A rationale for student debt relief

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One of the essential principles of free enterprise depends on an understanding so conventional that it largely goes unspoken: When people borrow money, they must pay it back — usually with interest.

We've established guardrails to protect naive borrowers from usurious lenders, and defaulting on a loan has legal consequences. But our system reflects the good-faith principle that borrowed money must be repaid.

Then how do we justify debt relief for students who borrowed money to go to college?

President Joe Biden's proposed program for student debt relief is a modest attempt to alleviate the financial pressure on students who left college — with or without a degree — under a staggering debt burden that currently amounts to $1.7 trillion for 44 million Americans. Figures vary, but the average student debt is pushing $30,000, and some students' financial liability reaches six figures.

Biden's proposal would help young Americans just beginning their careers by forgiving up to $20,000 of debt. At present the proposal is stalled in the courts, and it is receiving considerable resistance from its opponents.

Consider this rationale for some debt relief for student borrowers:

A car or a house is a private good, owned and enjoyed by a single party. Once it's paid for, its ownership and use are unavailable to others except at the owner's discretion.

Public goods are the opposite of private goods. The term describes the facilities and services that are generally paid for by tax dollars and are available to and benefit everyone, for example, fire departments, police departments and public schools.

A college education is a hybrid between a public good and a private good. America has produced many excellent public colleges and universities and made them available to all students, originally at a reasonable cost. Generally we've expected students to pay part of the cost, but the public pays the rest because we've agreed that an educated society is healthier and stronger.

The essential problem is that public support for colleges and universities has eroded dramatically in the last several decades, and the costs of college have been pushed more and more onto students. What was once an affordable education is increasingly out of reach for many students, unless they take out loans.

But it's also easy to see why all modern students might begrudge the opportunities that American college students enjoyed several decades ago. Such was America's belief in education and in itself that a student with modest means — me, for example — could finish graduate school with zero debt. None. College was simply more affordable in those days.

Here's a supporting rationale: The issue of student debt relief is skewed by a common mischaracterization of college as a four-year toga party, with a little studying interspersed with excessive drinking and revelry.

All stereotypes bear a grain of truth. But the cynic's vision of the dissipated college student describes very few of the thousands of students I encountered during three decades of college teaching, mostly in a community college.

As a rule, my students were older, serious and committed, and nearly all of them were working toward degrees — nursing, teaching, physical therapy, public safety and so on — that would benefit society as well as themselves.

And nearly all of them held jobs — part time or full time — in order to meet college costs. There was nothing unusual about a student stumbling into my freshman writing class the morning after clerking all night in a convenience store.

Is large-scale student debt relief justified? I'm not sure. But there is a solid rationale for modest relief for students who have worked very hard, for themselves and for the rest of us as well.