue with until you look at the actual conditions under which the borrowing happened.
In 1980, the average annual cost of a four-year public university was around $3,500 in today’s dollars. A student working a minimum-wage summer job could cover a substantial portion of a full year’s tuition. Today, the average annual cost at a four-year public university exceeds $27,000 when you include room and board. Minimum wage has not kept pace. State funding for public universities has been cut so dramatically over the past four decades that in many states, less than 10% of a public university’s operating budget comes from the state. The rest? Tuition. Your tuition. Paid with borrowed money.
So when someone says “you borrowed it, you pay it back” — what they’re actually saying is: the generation that went to college when it cost $3,500 made a series of policy decisions that drove the price to $27,000, and now the generation that had to pay $27,000 should stop complaining about the consequences. That’s not a moral argument. That is a con.
🔎 Pro-Tip: The For-Profit College Scam Lives Inside These NumbersPeople who attended private, for-profit colleges have the highest default rates and the worst post-graduation earnings relative to debt. In many cases, they were specifically targeted by predatory recruiting practices — disproportionately veterans, low-income students, and people of color. The corporate capture and regulation failure we broke down in Episode 9 is part of how these schools operated for decades with federal loan dollars flowing through them while delivering fraudulent outcomes. The debt those students carry isn’t the product of bad choices. It’s the product of a system that let predators access federal money and call it education.
The current federal student loan debt balance is $1.69 trillion in federal loans alone, carried by 42.8 million borrowers. The average federal balance is just under $40,000 per borrower. But averages lie. At the top of the distribution, 3.6 million people owe over $100,000 — 1.1 million more than owed that amount in 2018. The debt is growing faster than borrowers’ ability to repay it. That’s not a personal finance problem. That’s a structural one.
And here’s the effect that doesn’t show up in the balance sheets: deferred life. The Americans carrying this debt are delaying home purchases, delaying starting families — we tracked that in Episode 23 on Family Formation Support — delaying retirement savings, delaying everything that generates downstream economic activity. Student debt doesn’t just burden individuals. It functions as a brake on the entire economy, turning what should be peak earning and spending years into years of debt service.
🔎 Pro-Tip: The Racial Wealth Gap Has a Student Loan ChapterBlack borrowers carry more student loan debt on average than white borrowers, are more likely to have debt, and are more likely to carry balances over $25,000. Black women in particular carry 43% more undergraduate debt and nearly 99% more graduate debt than white women twelve months after graduation, according to The Education Trust. This isn’t coincidence. It’s the intersection of generational wealth inequality (Episode 19) and a higher education financing system that was never structurally designed to work equally for families without inherited wealth to fall back on.
Medical Debt: The Bill for Still Being Alive
Now we get to the one that makes the student debt debate look tame.
Medical debt is the single largest category of debt in American collections. It accounts for roughly 58% of all debt in collections — more than credit card debt, more than auto loans, more than any other category. One in five credit reports contains a medical collection. And unlike credit card debt, which you can theoretically control by not buying things you can’t afford, medical debt arrives without your permission.
You don’t choose to have a heart attack. You don’t opt into a car accident. You don’t schedule the cancer diagnosis for a quarter when it’s financially convenient. Medical debt is, by its nature, a debt you cannot plan for in the way that economic morality tales about responsibility assume you can plan for it.
“More than 62% of personal bankruptcies in America are related to medical bills or income loss from illness or caregiving. We are the only wealthy nation on Earth where getting sick is a leading cause of financial ruin.”
Think about that. Nearly two thirds of personal bankruptcies — not in some developing country without healthcare infrastructure, but in the wealthiest nation in the history of human civilization — are medical in origin. And 56% of those people had health insurance when they got sick. The insurance didn’t save them. The deductibles, the copays, the out-of-network billing, the administrative denial machinery — all of it conspired to generate a bill they couldn’t pay anyway.
This is the downstream consequence of everything we laid out in Episode 2 on Healthcare Cost Control. When you build a healthcare system around profit maximization instead of health outcomes, the people who need care the most end up paying the most — and when they can’t pay, they carry that debt for years, watching it destroy their credit, haunt their housing applications, and foreclose options they would otherwise have had.
🔎 Pro-Tip: Medical Debt Is a Terrible Predictor of Creditworthiness — and the System Knows ItThe Consumer Financial Protection Bureau spent years documenting that medical debt on a credit report is a poor predictor of future credit behavior. Medical debt appears because of health emergencies, not financial recklessness. In January 2025, the CFPB issued a rule banning credit bureaus from including medical debt on credit reports entirely. Then the Trump administration moved to dismantle the CFPB, putting that rule in jeopardy. This is the corporate capture story from Episode 17 showing up directly in your credit score: the same financial industry that profits from debt collection lobbied against the rule that would have cleaned up a system even their own analysts acknowledged was broken.
There’s a specific cruelty to medical debt that makes it different from other debt categories. People with medical debt on their record avoid seeking follow-up care because they’re afraid of more bills. So the underlying health condition gets worse. Which eventually produces a larger medical bill. Which produces more debt. Which produces more avoidance. It’s a spiral that costs the healthcare system — and the public — far more in the long run than the original debt would have cost to forgive. The math on this isn’t difficult. It’s just politically inconvenient.
