Why Student Debt Cancellation Is Reasonable, Not Radical

Yves here. As sometimes happens, yours truly will beg to differ with the premise of a post. The problem is any debt cancellation scheme will not be fair. There will be limits. Some will be enriched who are able to pay and others will not get sufficient relief. More complex means testing to try to increase “fairness” will work against those who lack the patience and intestinal fortitude to navigate bureaucratic obstacles. That will work against the arguably most deserving, those who stated a college program and were unable to complete it, and therefore did not get the expected sheepskin income bump.

And what about people who are in school now, accumulating student debt? Without root and branch reform of the student loan system, debt cancellation is just a gimmick. But the Democrats will never support such a move. Student loans are a massive subsidy to the higher educational complex (witness the explosion in tuition, and as a result, adminisphere bloat) and the higher educational complex is a Team Blue bastion.

What is truly appalling is Elizabeth Warren’s cowardice in never once advocating for bankruptcy relief for student borrowers. As the one-time top bankruptcy law professor in the US, she was fully aware that under the 2005 bankruptcy law “reforms,” student debt became the only type of personal borrowing that could not be discharged in bankruptcy. Despite conservative claims to the contrary, bankruptcy is a painful process and also hurts the ability to get a job, so it’s not prone to abuse. The ability to discharge debt in bankruptcy would not only give borrowers who were unable to repay relief, but could also provide borrowers who were in distress and looked to be on track to financial collapse to negotiate writedowns or restructurings with lenders.

By Sonali Kolhatkar, an award-winning multimedia journalist. She is the founder, host, and executive producer of “Rising Up With Sonali,” a weekly television and radio show that airs on Free Speech TV and Pacifica stations. Her forthcoming book is Rising Up: The Power of Narrative in Pursuing Racial Justice (City Lights Books, 2023). She is a writing fellow for the Economy for All project at the Independent Media Institute and the racial justice and civil liberties editor at Yes! Magazine. She serves as the co-director of the nonprofit solidarity organization the Afghan Women’s Mission and is a co-author of Bleeding Afghanistan. She also sits on the board of directors of Justice Action Center, an immigrant rights organization. Produced by Economy for All, a project of the Independent Media Institute

“Nobody’s telling the person who is trying to set up the lawn service business that he doesn’t have to pay his loan,” said U.S. Supreme Court Chief Justice John Roberts during oral arguments about President Joe Biden’s student debt forgiveness plan. Roberts continued his logic on behalf of this hypothetical lawn service operator, saying, “he still does, even though his tax dollars are going to support the forgiveness of the loan for… the college graduate, who’s now going to make a lot more than him over the course of his lifetime.”

It’s remarkable how concerned Roberts and other conservatives have been about the exploitation of the average American when it comes to loan forgiveness. The Supreme Court’s chief imagines that college graduates will go on to make enough money to pay back their loans and they are choosing not to—apparently in order to take advantage of business owners like lawn care operators.

Does Roberts not think the lawn business operator may be college educated and have student debt? Or that perhaps a college graduate might like to open a business but is financially stuck paying off huge loans?

Associate Justice Ketanji Brown Jackson, the newest member of the court and the first Black woman in the nation’s history to be appointed, had a very different take. She rightly asked, “I’m wondering whether or not the same fairness issue would arise with respect to any federal benefit program.”

Indeed, why is it fair for only people over the age of 65 (and a few other categories of people such as veterans and very low-income people) to qualify for government-funded health care? Those who don’t qualify for such government programs pay for others’ benefits via our taxes because that’s the point of taxes—to pool together a cut of everyone’s personal income and help pay for the things that make society better, fairer, more livable.

But it’s this very point that conservatives see as anathema to their grim worldview, the one that Ayn Randbrought to life in her (unintentionally) dystopian novels.

Justice Jackson continued her thought process, saying, “I just don’t know how far we can go with this notion of, to the extent that the government is providing much-needed assistance to people in an emergency, it’s going to be unfair to those who don’t get the same benefit.”

