Joe Biden ran on a platform that he would do something to relieve the burden of student debt on the nation’s younger adults.
The incoming Democratic president wants Congress, as part of the country’s continued response to the Covid-19 pandemic, to cancel up to $10,000 of debt per student borrower. Other Democrats recommend being even more generous, with figures ranging from $30,000 to $50,000 per borrower.
Student debt is indeed alarming. It’s estimated that 44 million Americans owe $1.6 trillion for their college education, or about $36,000 each. That indebtedness is causing many people to move back in with their parents after they finish school and put off starting families of their own. It is leaving them with little discretionary income.
Nevertheless, trying to fix the problem by writing off a large chunk of student debt is a wrong move for several reasons. Spencer Brown points out some of them in a recent op-ed column.
Brown is himself an indebted college graduate who now works for Young America’s Foundation, a conservative youth organization. He said student loan forgiveness is largely a question of fairness.
Since most student loans are issued by commercial lenders, the payback of which is guaranteed by the federal government, whatever the debtor doesn’t repay gets pawned off on all the other taxpayers, the majority of whom didn’t attend college.
“It’s fundamentally unfair to ask two-thirds of Americans who don’t go to college to pay the bills for the mere one-third who do,” Brown writes.
It’s also unfair, he writes, for former college students who were responsible about their loans to subsidize those who weren’t.
As with any debt, there are choices that borrowers make. Some students picked more expensive private colleges than their future income potential could justify. Some didn’t want to do without nice things, so they borrowed extra to maintain a lifestyle to which they felt entitled. Some declined to find a student job or work during the summers because the available jobs were not all that lucrative or glamorous.
Some did all of the above. As a result, their debt is much higher than those who went to public two-year colleges and universities, lived like the poor students they were and worked while in school. Why should the deeply indebted be relieved from the consequences of their choices?
Lastly, and this is not a point Brown makes but others do: Debt forgiveness, once granted, becomes expected. Students in college now, if they see that previous graduates are let off the hook, will expect the same benevolence when their time comes. They will conclude that it would be stupid for them to pay down their loans, since the government will come to the rescue if enough student debtors renege. The entire student loan system will implode under the weight of massive and chronic delinquency.
Starting out in the adult world saddled with debt is difficult. There’s no denying that. But those who are in that pickle could have done some things to make the burden more manageable. Bailing them out now would just encourage them to be less responsible in the future.
