WASHINGTON, March 11 (UPI) -- The head of the Washington, D.C.-based Center on Higher Education Reform, part of the American Enterprise Institute, said the "crisis rhetoric" surrounding student loans is overblown and the mounting student debt just means more people are going to college and potentially adding to the national economy.
Andrew Kelly said the $1.3 trillion in unpaid student loan debt that is looming large over the country may not bring the gloom and doom some economists have predicted. He told CNBC's Power Lunch it is too soon to tell if outstanding student loans will hinder further economic recovery.
"More student debt means that more people are getting an education," he said. "People who get an education have higher wages. They pay more in taxes; they buy more things."
Student loan borrowers have been calling for reforms to the education loan system as the percentage of borrowers who are 90 days or more delinquent in payments or are in default hit 11.6 percent. Borrowers have called on lawmakers to make changes to the system, including lowering college costs. There have been incremental changes on a local level, but little has been done at the federal level. Many are looking to the presidential candidates to alter the course of college financing.
Kelly said the number of borrowers -- some 43 million people -- is not the problem. Instead, the problem stems from borrowers who never finished their degree and struggle to repay their loans.
"They're not the people with the six-figure debts that you hear about in the front page of The New York Times," Kelly said. "They tend to be people who have very low debts who drop out before earning a degree."