Indeed, student debtors are in trouble precisely because they didn’t get the same government benefits compared to their predecessors. According to Business Insider, “From fall 1973 to spring 1977, boomers paid around $39,780 in today’s dollars for four years of public college. That’s a little more than half the cost for millennials attending public college from fall 2006 to spring 2010: $70,000. And what Gen Z is paying today is more than double that: $90,875.” This is directly the result of the federal and state governments paying less toward the cost of higher education and shifting more of the cost of college to individuals.

If Roberts’s hypothetical lawn care business owner hails from the baby boomer generation, then the question of fairness is turned on its head: Why should older generations have benefitted from tax-subsidized college education (thereby helping them avoid debt), when younger generations have not had the same advantage?

If the Rand-ians could travel back decades in time to rectify this, they certainly would roll back all government benefits aimed at middle- and working-class boomers.

If Biden could go back a few months in time, he would have done better to be more aggressive in his approach to debt relief. In August 2022, after dragging his feet for years to make good on his campaign promise, the president invoked emergency powers in light of the COVID-19 pandemic—a weak basis—for justifying debt cancellation.

Debt experts like Harvard Law School’s Eileen Connor make a persuasive case that Congress has given the secretary of education the authority to make—or waive—college loans. In other words, with the stroke of a pen, Education Secretary Miguel Cardona could forgive all student debt. According to Connor, he would have the legal right to do this under the 1965 Higher Education Act signed by President Lyndon B. Johnson.

Instead of using the 1965 law as the legal basis for his actions, Biden chose the 2003 HEROES Act, saying that he had the authority to pause student loan repayment because of the emergency conditions created by the COVID-19 pandemic. Dalié Jiménez, a law professor at the University of California, Irvine, called this an “unsurprising compromise,” and added that “[t]ime will tell if it was the right thing” to do.

Time will indeed tell. Emergencies are, by definition, temporary. In August 2022, Biden used the pandemic to make his case for debt cancellation. Then, in September, he declared the pandemic over. He ran out his own clock.

Nebraska’s Republican attorney general, Mike Hilgers, pointed out in a Wall Street Journal op-ed that, “The president can’t have it both ways. He can’t tell the country the pandemic is over while claiming that it justifies this unilateral action.”

As I explained in an analysis last year when the president first announced his plan, it was a paltry gesture that could have gone so much further. Given that Biden would face the same stiff opposition whether he forgave $10,000 or $100,000, he should have aimed higher and been more aggressive. Instead, his actions indicate that he too may be unswayed by the unfairness of student loan burdens.

Conservatives are also predictably touting the high cost of debt relief—“We’re talking about half a trillion dollars and 43 million Americans,” reminded Justice Roberts during the February 28 oral arguments. Lawmakers, including most of the liberal ones, rarely balk at the much, much higher annual cost of funding the Defense Department.

Unlike the cost of maintaining a perpetual war machine, Biden’s (far too modest) debt relief can impact the lives of 43 million living, breathing human beings. One debtor, 26-year-old Ella Azoulay, told Associated Press that her 2018 degree from New York University has left her with $40,000 of debt. Her father is even worse off, having taken out more than $400,000 in loans to educate his three children. For many borrowers, Biden’s plan would eliminate just a fraction of their debt.

What does $10,000 to $20,000 in debt forgiveness mean for an individual? For those people whose repayment plans were paused during the pandemic, a CNBC survey found that resuming payments would impact their ability to pay off other loans, as well as save for retirement or buy a home. A small minority said it would impact their decisions to get married or have a child. So, we’re talking about serious life decisions.

Ayn Rand, near the end of her life, benefitted from the same welfare system she railed against. Government benefits are easy to dismiss and denounce—until you need them.

Meanwhile, what does $10,000 to $20,000 mean for the wealthiest Americans? So little that it would not even cover the price tag of this $32,500 Hermes handbag. According to the Financial Times, the market for luxury goods is booming. Further, “wealthy people have more time in which to spend their money, since they now live roughly a decade longer than their low-income counterparts, thanks to better health care, diet, nutrition and rest.”

There you have it. If fairness is the basis for deciding whether or not to forgive student loans, conservatives would do well to examine such disparities.

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37 comments

  1. El Slobbo

    This is all too milquetoast. You want fair? Then how’s about any American alive who has received a student loan or purchased their own education can raise a claim for a full refund? Education as a benefit of citizenship.
    Take the money from the war budget. Nobody will notice.

