— The Huffington Post doesn’t understand stocks and flows in this story on student loans. Here’s the lede:
Student loan debt is eating up a sizable chunk of recent college graduates’ paychecks, according to a new Congressional report. And that’s putting it mildly.
About two-thirds of graduates of the class of 2011 have college debt, and those students have an outstanding balance equivalent to about 60 percent of their annual income on average, according to a report from Congress’ Joint Economic Committee.
It seems that the HuffPo thinks that 60 percent of grads’ checks are getting eaten up by debt. But debt is a stock and income is a flow, so comparing them is not particularly useful. What really matters is the debt service relative to income. What percentage of their income are graduates spending on student-loan payments?
HuffPo doesn’t tell us, but it’s far, far lower than 60 percent.