Josh Freedman is a social and economic policy expert with the New America Foundation.

He recently published the second in a series of articles for Forbes focusing on how American families are now paying for college. His second part addresses a key component of the “Higher Education Bubble” – the easy access to student loans.

The shift from greater public funding of higher education to individuals financing their own education through debt has put more risk on individual students. But it also has potentially negative social and economic effects that spread beyond the college campus.

While loans are intended to expand college access to a broader population, the nature of risk that they entail also produces the opposite result. Low- and middle-income students worried about the consequences of taking out a loan will be more likely to decide that college attendance is not worth the risk. What we intended as a mechanism of educational expansion, then, is working at cross-purposes with itself. Sociologists Rachel Dwyer, Laura McLoud, and Randy Hodson put it best: “There is a certain irony that those who were expected to benefit most from expanded college access are also most vulnerable to the risks of carrying too much debt.”

Scaring away college students before they begin college, however, is a relatively small problem compared to others. Studies have found that high debt levels not only deter access at the beginning, but can also drive students away from completing college once they have already started. Except for Mark Zuckerberg, students who start college but do not graduate are stuck with loan repayments and no college degree. They still have to repay their loans but do not have the economic boost of a college degree to help them have enough income to cover this cost. Many students who are defaulting on loans fall into this category of students with debt but no degree.

A second issue with increasing levels of student loan debt is the effect on the economy. In a widely discussed brief last year (as widely discussed as briefs can be), data from the New York Fed suggested a macroeconomic drag due to student loan debt in the wake of the Great Recession. Individuals with more student loan debt were less likely than individuals without student loan debt to purchase homes or cars.

While there is not enough data to make a conclusive statement based on this single study alone, this conclusion fits with broader evidence that high private debt levels are a drag on economic growth. ….