Spend enough time in Washington, and fringe ideas find acceptance as sound policy proposals. Near the top of a long list of such ideas emanating from the Far Left is forcing a Florida mechanic who attended trade school to pay for a New York lawyer’s bachelor’s degree.
For decades, elites have sold college as the universal ingredient to success in a deindustrialized America. While things are slowly changing, a bachelor’s degree is still likely to lead to an additional $1 million in lifetime earnings. But now, during a time of record-high inflation, President Biden is going to ask America’s working families to pay off the student loans of the privileged. Is that fair? The answer should be obvious, but apparently it isn’t to Democrats.
On April 28, the president announced he is “taking a hard look at whether there will be debt forgiveness” of up to $10,000 per borrower, the number he campaigned on in 2020. For a long time now, I’ve been warning that debt forgiveness is sheer insanity. The reasons why are simple. President Biden and his defenders seem to think money can be willed in and out of existence. They’re wrong, no matter what the economists say. Debts have to be paid, and if the hundreds of billions of dollars that students owe to the government are not paid by their borrowers, the burden of payment will fall on all American taxpayers.
That will happen directly, through tax hikes—or it will happen indirectly, through even more inflation. Inflation is what inevitably happens when the government gives out money “for free.” It’s why the Biden Administration’s endless COVID relief spending has caused prices to rise at the highest rate in 40 years. The two-year moratorium on student loan debt payments has surely contributed to that rise, and large-scale debt forgiveness would likely make things worse.
The desire to make things easier on debt-burdened students is understandable. However, whether through tax hikes or inflation, it’s simply unfair to make everyone else carry their load for them. Forgiving debt would take money from working Americans who have already paid off student loans—or who chose not to go to college to conserve their finances—and give it to America’s most privileged. For an administration so concerned with “equity,” that is a shockingly inequitable proposal.
Fortunately, there’s a better way to help students. Debts have to be paid, but the federal government does not just demand a balanced ledger—it has chosen to place inflated, compounding interest rates on its “generous” student loans. This is ridiculous and predatory. Washington should not be in the business of profiting off of debt-burdened young Americans.
My LOAN Act would eliminate federal student loan interest rates. It would replace them with a one-time, non-compounding financing fee to be paid out over the life of the loan. That way, prospective students would have complete price transparency. Borrowers would be placed in an income-based repayment plan by default, which would tailor monthly charges to individual students’ financial circumstances.
The LOAN Act would free students from the snowballing debt effect, which holds many young Americans back from marrying, settling down, and giving back to their communities. It would also put us on a more sustainable path moving forward—unlike President Biden’s debt forgiveness plan, which would just create an expectation for additional, future debt cancellations.
Student loan debt is a real problem. Millions of young Americans entered the college system not understanding how much it would really cost them, and millions more continue to do so. It threatens to cause significant harm to the next generation if left unfixed.
The nation can respond to this problem in two ways. We can compel working families to carry the debt burden of the college-educated. Or we can pass the LOAN Act, a common-sense bill that would set students on a path to financial sanity. I call on my colleagues in Congress to support this legislation and set the student debt crisis on a trajectory to extinction—it’s the only way to do right by all Americans.
The views expressed in this opinion piece are the author’s own and do not necessarily represent those of The Daily Wire.
Source: Dailywire
