In the history of unwarranted and unseemly government spending proposals, having taxpayers cover student college loan debt is surely near the top of the charts. It should be obvious, but apparently isn't, that the college education students receive is theirs and theirs alone, that college graduates should be responsible for paying off their loans, and that having taxpayers cover college loan debt rewards poor choices.
A student who attended a college that left them $40,000 in debt? A victim of out-of-control college costs who deserves help. One who will have their quality of life diminished if they have to spend 10 years paying off an $80,000 loan? A naive young person worthy of taxpayers' financial support. A student who will have to make substantial sacrifices to climb out from $100,000 in debt? A casualty of social and financial forces beyond their control.
Rubbish. As the old saying goes: You break it, you own it.
There are college students deserving of taxpayer support, such as those from impoverished backgrounds and military veterans, but proposals for having the government pick up college loan debt largely targets students from middle and higher income homes. How did we get here? Ostensibly because current college loan debt is estimated to be $1.6 trillion, or about $38,000 per student, with about 11% of students defaulting on their college loans. This "crisis" has generated a proposal by Democratic presidential candidate Elizabeth Warren to forgive up to $50,000 in debt (i.e., have taxpayers cover the cost) for a family with an annual income less than $100,000, with less forgiveness for incomes between $100,000 to $250,000, and another this week by presidential candidate Bernie Sanders and U.S. Rep. Ilhan Omar of Minnesota to wipe out the debt entirely. Full disclosure: I'm a tax-and-spend Democrat and a college professor who generally supports government programs focused on helping, but this proposal leaves me, as the British say, gobsmacked.
One regular comment in this debate is that students and families don't always realize how much debt there will be. As best as I can tell, here's how it works: A few online clicks on a college website gets you to estimated yearly costs. If the estimated cost is $25,000 per year but after scholarships, family contributions and summer income will be $10,000 per year the total cost is $40,000 after four years of full-time study. If the estimated cost is $35,000 per year but $20,000 after scholarships, family contributions and summer income, the total cost will be $80,000 after four years, and if the cost is $60,000 per year but $40,000 after scholarships, family contributions and summer income, the total cost will be $160,000.
If my arithmetic is correct, and assuming the same information appears on college websites, how is it students and families don't have a good sense of how much debt they are incurring? Setting aside the obvious analogies of buying a car or house without knowing the cost, my guess is that many students knew the cost but still chose to attend a college that left them with substantial debt.
Is there a simple way for students to avoid incurring large college loan debt and still be able to attend a good school? Well, yes, and it's shockingly similar to the strategy most people follow when buying something that costs a lot of money, like a car or house.
What students and families need to realize (and many do), and Elizabeth Warren surely knows as a former professor, is that there is a large pool of colleges to choose among that vary in academic quality, institutional values, reputation, size, location and cost, providing students with choices (just like buying a car or a house), unless they have decided they must attend a school that will leave them with substantial debt (but that is a different rant). There are more than 70 four-year public and private schools in Minnesota, more than 3,000 in the U.S., and information about all of them including cost is available online.
