For decades, universities and colleges have sold potential students a bill of goods, promising them that a college education would lead to economic success. The higher the cost of higher education, the greater the return on investment in future earnings.
This may have been true 40 years ago or 50 years ago. College is now a luxury for the upper-middle and wealthy families that can afford a four-year degree. The cost of college is either paid by the dad, who doesn’t mind his child majoring in journalism or environmental law, or borrowed to finance a degree that won’t pay back enough salary.
The colleges keep increasing the cost of four-year degrees because their nanny, the federal government, doesn’t mind the higher costs. It’s a vicious cycle of creating a need and offering false solutions, then raising the price of those solutions, which creates more need as fewer young people and middle-class households can afford college today.
All was well as long as there were more college-age students willing and able to mortgage their future, everything was fine. College enrollments are plummeting and colleges will have to either cut costs or increase tuition. Which do you think they will choose?
Biden’s student debt forgiveness program doesn’t have the biggest problem. It’s not the morality of shifting the burden of student loans from those who are able to afford them to those who cannot. The idea isn’t illegal or unfair.
The problem with the loan forgiveness program is that it invites to create another student debt crisis within a few years. Democrats have not proposed any reforms to any government programs that hand out student loans.
Schools are allowed to raise their prices without any restrictions, despite debunked claims that the state is decreasing its support. Although schools tout their affordability contribution by promoting generous “institutional assistance,” it is often more like a coupon for the financially stable who won’t enroll without it than a scholarship to needy students. This results in a squeeze on middle-class families’ pockets and an increase in debt to pay for degrees that don’t pay.
This is not sustainable.
On the eve before Election Day, student loan debt jubilees cannot solve America’s borrowing crisis. House Republicans gave the president a bold plan to address the student loan crisis that his party had created last month. The Biden administration demanded $2,500 from each taxpayer – even those who have never been to college – in exchange for a plan that will reduce student loan debt by a mere 1-2 years.
This is not a problem with a loan. This is a problem with the government. Although only 30% of student loans are granted by the government, 92% of current student loan debt comes from government loans.
This problem must be solved before students take on $1.6 trillion more in debt they won’t be able to pay back.