    Reply
    1. eg

      As your penultimate sentence infers, the ONLY way student debt forgiveness will ever happen in America is when the neocons decide that not doing so would somehow imperil their precious MIC …

      Reply
      1. Glen

        From where I work in a very large factory which also makes big MIC stuff, it’s chaos. It’s really bad, and I don’t see it getting better any time soon. Our work culture is breaking down.

        I think upper management (CEO, VPs, etc) are not aware of how bad it is because at some level in middle management the tall tales start so that they can maximize their bonus (which are considerable), and the CEOs/VPs wont push back because it means THEY also get big, big bonuses. We’re not entirely sure of all that because we don’t routinely get to sit in on management meetings at the higher levels, but that’s our best guess.

        Can the company get big MIC contracts? Sure. Can we actually make stuff? Well, that’s the billion dollar question isn’t it.

        I think student debt relief may help. This company worked best when you hire engineers right out of college, get excellent techs out of the trade schools or military, and smart well educated people on the factory floor, and they settle in and work a full career, but those days are gone. The old time engineers that knew the extremely complex products like the back of their hand are almost all gone. Our smartest mid career engineers leave for better pay, and so do the best factory floor workers. There is no more pension, and quite frankly upper management spent decades lowering the pay and benefits so our pay is no longer competitive.

        But win a new Cold War? Man, I don’t see how from the view I got. American elites spent forty years wrecking the work force that made that possible. To be honest, it really pisses me off, probably because I spent time in the service during the first Cold War, and met many vets that had gone to fight (and most never come fully back). Call them naive, but they’re mostly just good people trying to do something right.

        Just my 2 cents from the factory floor…

        Reply
  2. notabanker

    because that’s the point of taxes—to pool together a cut of everyone’s personal income and help pay for the things that make society better, fairer, more livable.

    When I used to read fairy tales, I fancied that kind of thing never happened, and now here I am in the middle of one!

    Reply
  3. Katniss Everdeen

    If you’re talking about “fairness,” how is it “fair” that the lawn service business owner can file bankruptcy in the event that his business fails and the student debtor cannot? Or how is it “fair” that an individual can charge up his credit card beyond his ability to pay, erase the debt in bankruptcy, and pretty much keep the stuff he “bought” while the student debtor cannot?

    But since when did the “supreme” or any other “court” for that matter get into the “fairness” business anyway?

    Their job is to rule on the technicalities of the law. Full stop. Do the petitioners have standing? Are the actions of the biden administration consistent with his constitutional power as president?

    This stupid court certainly didn’t concern itself with the “fairness” of ripping away a federal guarantee of abortion rights that had become the de facto law of the land, and on which two generations of women had come to rely.

    Reply
    1. Grumpy Engineer

      The Supreme Court gets involved in the “fairness” business because of the 14th Amendment: “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

      That last clause is key. People are griping because this one-time debt forgiveness is of no help to those who those who diligently paid off their loans in the past, nor is it of any help to those attending college right now or might attend in the future. My niece started college back in September. She and her classmates will likely have more debt than any class before them (as that’s been the relentless trend), but the debt forgiveness is not for them. Why should repayment expectations vary so much for different groups of people simply because of timing?

      But on the other hand, your point about business owners or credit card borrowers being able to file for bankruptcy when student loan borrowers cannot is absolutely on target. Perhaps some students should band together and file a civil rights lawsuit against the US government for treating federal student loans as more worthy of ruthless repayment rules than other debt. Why is one class of borrower able to shed excess debt through bankruptcy, while other borrowers cannot and must carry the debt burden to the grave? Sounds like a solid argument based on the “equal protection” clause to me.

      Reply
      1. Janeway

        A slight gripe on the legal analysis for ‘equal protection’ – assume that the law said owners of lawncare businesses can discharge their business debt, but owners of hair salons cannot. That would violate the equal protection clause.

        Unfortunately, since the law says government backed student loan debt is non-dischargeable for all borrowers (absent showing hardship that is so high a standard that it is nearly impossible to meet under the Brunner test), the equal protection clause is not violated.

