Kari Stadem: Student loan forgiveness is a bad idea
In a recent article in the West Central Tribune on student loan forgiveness, the reporter told some sad stories, but gave only a brief glimpse into one of the reasons student loan forgiveness is bad. idea. I can think of at least five:
- We are constantly told that university graduates earn more than others. The forgiveness of student loans takes money from taxpayers without a university education to repay loans given to people with a college education. It is unfair.
- Many college graduates have been saving and saving for years to pay off their student loans. Now they have to pay taxes to pay off other people’s loans. It is unfair.
- Many people came out of high school and didn’t choose any college, community college, or public school over private schools that they could have attended if they had known it would be “free.” Now they have to pay taxes to repay the loans of people who have chosen this more expensive route. It is unfair.
- We are told that canceling these student loans will help the economy as a whole. But the government doesn’t have the money to write off student loans; he will have to borrow it. If student debt is bad for the economy, how can rising US debt be good for it?
- If student loans are canceled, colleges will have even less incentive to make their product affordable.
Some possible options for government action:
- Set a cap on the amount of student loans allowed per person.
- Ban the “capitalization” fees the article talked about, at least for student loans.
- Allow student loans to be wiped out in bankruptcy; in this way, the banks are required not to lend too much to people.
In my day, only about 17% of people had a college degree, which made it a ticket to the “good life” financially speaking. Today, around 40% of people graduate with a degree, which is why it is not as valuable financially as it used to be. High school students, make decisions accordingly.