Cancel student debt?
Washington, D.C., December 5, 2020
Cancel student debt? Nope, not with my vote in Congress.
This issue comes up frequently, and it’s usually promoted by (A) those with student loan debt, obviously; (B) those in academia; and (C) politicians looking for the votes of the two aforementioned groups. Let’s dive into some of their reasons:
REASON 1: “Most colleges are too expensive.”
Agreed, but that is not a compelling reason why the federal government should take money from the majority of Americans who don’t pursue a college degree to pay for those who do!
To the extent lawmakers have a role here, it’s to address the NUMEROUS underlying issues that have caused tuition to rise faster than inflation, not to shift that expense to the federal government.
REASON 2: “Public K-12 education is ‘free’, so college should be as well.”
By that logic, all post-secondary education should be publicly funded, including grad school, law school, trade school, med school, PhD programs, etc. Where do you draw the line?
K-12 provides important knowledge and fundamental skills needed to be a productive member of our society. Everyone can benefit from a K-12 education, as does our nation as a whole. (Which is why it’s compulsory and publicly funded.) The same CANNOT be said for college.
REASON 3: “A college education helps people get better paying jobs, so the federal government should incentivize that.”
Really? It’s true that government incentivizes people to pursue certain career paths when it benefits our general welfare (e.g. teachers and healthcare providers in rural areas). But when did it become the federal government’s role to incentivize career choices based on someone’s projected income? That’s not a valid reason.
REASON 4: “Canceling student loan debt will help stimulate the economy.”
So why not use taxpayer dollars to pay off everyone’s car payment? Or mortgage? Or credit card balance? Wouldn’t that also help stimulate the economy?
Two issues here: (1) offloading student loans to the taxpayers would actually be one of the LEAST effective ways to stimulate our economy, as numerous studies have pointed out. See link below for one of the most recent. And (2) not everyone has the same debts. So government paying off student loans would inequitably benefit people with those debts, leaving everyone else out to dry. That’s not a moral use of taxpayer dollars.
REASON 5: “It will help lower income people.”
Okay, but remember it would help higher income people disproportionally more. The University of Chicago just released a report on this very issue, illustrating how student loan forgiveness would benefit the top 10% of income earners just as much as it would the bottom 30% COMBINED. This is highly regressive.
Many people are rightly questioning the value of a college education these days. For those who decide college is in their best interest, it’s important that tuition be fair and affordable. Making that happen requires a multi-pronged approach, and state governments have a leading role to play. But putting federal taxpayers on the hook to “cancel student debt” is NOT a reasonable part of that solution.