Forgive Student Debt? Hell, No.
Bernie Sanders, or let’s be honest someone under 40 on his staff, just tweeted “Cancel student debt. All of it.” Albeit in a crowded field, this one of the dumbest ideas the Left currently have going. Not dumb in the sense that it won’t get them votes; it well might, just dumb in the sense that it is a terrible, terrible idea. And yet, it is slowly cementing itself as part of the Democratic Party’s basic platform. The Biden Administration has just extended, yet again, the suspension of interest payments on student loans, ostensibly because of Covid, although with very low unemployment that is an unlikely reason for most borrowers being unable to pay and there is no means testing involved to find out. So far, the government’s forgiveness of interest owed on student debt during the Covid period has cost taxpayers hundreds of millions of dollars, as usual, borrowed. The truth is, Democrats are inching towards nationalisation of student debt, and the printing of another few trillion dollars in the name of equity. It’s hard to know where to start arguing why this is a bad idea, but let’s try.
First, the obvious moral argument: if everyone went into debt with open eyes and knowing what they were doing, why should some people get their debt written off, while others have saved and scrimped to pay theirs off? Why not forgive all mortgages, or car loans, or any other loan freely entered into? The answer, of course, is because that would be un-American. We are a country of individuals, of strivers, of risk-takers, and of self-sufficiency. Eliminate the risk/reward calculation of capitalist business, and all that is gone. In America, good choices, hard work, and good luck reap rewards. In socialism we are all equal, but at a much lower level. College is free in Cuba, but they don’t serve sushi at lunch or have a special kennel for your service cat.
Second, there is the utilitarian argument: socialists want us to eat other people’s debt, so what’s in it for us? The U.S. needs rural doctors, nurses everywhere, skilled mechanics and tradesmen, truck drivers, and a host of other skills in specialty occupations. If the idea were to subsidise, or grant concessionary loans in those fields, one could argue that the taxpayer would ultimately benefit. Blanket debt forgiveness, however, would encompass not only marketable degrees, but all kinds of useless qualifications in ersatz fields that prepare their recipients only for working as waiters or delivery drivers. I have nothing against those professions – I’ve done both. But I didn’t need a degree to do them, and if I had, it would not have crossed my mind to expect others to pay for it. Western Europeans have essentially free college for those with high school diplomas. The catch is that the classes are huge, the facilities extremely basic, and the support is close to zero. The general idea is to weed out half the students each year until there remains only a hard core of those able to take the punishment. Animal House’s Faber College, it is not. The U.S. higher education system has always been capitalist: you pay a lot up front, and if things work out, you make it up with superior earnings later. Alternatively, you go to lower-cost state school, community college, or other paths where you work and study as you go. It’s your choice.
That combination worked for a long time, but somewhere around the 1980s, the cost of a college education as a percentage of average middle-class earnings rose disproportionately, to pay for bloated administrations, ever grander facilities, and other fripperies not mission critical. The University of Michigan now spends more on ‘Diversity, Equity, and Inclusion’ efforts than small colleges do on academics all together. We’re now at a point where a decent private college is in the $50-$70,000 range, well above the median national salary. Many choose to borrow for this experience, with debatable returns. The Wall Street Journal did a study on college costs recently, ranking degrees by debt/average earnings in the first year after graduation. Not surprisingly, marketable skills like nursing or accounting from state colleges work out better value than gender studies degrees from private liberal arts schools. I believe that a film studies MA at Columbia came off rock bottom, at something like $350,000 in total debt to $35,000 average salary on leaving, or a 10/1 ratio. According to Bankrate, graduates in Construction Services make around $80,000 a year and only 1% of them are unemployed, whereas Visual and Performing Arts grads make $35,000 and 3.5% are unemployed (and many of them are actually making that salary serving coffee). Why should anyone, other than the dreaming student or their loving parent, take on this level of debt? Why on Earth would the U.S. taxpayer, particularly one without the option to spend two or three years watching obscure cinema in Manhattan, be expected to absorb the debt, when the recipient will be unlikely to find a job in a related field to pay the taxes back?