        It’s a big club and we ain’t in it.

        Reply
        1. Grumpy Engineer

          Well, that’s a bummer. I personally think the “equal protection” clause should be interpreted more broadly, so that laws that treat slightly different things as radically different could be overturned or modified. Such laws make our legal system look arbitrary and unfair, and they’ve frequently resulted in real injustices. Student loans vs credit card debt. Crack cocaine vs powder. Taxes on earned income vs capital gains. It’s not hard to think of examples.

          But alas, I’m not a lawyer, and what I think does not go.

          Reply
  4. John R Moffett

    When I went to college in the 1970s, it was free at most community and state colleges. I was an out-of-state graduate student at Cal State Sacramento in the late 70s, and even as a non-resident, tuition was $50 per credit, or $150 per course. The monetization of education is one of neoliberal capitalism’s more egregious harms done to our society.

    Reply
    1. Paul Art

      Fees for one course in the Digital Signal Processing Certificate course at Purdue [which is basically any one of the grad or undergrad courses at the 400 level] is anywhere from $3000-$4000. This is in-state tuition. Some other kind of ripoff happens when you try to pursue continuing education. This is surprising because you are in the same class with other Senior undergrads and yet they are ripping your face off.

      Reply
  5. Alice X

    The other day, in noting Roberts’ example of a lawn care business, Democracy Now pointed to a small lawn care business that had $300.000+ in debt forgiven by the government. So there is that.

    And then there are people, like myself, who never took out a loan. Maybe that is a parallel to Roberts’ thinking, but I certainly don’t object to student debt cancellation. State colleges should have been free all along.

    Recently it was noted that an advisor to then CA governor Reagan, when he was reversing State funding for higher education let slip this quip: we don’t want an educated proletariat. Or something to that effect.

    Reply
  6. Louis Fyne

    The debt relief “controversy” is a red herring as the path of least resistance has ALWAYS been: just change the Bankruptcy Code.

    Any concern about abuse, etc. could have been codified. A simple, reasonable compromise is no discharge for debts accrued within the past 12 years.

    Democrats could have changed the Code any number of times since 2009 (just like delivering on Medicare for All, etc), but don’t because quite simply—DC Dems. love to abuse their base, and their base lets them get away with it.

    Travesty that, for example, GM shed/restructured its debt through bankruptcy, but a GM assembly worker can’t. (because in this case the Dems’ real base is the higher-education complex that needs a constant stream of revenue to fund its administrative bloat)

    Reply
    1. Grumpy Engineer

      Aye. Changing the bankruptcy code is absolutely the first action that should be taken on any student loan reform. I very much agree with Yves’ assessment that it’s “a painful process and also hurts the ability to get a job, so it’s not prone to abuse“, and I think it’s enough of a deterrent that people would only file for bankruptcy when they’re truly drowning financially. Which, alas, a lot of student loan borrowers are.

      Of course, the fact that so many borrowers are drowning brings me to the second action that should be taken on any student loan form: Limit loan sizes so that students don’t get into trouble in the first place. The Wall Street Journal had a nice series on this back in 2021 (https://www.wsj.com/articles/financially-hobbled-for-life-the-elite-masters-degrees-that-dont-pay-off-11625752773), where they interviewed a bunch of former master’s students who were drowning in debt. Alas, it’s behind the paywall now.

      But to summarize, the median debt for masters of fine arts students was $181k, and their median salary post-graduation was less than $30k. This is a ruinous debt load relative to income. It was deeply unethical for Columbia University to have encouraged these students to take out so much debt, and it was deeply unethical for the US Department of Education to have lent them so much money when it was obvious that most would be unable to repay.

      Reply
  7. the suck of sorrow

    Make the student loan debt cancellation universal, that knocks the legs out of this lawsuit.

    For the future, make higher education at publicly funded institutions tuition free. Eliminate student loans, let private universities loan money for fees from their endowments. Too provide grants and guarantee part-time work for room and board at public institutions.

    I know, won’t happen, but it should.

    Reply
  8. Rip Van Winkle

    Simply mail out $10,000 checks every month to every person in the country. Those with student loans must use them to pay off same. When all the strident loans are paid stop the checks to everyone.