The Objections — And Why They’re Weak
I want to address the three objections that will inevitably show up in the comments, because I’d rather deal with them directly than pretend they don’t exist.
Objection One: “What about the people who already paid off their loans? That’s unfair.”
This is the strongest of the three objections, and I’ll grant it some genuine weight. It is legitimately frustrating if you scrimped and sacrificed to pay off your debt and then watch others receive relief. That’s a real feeling and it deserves acknowledgment.
But here’s the thing: the fact that previous generations were harmed by a broken system is not an argument for continuing to harm future ones. We don’t refuse to fix a defective bridge because people got hurt on it before the repair. We fix the bridge. And we try to do right by the people who got hurt, which in this case means ensuring the relief is structured in a way that also benefits those who paid — through expanded tax credits, through tuition cost controls going forward, through the economic activity that debt-free workers generate in local economies. The solution to “it was unfair before” is not “let’s keep making it unfair.”
Objection Two: “It’ll cause inflation / it’s too expensive.”
The Congressional Budget Office estimated that broad student loan cancellation would cost somewhere between $300 billion and $500 billion over ten years depending on the structure. That sounds enormous until you put it next to the $1.9 trillion Trump tax cut of 2017, which primarily benefited corporations and high earners, or the $700 billion bank bailout of 2008. Both of those passed with bipartisan enthusiasm and neither of them produced the kind of “where’s the money coming from” interrogation that debt relief proposals face. The double standard is not subtle.
🔎 Pro-Tip: The VAT Revenue ConnectionIn Episode 3 on VAT Implementation, we laid out exactly how a phased consumption tax could generate sustainable revenue that doesn’t fall on the backs of people who are already getting squeezed. A partial VAT produces hundreds of billions in annual revenue — enough to fund targeted debt relief programs without adding to the deficit. The money isn’t missing. The political will is missing. Those are two very different problems.
Objection Three: “People should have made better choices.”
An 18-year-old is not equipped to make fully informed actuarial decisions about the 30-year financial consequences of a degree program. That is not a character flaw. That is developmental psychology. The loan industry, the university marketing apparatus, and the federal government all told that 18-year-old that borrowing was the right call. The people who gave that advice — and profited from it — should bear some of the cost of having been wrong. The 18-year-old who believed them should not bear all of it.
The Four Strategic Fixes
Here’s what strategic debt relief actually looks like. Not a campaign slogan. Not a blanket forgiveness of everything for everyone. A real, sequenced set of interventions that addresses the structural causes while providing meaningful relief to the people most damaged by the current system.
Fix One: Targeted Student Loan Cancellation With Income and Outcome Thresholds
Full cancellation of federal student debt for borrowers earning under $50,000 annually. Graduated relief for borrowers earning up to $125,000. Priority cancellation for borrowers who attended schools with documented predatory practices, accreditation fraud, or fraudulent placement rate claims — the for-profit sector specifically. And full, immediate relief for any borrower who has been in repayment for 20 or more years without reaching payoff due to interest capitalization, because at that point you are not paying off a loan. You are paying a debt that the interest rate structure has made mathematically unpayable.
This is not charity. This is correcting for a system that changed the terms of the deal after the borrowers had already committed. The accreditation standards changed. The job market changed. The cost structure changed. The borrowers didn’t change. They held up their end. The system didn’t hold up its end. That distinction matters enormously when you’re deciding who owes whom.
Fix Two: Federal Medical Debt Elimination for Low and Middle Income Households
Full discharge of medical debt currently in collections for households earning under 400% of the federal poverty level — roughly $120,000 for a family of four. This is the same income threshold used in the ACA marketplace subsidy structure, which means it’s a threshold the government has already decided is where the line between “can afford to absorb costs” and “cannot afford to absorb costs” sits.
The mechanism: the federal government purchases the debt at a fraction of face value from collections agencies — which is how debt gets sold anyway, for pennies on the dollar — and discharges it. The affected households get clean credit reports. The collections industry doesn’t love this, but they were never going to collect the full face value anyway. The net cost is far lower than the face value of the debt suggests.
🔎 Pro-Tip: RIP Medical Debt Has Already Proven the ModelThe nonprofit RIP Medical Debt has been buying medical debt portfolios on the secondary market and forgiving them for years. They routinely acquire debt at less than one cent per dollar of face value. A dollar donated to RIP Medical Debt erases roughly $100 in medical debt. The federal government, which can borrow at far lower rates than any nonprofit, could do this at scale with a fraction of the cost implied by the face value numbers. This is a solved logistical problem. The debt forgiveness charity has been doing it for years. We just need a government willing to scale what already works.
Fix Three: Structural Prevention — Stop Letting the Debt Accumulate Again
None of this matters if you forgive the existing debt and then rebuild the exact same system. Prevention means: tuition cost controls tied to federal aid eligibility, so universities cannot raise prices beyond inflation and continue receiving federal student loan dollars. It means expanded Pell Grants that cover a meaningful percentage of actual college costs rather than a symbolic portion. It means — and this connects directly to the education access work from Episode 5 — treating public higher education as a public good, not a market in which institutions compete for premium pricing.
