Op-ed views and opinions expressed are solely those of the author.
It might be the biggest giveaway in American history. President Joe Biden wants to cancel more than $1 trillion of outstanding student loan debt. Biden has already delayed for more than a year student loan repayment, and under his new rules, most delinquent and deadbeat borrowers would NEVER have to repay.
What a deal for the people who never paid a dime back of the tuition money they owe to Uncle Sam.
This plan makes suckers out of the millions who have felt honor-bound to pay off their debts. My wife spent years after graduating from college diligently writing checks to pay off the tens of thousands of dollars of loans. That’s the way it works when you borrow money and you’ve signed a commitment to pay the money back.
Think about what would happen if this loan repayment policy were to be implemented. Who would ever pay off a student loan ever again after this blanket forgiveness program?
Who would benefit? The most recent Federal Reserve Survey of Consumer Finances found that only 22% of families had student loan debt and that “student debt has consistently been disproportionately held by higher-income families.” So this is a giveaway to the financially successful students and families paid for by middle-class workers, millions of whom didn’t go to elite universities in the first place.
Once student loans move to “free college” for everyone, university tuitions, which are already soaring at two to three times the inflation rate, would race further ahead of all other consumer prices. When I attended the University of Illinois in the early 1980s, the tuition was $1,000 a semester. Now, it’s closer to $12,000 a semester. Where’d all the money go?
The Biden administration has misdiagnosed the fundamental problem here. To wit: Colleges and universities have become fat, flabby and inefficient money burners with no accountability. No oversight. No getting rid of bad teachers and professors. No looking under the hood to see where extraneous costs could be axed.
No demand for tenured professors to teach one or two classes a year.
If student loan debt has to be retired, why should taxpayers pick up the tab? Why not force universities with massive endowments, in many cases in the tens of billions of dollars, to use that money to pay off the debts students incurred while they received virtually worthless, useless sociology, gender studies and psychology degrees?
This would incentivize schools to cut their tuitions and their costs, something the academic elites are desperately trying to avoid.
Democrats think that buying votes this November by making college essentially free will win them elections. But there is no free lunch, and there is no free college. It’s just a question of who pays the piper. And it shouldn’t be YOU.
Stephen Moore is a senior fellow at Freedom Works. He is also the author of the new book: “Govzilla: How The Relentless Growth of Government Is Devouring Our Economy.” To find out more about Stephen Moore and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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5 thoughts on “Stephen Moore: Canceling student loan debt would make college more expensive”
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All subsidies result in higher prices. This is an immutable fact of economics. Oh, the arguments abound about “breaking up monopolies,” etc., but subsidies never actually break up monopolies. On balance, they perpetuate them because the subsidized alternative almost always turns out to be abject crap, making the monopolized standard appear even more indispensable. Central planning nearly always results in less value added than via a free market of ideas. Almost nothing in a free civilization needs central planning to remain viable. A military, and maybe, maybe logistics infrastructure (which to date is horrendous thanks to central planning).
There is a very easy fix for the astronomical rise in tuition costs. Stop allowing foreign students into our universities for 5 years and get the US government out of the education financing forever.
Heard that if forgiveness happens, the student will receive a Form 1099 in the amt. of his loan, just like if it was money earned. Be careful what you wish for.
debt forgiveness is taxable income.
The cost of education increased when the teachers and administration realized that tuition for wealthy foreign students can be increased astronomically. Therefore, through greed, not cost the tuition expenses went through the roof and if the tuition isa certain amount for one student it must be equal for another student.