November 25, 2020

Gen Z Conservative

The thoughts of a young conservative on political issues relevant to all ages

forgiving student loans

Forgiving Student Loans Is a Horribly Unfair and Impractical Idea

What Ben Shapiro Said about Forgiving Student Loans

“How about this: instead of forgiving everybody’s college debt, we force all the colleges who scammed millions of Americans into degrees in Useless Theory Masquerading As Valuable Life Skills to grant refunds. That would end the grift real quick.”

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My Take on Forgiving Student Loan Debt

For those that want a brief summary but don’t have time to read the full article, here’s what I will cover: How the issue could be reframed to provide context, why it’s impractical, why it’s unfair, what the real problems are, and how the issue with student debt could be fixed without the government forgiving student debt.




Reframing the Issue

Imagine if the idea of forgiving loans was framed differently. What if, for example, we instead framed it as forgiving mortgage debt, whatever the amount? Think about the public response to that issue and the questions that would arise.

“That benefits people with larger/more expensive homes more than people who only bought what they could afford!” “What about people who rent a house or apartment because they decided, for whatever reason, not to buy one?” “What about the people who saved for years to make a down payment and diligently scraped enough money together each month to pay their mortgage?” “Why is the government even involved in this in the first place, shouldn’t individuals be responsible for their own home debts, as they are for all others?” And so on and so forth. There would be infinite problems with the government forgiving mortgage debt.

Before you dismiss that example as irrelevant to the government forgiving student loans, just think about if anything really separates the two issues. Both are arbitrary and unfair to responsible people. Both would be hugely expensive. Buying a house for your family to live in is surely as important as going to college. And home debt is arguably more burdensome than student loan debt given the general values involved. I think it’s a reasonable comparison.

So, assuming that it is a relevant comparison (if you disagree, just say why in the comments), why would any of the outrage and questions related to the idea of the government forgiving mortgage debt be irrelevant if applied to the idea of the government forgiving student loan debt? In my view, all the criticisms still apply.




The Smaller Issue: The Practicality of Student Debt Forgiveness

First, let’s delve into the practicality of the government forgiving student loans.

Where would the money come from? More debt, which would increase our already skyrocketing national debt? Higher taxes, which are already too high? Neither form of payment would be particularly well-received. Outstanding student loan debt is about $1.6 trillion, should the government really take on that much more debt or raise taxes to pay for that program? From a money perspective, it’s impractical.

Next up is the question of what amount loans would be forgiven. In a recent statement, Chuck Schumer said that Joe Biden could “modify, compromise, waive or release” student loans. Schumer said that program would provide forgive 75% of borrowers and partially forgive more than 95%. What metric is being used? Biden said that he would forgive $10,000 of student loans. Elizabeth Warren said $50,000. Others have said that they want all student loans erased.

So, what amount would be forgiven? Is there even a consensus, and how could a Biden Administration come to a number without that figure being completely arbitrary? As with paying for the program, deciding what to pay for will likely prove impractical and unpopular.

Then, if the government decides to start forgiving student loan debt, what type of loans will be forgiven? I assume that loans related to completed four-year degrees will be, but there are many other potential types.

Will loans related to graduate degrees be forgiven? Will community college loans be forgiven? What about students that studied abroad; will loans related to that experience be forgiven? What about trade school debt? What about debt incurred on uncompleted degrees? What about loans taken out to pay for living expenses? Will those be included too, or just tuition expenses? Will everyone that has already paid for a degree receive a check too? Will debt incurred at private schools be forgiven too, or just public ones?

There are other angles by which the idea of the government, specifically a Biden Administration, forgiving student loans could be attacked and shown to be impractical. But all of those critiques can, I think, be boiled down to what I showed by comparing this idea to the idea of the government forgiving mortgages; there are too many questions that would have to be asked because the program would be so arbitrary and expensive. It would be utterly impractical.




The Bigger Issue: Forgiving Student Loans would be Unfair to Responsible People

Here’s something you wouldn’t guess from media coverage of student loans: most people pay them off in under 20 years. They work hard to fulfill their obligations and prioritize paying off their outstanding loans over living a fancy lifestyle.

In other words, they are responsible. They chose a school and took out loans that fit within the bounds of their financial means. They chose a major that might have been more difficult, less fun, or less interesting, but got them a job after school. They, like the people in The Millionaire Mind, budgeted once they got a job and went to work every day so that they could pay off those loans.

Those people would be made chumps by Joe Biden’s plan for the government to start forgiving student loans and getting rid of student loan debt. All of their diligence and hard work would be made irrelevant by an arbitrary government program. Even if they got a check in the mail for the amount of the debt they paid off (however long ago that was) likely wouldn’t make up for the lifestyle choices they made so that they could pay off their debts and be responsible citizens.

On the other hand, the irresponsible members of society would be rewarded by the government forgiving student loans. All the people who avoided payments because they wanted a new car or nicer house or apartment would be rewarded. Everyone who took out loans they couldn’t afford because they wanted to go to a school outside their means would be rewarded. Those flighty people that didn’t complete their degree would be rewarded for their lack of diligence or planning. Students who took fun and easy, rather than practical and difficult majors would be rewarded. Should the dance major really be rewarded while the accounting major is not?

