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How Not To Solve The Student Loan Crisis

Democrats must be expecting that tsunami of young voters to finally hit land in 2020. Why else would Bernie Sanders and Elizabeth Warren be in an arms race to see which one can give away more money to solve the student loan crisis?

Warren has a plan to tackle this problem. (Warren has a plan for everything from global warming to overdue library books.) She plans to make college universal by instituting an “Ultra-Millionaires tax.” That means higher taxes to give free stuff to young people. In addition, she’s proposing a $700 million student loan forgiveness fund. Not to be outdone, Bernie Sanders is proposing complete forgiveness of all $1.6 trillion student loan debt.

I’ll give the Democrats credit for one thing: they may be coming up with BAD ideas, but at least they are coming up with ideas. All I’m hearing from Republicans are crickets. Judging from my Twitter feed, the Republican plan is “you borrowed it, you can pay it back.”

Surely, there has to be a solution for this problem somewhere between “free everything for everybody” and “tough luck, you losers.”

Elizabeth Warren blames student loan debt on the government giving tax cuts to billionaires. That’s not even remotely close to being true. The government DID create this problem by allowing it to exist in the first place. The more money we’ve shoveled into higher education, the more tuition has risen. Since taxpayers were guaranteeing the payment of student loans, colleges switched from providing scholarships to filing for “financial aid.” That means they force all students to look to the government FIRST for grants and loans before the schools themselves kick in any assistance. In addition, they’ve sealed the back exits by making student loan debt non-dischargable through bankruptcy. That means that if a student does make a foolish choice in borrowing too much, there’s no way out of it.

If we go with the Warren/Sanders plan, there will be no end to this insanity. What would happen if all public colleges became tuition free? Could they possibly meet all of that demand? Would the quality suffer? Would employers then place more of a value on private diplomas? The truth is, we have too many people seeking four year degrees NOW. Making them free will only make it worse. After all, why go to work at 18 when the taxpayers have to foot the bill for 4 more years of your education? And if every young person in America gets a Bachelor’s degree, how long will it take before the push to make grad school free starts? Will future Americans have to stay in school until they’re 30 to get a decent job?

Forgiving existing debt would also be unfair to all of the people who worked so hard to pay theirs off. And to those who joined the military or turned down admission to expensive private colleges in order to save money. On the other hand, student loan debt has the potential to crush us all. I read a story last week that Baby Boomers are having a hard time downsizing their homes because young people can’t afford to buy them. What happens to real estate and construction when so much money is going to repay college loans? Will young people be able to start their own businesses? Save for retirement? Put their own kids through college?

It’s always easy to win over voters by promising them other people’s money. It’s a lot harder to come up with real solutions for real problems. Student loan debt IS a real problem – not just for the young people stuck with it, but for ALL of us. And we all need to be a part of the solution.

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