    Reply
    1. JR

      One thought here is that one would want harmony of tax treatment between those who receive the money and don’t have to pay off debt and those who receive the money to pay off debt. If the receipt of money by those who do not pay off debt is taxable, then there is a general parity tax treatment between the two groups. If, however, the receipt of money by those who do not use it to pay off debt is not taxable, the tax “cancellation of indebtedness” doctrine (which, very generally, treats the cancellation of indebtedness as taxable income) would have to be turned off for those who must use the money to pay off existing debts.

      Reply
  9. Domofdoom

    What about bailing in colleges ie asking them to cover, for instance, the first 5000 dollars of any defaulted debt? That would make them think about their bloated admin costs and about loading kids who don’t know any better with oodles of debt. That same behavior on the part of financial lenders would be labelled predatory….

    Reply
  10. Carolinian

    As always these days it’s about the framing by both sides. It’s true that we boomers had it a lot easier when it came to affording college and also true that back then there was a nominal 90 percent top tax rate. If your are going to run a welfare state or partial welfare state–and social comity suggests we must–then you have to go to where the money is. And neither party wants to do this. By suggesting the problem is all about Republicans people like the author are merely tools of the plutocrats who are really the ones making those young people suffer. As Yves says above the Democrats are just as guilty and probably more so given their deep alliance these days with billionaires who fund their party. And yet they pretend to be populists. Until they renounce this hypocrisy nothing will happen.

    Reply
  11. The Rev Kev

    I suppose that the general plan is to make student debt so expensive eventually, that only the kids of the top 20% will be able to attend higher education. And of course when they finish their education, they will go on and make up top government and corporate positions. In some ways it sound like the British Army of the early 19th century where virtually all of the officers were recruited from the landed gentry with the wealthiest of them going to Regiments like the Royal Horse Guards, the Life Guards, etc.

    Reply
  12. eg

    John Roberts is a disingenuous familyblog — he knows damned well that the lawn service operator can avail him/herself of bankruptcy while the student loan holder cannot.

    Reply
  13. PE Bird

    I wonder “who” owns all the student debt – I imagine it is kind of a hot potato financially speaking. Just as mortgages (loaned to people who could not pay) were sliced up and sold in the market, it might be that student debt (loaned to people who could not pay) has been treated similarly.

    So, is it possible that some large portion of the public unknowingly “owns” student loan debt via retirement funds and other investment vehicles? Wonder who will be bailed out this time.

    Reply
  14. orlbucfan

    John Roberts is a craporate (corporate) toadie. That’s why he’s where he’s at. How about cutting a good chunk out of the $$hide$$ of the MICC parasite? THAT would pay for more than just student loan forgiveness.

    Reply
  15. Watt4Bob

    Seems to me that the economy-saving effect of the Jubilee that Michael Hudson advocates would be immediately demonstrated by the injection of $1.7 Trillion in Student debt relief?

    Want another idea?

    Universal reparations payments to all Americans, not for historical greivances done anyone’s ancestors, but for the damage done to all of us under the neoliberal campaign of austerity that has been waged since the Powell memorandum.

    IOW, in order to stave off the coming civil war/depression,(there is wide-spread fear that something nasty is looming) every American gets a figurative 40 acres and a mule.

    Fair is fair, everyone is treated that same, we are all compensated equally for the incredible damage done to our country and strange as it seems, it would even benefit the a**holes who did the damage.

    Canceling student debt would provide a perfect experiment to test Michael Hudson’s Jubilee idea, and could even be framed in that manner.

    Reply
  16. KD

    The politics of this issue is pretty simple. College educated vote overwhelmingly Democrat, non-college vote overwhelmingly Republican. Educational polarization is one of the greatest points of political cleavage in the electorate. Student Loan relief mostly benefits a Democratic constituency so there is no reason why GOP should support it. In addition, its basically welfare for college grads, so opposing relief can be framed politically as punching up especially with a hard-hat constituency.

    Reply
    1. Carolinian

      Well yes. And presumably the reason Biden has been playing cute with the issue (Turley said the SC would strike it down) is that they don’t have the votes to make it happen in Congress. What Roberts said simply reflects what fifty percent of the country is going to say and they have Congress people to represent them.