Furthermore, just think of the sacrifices individuals and parents around the nation have made to pay off debts, or avoid incurring them in the first place. Parents like mine saved and invested diligently so that their children could get a college education without incurring any debt. A Biden Administration would make chumps of all those people by forgiving student debt; not only would their diligent saving be for nothing, but their tax dollars would go towards paying for the bills of the irresponsible members of society. Ditto that for the impressive people who paid off their debts all on their own.

One final point is that forgiving student loans would just encourage colleges to raise prices and people to take out larger loans, knowing they would be forgiven, just as forgiving mortgages would lead to people buying more expensive houses and home-builders raising prices. Something similar happened with FAFSA; it raised the price of college. There’s no reason to think things would be different with forgiving student loans.

forgiving student loans

In short, forgiving student loans would be unfair. That program would punish and kick to the wayside responsible members of society while embracing and rewarding the irresponsible people who made poor financial decisions. All the saving and lifestyle sacrifices made by the productive and responsible would be thrown away by a government that wants to reward the irresponsible. Forgiving student loans would be unjust and unfair.




What the Real Problem Is: Overly Expensive and Useless Educations

As a current college student, I have seen how bloated the average university has become. Paying for high-quality faculty teaching useful majors is only a small fraction of the overall costs universities incur.

The majority of their expenses come from paying for bloated administrative staffs that provide nothing of value, hiring faculty to teach useless classes like underwater basket weaving or queer theory, paying for coddling emotionally immature students, and providing extracurricular programs of dubious value. If you’re an emotionally mature student that has no use for queer language theory or petting an emotional support dog, then you get little of value from the average college or university.

And that is the main problem, as Ben Shapiro identified in his tweet on forgiving student debt. If every school was laser-focused on providing a high-quality education in majors like finance, accounting, economics, geology, chemistry, engineering, physics, and biology, then this whole “student debt crisis” issue would be irrelevant. Every college graduate would be ready to be a productive member of society and could get a job that would let them pay off their loans.

But, that’s not what schools do. They don’t hire the best, tenured faculty for those subjects; instead, they rely on TAs and visiting professors. But they cut big checks for people teaching “grievance” classes about why Western civilization is evil or how to overthrow the state (a class my school, Washington and Lee, is teaching). And they throw money at the aforementioned, sparsely attended diversity events and ridiculous, often obscene programs. Providing quality education is out and promoting grievance and racial animus is in. Having a good career development office is out and having a ridiculous number of diversity deans is in.

And that’s not all. They also don’t liquidate their endowments to lower the cost of education. All non-profits are required to spend some of their endowment each year. All non-profits, that is, other than colleges. Instead, they rack up ever-larger endowments, sometimes in the billions of dollars, without ever spending the principal on helping students afford the school.

So, while we would like to imagine that the problem with forgiving student loans is merely one of practicality and rewarding the irresponsible, those aren’t the only issues. The (arguably) bigger issue is that colleges, especially elite ones, have risen precipitously in price but provide little, if anything, of value. No wonder so many young people claim they can’t pay their debts; their expensive education is worthless.




The Solution

So, what is the solution that would fix the issue without required forgiving student loans? An exit exam. Most every aspiring college student has to take the ACT or SAT to prove their competence and get into these schools, why not establish one that would show their improved competence upon exiting?

And no, it shouldn’t be career or major specific. Those feminist dance theory majors should have to take the same exam as the physics student. Students would take it when they arrived and when they left and it would test general competence in areas like writing, reading, and reasoning, much as the LSAT does, and schools would lose their accreditation if the overwhelming majority of their students were not more competent upon graduation.

Additionally, schools should be forced to adhere to the same rules as other non-profits; they should have to pay out a large percentage of their endowment each year to keep the cost of education down. Perhaps, if that were the case, they’d focus on quality education, rather than Marxism, so that their future potential donors would be better able to donate large sums.

Those solutions, while imperfect, would, I think, help solve the problem without requiring forgiving student loans. The deadwood would be cut as schools focused on teaching their students valuable life skills rather than to hate capitalism. Education costs would plummet, especially in elite schools, if portions of the endowments were spent each year. As a result, students would be better equipped to get jobs and pay off their debts and the size of those debts would decrease.




Conclusion: The Government Should Not Start Forgiving Student Loans

As with pretty much all problems, more government is not the solution. The Big Government solution of forgiving student loans would just create more problems. Forgiving student loans is unfair; it rewards bad behavior and punishes good behavior. Forgiving student loans is impractical; it would be too expensive and there are too many questions that would have to be answered. And, most of all, forgiving student loans is just a bad idea. There are better solutions.

The left will always clamor for more government. Especially in cases like this one where the problems are a lack of responsibility or leftist institutions doing a bad job.

But don’t be drawn in by the left’s siren song of forgiving student loans. If you’re struggling under a burdensome debt load, the idea of student loan forgiveness might sound nice. You’d be freed from that debt, after all. But that policy would punish responsible people, bloat the government, do nothing to solve the real problem, which is skyrocketing costs, and place the entire country under the same debt load (because of the likely increase in the size of the federal debt).

So don’t support Biden’s attempt to create a program that would start in forgiving student loans. All that program would do is make education even more expensive and make the American populace even more irresponsible. Instead of pushing for the government to start forgiving student loans, attack the root of the problem, and demand your college or university get rid of all the useless things it spends money on.

Forgiving student loan debt wouldn’t even be a topic of discussion if universities just focused on their real purpose and (former) area of expertise: providing a quality education to bright pupils.

By: Gen Z Conservative

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