On Student Loan Forgiveness

I’m not a fan of the idea of student loan forgiveness.

If people got screwed over, we should look into reforming the immoral institutions that did it, and protect future college students.

In most cases, adults chose to make an expenditure. For some of them, it worked out. For some of them, it didn’t. On average, people who have gone to college earn more money than those who didn’t, so there is also a bit of a class element, in the idea that student debt would be repaid for college students, but that blue-collar workers won’t be compensated for the professional investments they made (IE- the purchase of a truck.)

This is one of the biggest failings of the left, as it does seem to be an issue where they’re at fault. The teachers unions that are supposed to make sure that every mainstream graduate is ready for college are a major force in Democratic politics. The employees in academia are likely to be progressive. The main reason college is so expensive is administrative bloat, and regulations mandating unnecessary spending.

An important concept to explain the rise in tuition is the Bowen Hypothesis, which explains how universities consistently seek to spend as much as possible. It seems the main solution is for the people who run colleges to do their jobs better.

The costs in college are ridiculous. The main solution is less government involvement rather than more. One major reason college is so expensive is that there are regulations that mandate spending on things that aren’t essential for educating young adults. If these regulations were carefully altered, it would be possible to start new schools that are much more efficient. Existing schools would also now have an incentive to lower costs a bit in order to compete. Why should student loans be forgiven when universities who are so wasteful many of their students are in debt are making no effort to respond to Bowen’s rule and cut every penny of inessential spending?

One counterargument is that student loan forgiveness is about helping people who had bad luck, but there is an element of choice in the decisions to pay or not pay loans. Obviously, for some people the reason they’re able to pay their student debt faster isn’t because they worked harder, or because they made wise decisions (IE- picking a stem major rather than something that doesn’t correlate to high income.) It may be because they had relatives who worked hard (or wealthy relatives who didn’t work hard) and sometimes there will be some kind of lucky break. Likewise, some people who aren’t able to pay their debt could have tried hard, but had bad luck (entered the job market at the wrong time, needed to take care of other expenses a prudent man would consider worthwhile, etc.) However, on average, the average person who has paid off their debts is more responsible than the average person who has not. We should generally encourage people to pay off their debts as quickly as is prudent. There may be a place for government intervention for people who are unable to pay college loans, but this works better if that number is as low as possible.

Conservatives do tend to argue that life isn’t fair, and you should put yourself in a position to do something about that. Typically, doing something is working harder, or working smarter (selecting professions with upward mobility, moving to locations where jobs are available) rather than taking money from people who are lower on the income level, or who have taken care of their responsibilities.

Sometimes we have targeted aid at people affected by a specific problem, especially if there’s the understanding that a failure to fix that problem immediately has consequences later (IE- bank collapses will take down a lot of people.) In these comparisons, we have to consider the amounts of money. The auto bailouts cost about $17.4 billion. The estimate for the debt cancellation comes to about $519 billion. This decision just incentivizes colleges to keep screwing up with the understanding that political allies will help them out.

Supporters of student loans will compare it to Republican views on taxes. Tax cuts are different because that’s a decision to take less money from people by force, rather than a decision to take more money from people by force. We can believe that a particular tax or use of taxpayer funding is worthwhile, but that’s a different question.

Sometimes people will bring religion into it, with the implication that Christians should be happy with taxpayer money paying off loans. Religious conversations are very quickly going to be messy. If someone has very different values, any discussion of their views may end up being an argument about a caricature. Personally I would not want to make any policy decisions based on my understanding of theology. It would be shameful to waste other people’s money because I lacked the historical context to understand some bible passage.

Government aid is also distinct from charity, since this is not about people making the decision to help others, but it’s the government taking money from others to pay a group that is on average more privileged (most Americans did not finish college) and where the people who screwed up tend to be Democrats (the people who run teachers unions and colleges), who are overrepresented among the debtors.

There is another argument that colleges should be extensions of public schools, costing just as much. We should make K-12 better so that college isn’t seen as the way to get the barest socially acceptable education. I certainly agree that we should have more of these alternatives available and look into reducing requirements that job applicants have college degrees.

I’m also curious on the implications here in shifting to a public school model for colleges. How would you have any quality control? What restrictions will there be on students when money’s no longer a limit?

With the idea that the government should run things more efficiently, spending isn’t a binary where the only choices are that it’s obviously essential or obviously wasteful. There are things that are defensible, but shouldn’t be mandatory. Should the government make it illegal to have a fancy student activities center? Should they provide some kind of bare minimum alternative?

One idea was to have students pay back a portion of their salary, although there is a potential perverse incentive here. It’s a much better deal for colleges that have law schools, since those students would be expected to make more money, and it rewards colleges for discouraging students from going in to less financially rewarding work (IE- public defense, government.) Law schools are going to want students who will get paid a lot of money to call Harvey Weinstein’s accusers liars rather than anyone who might work for the Legal Aid society.

We’ll see how the voters who don’t have student loans respond to policies that are going to favor those with above-average income.


About Thomas Mets

I’m a comic book fan, wannabe writer, politics buff and New Yorker. I don’t actually follow baseball. In the Estonian language, “Mets” simply means forest, or lousy sports team. You can email me at mistermets@gmail.com
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