On the medical side, prevention means making the healthcare cost controls from Episode 2 real. You cannot permanently fix the medical debt crisis while the underlying billing practices that generate it remain unchecked. The two fixes are joined at the hip. Always were.
Fix Four: Restore and Expand Income-Driven Repayment Protections
For the borrowers who won’t qualify for cancellation, a meaningful income-driven repayment system — one that caps monthly payments at a genuine percentage of discretionary income, that stops interest capitalization from making balances unpayable, and that leads to actual forgiveness after a defined period — is the floor, not the ceiling. The current system has these features on paper. In practice, the servicing industry has spent years obscuring eligibility, misapplying payments, and steering borrowers away from the programs they qualify for. Servicer accountability, audit requirements, and automatic enrollment when borrowers qualify are the enforcement layer that makes the reform real rather than theoretical.
🔎 Pro-Tip: The Generational Wealth Connection You Can’t IgnoreWho doesn’t have student loan debt? Largely, people whose families had enough wealth to cover college costs outright or who inherited assets that let them avoid borrowing. This is the generational wealth gap from Episode 19 expressed in a different currency. Debt relief doesn’t just help the people who receive it. It begins to level a playing field that has been tilted for decades by the compounding advantage of being born into wealth. That’s not redistribution. That’s correction.
The Uncomfortable Honest Part
Here’s the thing about debt relief that nobody wants to say clearly: the political resistance to it is not primarily economic. The economic case for it is strong. The political resistance is moral — or more precisely, it’s the weaponization of a particular moral framework that says suffering from past decisions is character-building, and that releasing people from that suffering undermines something important about personal accountability.
That framework sounds principled. In practice, it is selectively applied. The same political class that rails against student debt forgiveness cheered for bank bailouts. The same voices that say “you borrowed it, you pay it” have never asked pharmaceutical companies to pay back the NIH-funded research they monetized. The same lawmakers who want 22-year-olds to live with the consequences of their tuition decisions for 30 years passed corporate bankruptcy protections that let billion-dollar companies shed their obligations in months.
The moral framework isn’t the problem. The hypocrisy in its application is the problem.
The through-line of this entire series: when you look at who benefits from the status quo in each of these 25 areas — who benefits from opaque government, from uncontrolled healthcare pricing, from predatory lending, from debt that stays on credit reports indefinitely — it is never the person doing the actual work. It is always the institution that structured the deal. Episode 17 on Corporate Capture is the explanation for why Episode 24 is even necessary. These aren’t separate problems. They’re one problem with 25 symptoms.
And Finally...
📢 This Country Asks Young People to Bet Everything on a System Stacked Against Them — Then Calls It Initiative
I want to talk about what debt actually does to a person. Not the balance sheet version. The human version.
Debt is a claim on your future. Every dollar you owe is a dollar that belongs to someone else before it belongs to you. And when you carry that debt for ten, fifteen, twenty years — the way tens of millions of Americans carry student and medical debt — what you are really carrying is the permanent awareness that a portion of every dollar you will ever earn has already been spoken for. Not by your choices today. By a choice you made when you were barely an adult, or by a health crisis you had no say in whatsoever.
That awareness changes how you live. It changes what risks you take. It changes whether you start a business, whether you move to a better city, whether you have children, whether you ask for that raise — because if you lose the job, the payments don’t stop. It changes the psychological baseline you walk around with every single day. And we have millions of people walking around with that weight, and we have the nerve to wonder why innovation is declining, why entrepreneurship rates among young Americans have dropped, why the country feels like it’s tightening rather than expanding.
You built a country that bets against its own young people, and then you act surprised when the young people stop betting on the country.
Here’s what I want to leave you with, because we’re almost at the end of this series and this feels like the right moment to say it plainly.
The argument against debt relief is always framed as protecting the integrity of the financial system. The integrity of the system. As if the system that produced $1.84 trillion in student debt and $220 billion in medical debt collections, while banks paid out record bonuses and insurance companies posted record profits, has integrity worth protecting. As if a system that charges a 22-year-old 7% interest on a loan for a credential they were told they needed, while that same government lends money to corporations at near-zero rates, is a system operating with moral consistency.
It’s not protecting integrity. It’s protecting the extraction. Those are different things. And the fact that we keep confusing them is why we keep having this conversation instead of resolving it.
Strategic debt relief — targeted, income-based, paired with structural prevention — is not about rewarding irresponsibility. It is about acknowledging that a system can be broken and that the people it broke deserve repair. That’s not radical. That’s just what a country that gives a damn about its own future looks like.
We are almost at the end of this series. One episode left. The question I’ve been building toward for 24 episodes is the same one I started with: does this country want to work? Not “work” in the vague motivational poster sense. Work in the literal sense. Systems functioning. People contributing. Potential converting into output. Debt doesn’t just hurt people. It wastes them. And a country that wastes its people while lecturing them about their choices is a country that has forgotten what it’s for.
— Rxan Smith
Uncomfortable
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