      If you are going to take on inequality and the necessary approach to remedy it you need a political party with that program. The Dem’s only pitch these days is “we’re not the Republicans.”

      Reply
  17. kriptid

    My own personal anecdote to add to the muddle:

    I took out around $40k in student loans from the FedLoan program for my undergraduate degree. I went to my state school and was very conscious of the debt I was taking on.

    Before getting my PhD, I spent three years working in my field and dutifully paid way more than required on my loans, knowing that making minimum payments was a road to permanent indebtedness. In the span of three years, I had the $40k down to $8k, which was the balance I took into graduate school. The only loans left were interest deferred until I completed graduate school, meaning the $8k would stay $8k until I graduated.

    As a Pell grant recipient, I am eligible for up to $20k in loan forgiveness under the current plan. However, due to my fiscal responsibility detailed above, I only owe the remaining $8k.

    Should the loan forgiveness plan hold, I will be happy to be free of the remaining $8k. However, I am out $12k for being too responsible and making the assumption that it would be prudent to pay my debts off early.

    That’s $12k that had I invested in the S&P when I graduated, would be worth something like $25k by the time my deferred loans came due after graduate school. I could have merrily paid the $8k and walked away with $17k debt free in this scenario.

    I’m sure there are others in a similar situation. As I said, I will happily take the $8k, but the taste will be bittersweet knowing that had I just been less responsible, I would have come out way ahead of where I am now.

    Reply
  18. Kyle

    Student loans are predatory leading. Full stop.

    They will give them to anyone, with little understanding of the terms, and once you have them, they are stuck with you until they are paid off – even follow you to the other side.

    Not to mention – payments have been stopped for 3 years, the world haven’t collapsed, why not just wipe it clean all around and make college government funded (it already is) and free to citizens.

    Reply
  19. lincoln

    The U.S. currently has $1.7 trillion in outstanding student debt, which is $150 billion higher than all our outstanding auto loans ($1.55 trillion), and over $700 billion higher than all our outstanding credit card debt ($986 billion). The only category of consumer loan that is larger is home mortgages. This category of consumer debt is in such a dire situation that the U.S. federal government has had to pause all federal student loan payments for almost three years (initiated by the COVID relief CARES Act on March 27, 2020). Think about that for a moment – the U.S. government needed to freeze all payments on one of the largest categories of consumer loans. Not even during the depths of the 2007-2008 financial crisis, when mortgages were blowing up every banks balance sheet, was a step this extreme deemed necessary. No one said let’s pause everyones mortgage payments for three years.

    I say this to draw attention to how severe our government believes the student debt situation to be. Cancelling some meaningful portion of student debt will eventually be necessary. But the reasons for this are not to help one political group over another, or for one politician to become more popular with certain demographics. If this were the case then it would be cheaper to simply cancel outstanding auto loans, or cancel outstanding credit card debt. And it would make more people happier.

    The reason this situation is so dire is the price that U.S. universities charge for a college education. Student borrow money to pay universities, which are the main beneficiary of the $1.7 trillion in outstanding student debt. How much students borrow has ballooned exponentially over the last 15 years. This was during a period of record low borrowing costs (see Fed ZIRP – Zero Interest Rate Policy), and a drop in college enrollment.

    The trillions in federal student loans that universities get is in addition to their exemption from all federal and state income taxes, they exemption form paying property taxes on university land, and their right to issue tax exempt bonds to fund construction, renovation, and operational costs. This does not include the $50 billion per year the U.S. government pays to universities in federal contracts and research grants. These institutions are eligible for almost every government subsidy and tax loophole imaginable.

    All of these privileges do not mean that universities pay most of their front line staff generously. According to a Berkeley study “25 percent of “part-time college faculty” and their families now receive some sort public assistance, such as Medicaid, the Children’s Health Insurance Program, food stamps, cash welfare, or the Earned Income Tax Credit”. The real picture is that only a few illustrious professors, administrators, and university contractors ( famous architects come to mind ) gorge on outsized compensation, while the rest of its staff receives only leftover crumbs.