A third reason to reject the nationalisation of student debt is that it’s undeserved and distorts an already unbalanced market. Colleges today, from obscure to Ivy League, are dumbing down curricula, lowering entrance standards, inflating grades, and pandering to woke, demanding students in a way that disgusts those outside the leftist bubble, such as the hard-working adults who never had the chance, or just preferred not to, go to college. To take one of so many examples, when Jeff Younger, a local political candidate in Texas who is also trying to prevent the chemical castration of his allegedly transgender son by his estranged wife, tried to speak by invitation at the University of North Texas, he was shouted off the stage by a mob. (UNT Link). Watch 5 minutes of this and ask yourself if you’d like to forgive the debt these kids took on for whatever they plan to do with their degrees. Such utter lack of respect for differing opinions and free speech is not just evident at down-market schools like UNT, it has taken the high ground of Princeton, Harvard, and everything in between. Watch this clip of Professor Nick Christakis of Yale bravely attempting to reason with an empowered student street-trial Yale link and you have a rough idea of the current state of campus tolerance for diversity of opinion and thought.
I’ll offer a fourth and final reason to end the pause on student loan interest and stop even considering total loan forgiveness: student borrowers made adult choices, and they need to learn to live with them as part of growing up. Don’t borrow money for a couch or a television, ever. Don’t borrow money for a car if you can’t handle the repo when things go south. Don’t borrow for an education unless there is a reasonable chance of it paying off. These things used to be obvious, or you found out damn quick through experience. However, college today is teaching kids about a parallel universe where thinking righteous thoughts has no financial consequence, and your degree in LGBTQ-etc. Studies should be equally valued by Raytheon as someone else’s engineering degree. Elite U.S. colleges are failing to teach the most important life lesson of all: it ain’t fair. As we said in the 80s, “life’s a bitch, then you die.”
As an example of how far out some of them are, Oberlin College in Ohio just lost an appeal, costing the ultra-woke liberal arts college more than $30 million dollars in damages to a local shop in a completely avoidable ideological kamikaze run. In November 2016, three Oberlin students were in Gibson’s Bakery, and on leaving one was caught by a store employee stealing a bottle of wine. The students were black, the employee (a son of the store’s owner) was white. The police were called, and they arrested the students, who eventually pled guilty to a misdemeanor in 2017 (and, notably, stated publicly that the Gibson’s employee had been motivated to stop a crime and not by racism). Notwithstanding the facts, purely because of the races involved, Oberlin students went all-in on the accusation not only that this incident only happened because of racism, but that Gibson’s Bakery had a history of racial profiling. Amazingly, the College’s leaders did not do the adult thing and mediate a quiet solution to what was hardly an original case of students misbehaving. Instead, they went beyond merely backing the students’ right to protest, however unfounded, by re-publishing defamatory leaflets, amplifying student demands and accusations, and finally cutting off Gibson’s contracts for food service to Oberlin, which were a significant part of the bakery’s revenue. An incident where a student shoplifted some wine, and two others were unruly in resisting being caught by the store employee and then arrested, was cranked through a ‘critical racial lens’ and turned into a debacle for all concerned. If there were lessons learned by any party, they were not the right ones.
Oberlin, as left-wing a school as they come, was perhaps unusually susceptible to this kind of angle, but it is still surprising that it failed to provide the cooler administrative heads that would have saved millions of dollars and let everyone move on with their lives, wiser for the experience. By assuming that right could only be on the side of the students, and putting the entire weight of their institution behind them without considering the facts of the case, Oberlin’s administrators sent the message that facts in a criminal case don’t matter, only the ‘intersectional’ identity, in this case the race, of the individuals involved. It's worth noting that they also cost their insurers, and surely the College through higher future premiums, enough for a year’s tuition for 500 students at current rates, which is 1/6 of the entire student body. Thirty million dollars could have paid the tuition of all 163 black Oberlin students for all four years, which would presumably have advanced social justice more than enriching the poor Gibsons, whose business is probably going to be sold anyway.
Oberlin College should have learned a hard lesson about justice, money, insurance, debt, and the cost of bad decisions. Probably, they’ll just blame it all on ‘structural racism’ and raise more than enough money from their liberal donors to make it up. But their students, like all students, should learn the realities of supply and demand, debt and interest, probabilities of investment and return, and that life is a trifle more competitive than they are being told. Forgiving student debt would teach them, like Oberlin tried to, all the wrong things.
Excellent John! Thank you! So glad to have the values we were raised with! I put myself through nursing school with part time jobs, no car and most likely the same couple pairs of jeans. I wouldn’t have it any other way!