    As Yves mentions at the beginning of this post – “Without root and branch reform of the student loan system, debt cancellation is just a gimmick.” I completely agree. And probably the best way to start this root and branch reform is to gain a comprehensive understanding of how we got here in the first place. I recommend we have someone investigate the precise nature of how universities and banks created this student loan crisis, and make suggestions for how we can prevent it from ever happening again.

    Reply
    1. notabanker

      This seems a but naive to me. The reason university costs are so exorbitant is precisely because of the debt driven dollars being pumped into it. The pre-mortgage crisis cost of homes did not spontaneously rise because of housing demand, it rose because Wall Street pumped huge amounts of free money into it, and when the ponzi scheme was over, poof, housing prices plummeted.

      The debt is the problem. They froze payments because they knew there would be a massive revolt if they bailed out lenders ala TARP in the heights of Covid, and loan write downs are verboten. Biden threw out this half cooked scheme for debt relief to the only constituency the Dems have left, the PMC and the courts are going to rightfully kill it. It is an overreach of executive authority. If he wants to reform student debt, then he can either invent a time machine and change his support of it over the last 30 years, or he can get the votes in Congress to pass legislation to do it, like they did so easily for TARP, HAMP and COVID.

      This isn’t rocket science, it is actually pretty easy. Limit the amount of debt people can take, limit the rates lenders can charge, dictate the loan term, make it dischargable like any other debt and poof, prices go down or they get no students. Let the universities deal with the price adjustments, because you know, markets. That’s what they do. Adjust to supply and demand.

      Reply
  20. JustTheFacts

    Education is broken. It should be an investment into the productive capacity of the nation. Instead it has become a way to shackle people, and it no longer educates properly. When I hear young people at Yale saying “we buy credits to get a job, and you (professors) take them away”, it’s clear that even students no longer believe they are learning anything useful. Instead they think they are jumping through societally mandated hoops. This is a real problem: China doesn’t fall for such nonsense, and would leapfrog the US easily if not for all the engineers who immigrate here.

    Secondly the cost of education should be decreasing, because our teaching methods should be improving. Computerization should imply fewer administrators, not more. And money should not be wasted supporting sports teams. As far as I can see, more state money will result in pumping more money into universities, and that will only make these problems worse.

    The solution is to fix education. And yes, that’s hard. Which is why instead people talk about the easier problem of funding.

    On a side note, I’d like to revive Ayn Rand out of her grave. I don’t see how education today, with its administrators (Dr Ferris) or its professors seeking social approval by generating tons of vapid papers to get a high h-index (Dr Stadler), would meet her approval. Lectures that teach you something you can use are worth something, and she advocated for paying for them, but as far as I can tell she wouldn’t for post-modernism disguised as philosophy, or “anti-racism” to get rid of the biology department.

    People seem to think she was evil incarnate. Yet my understanding of what she wrote is that people should not be burdened by being forced to help others, but that should be free to grow to fulfill their potential, and that this would benefit people in society the most. If the people in Galt’s Gulch were only selfish, they would not be talking about improving production to save other people’s time. Nor would there be any discussion of whether the people who took the train contributed to society — a truely selfish person would only count tickets sold, since the people attached to those tickets would not matter.

    I am left to wonder whether those who hate her so much have actually read her books. I also wonder how much the oligarchs/legal leaders who profess to follow her really do, since I read her as celebrating creativity, not ownership, which often seems to be what they celebrate.

    Reply
  21. Victor Moses

    The system has to change from the ridiculous cost of post secondary education to the inability to declare bankruptcy. The former clearly impacts the latter. If the cost wasn’t so out of control high then there would be no talk about discharging student loan debt through bankruptcy. But I am opposed to European style free tuition. Only about a third of secondary school students go on to higher education. That they should be subsidized by the guy working a minimum wage job is grossly unfair.

    Reply
  22. Late Introvert

    My neice has significant college debt and no degree – she had no business attending in the first place, but her home life was chaos at the time and college admins and banksters are all too happy to help young people ring up huge debts. As a father of a college bound 17-year old I’m all too aware of this.

    And now 10 years later she has 3 kids, a husband who is great but also is hoping to get a trucking job as a step up in life. And she still owes that debt to those family blogging banksters.

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