A Couple of Thoughts on Student Loan Debt

 

I’ve taken out mortgage loans, auto loans, acquired some credit card debt . . . am I forgetting anything? But I’ve never acquired debt and not paid it back. It never occurred to me to do that.

 

Transferring student loan debt seems like subsidizing irresponsibility. What happens when you subsidize something? You get more of it.

 

I saw the Secretary of Education being interviewed and although I don’t remember his exact words, he seemed to blame the whole thing on the COVID pandemic. He said it was his job (or the government’s job) to make sure that people can bounce back from that and not be crushed by their student loan payments.

I’d like to ask him where he got the idea that it’s the job of the federal government to make sure that citizens don’t suffer financial hardships. In the early days of our country, many people immigrated in search of a better life, but if they didn’t find it, they had to go back home because there was no government assistance forthcoming.

The 10th Amendment says this:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Meaning that if the Constitution doesn’t say the federal government has the power to do something, then it doesn’t have the power to do that thing.

Is there a subsequent amendment granting the power to transfer student loan debt? I don’t think there is but I’m open to correction.

And why just forgive student loans? The pandemic, with people losing their jobs and businesses, created financial hardships in a lot of categories: housing payments, credit card debt, car payments, medical bills, and I’m sure there any many others. Why are we making a special case of student loans?

 

Consider two types of loan forgiveness recipients: relatively well-off, and not so well-off.

In the well-off category, I believe the annual income limit for loan forgiveness is $125,000. Per person. So for a two-income household, the limit is $250,000. If you’re knocking down $250,000, you’re at least in the top 5 percent of income earners so why should people in the lower 95 percent pay off your student loans?

In the not so well-off category, I understand that there are people who accumulated a lot of debt to get a relatively worthless degree. That was a bad decision. But if your stupid degree isn’t worth you paying for it, it certainly isn’t worth me or anyone else paying for it.

 

I’m old now, from another generation, but it used to be normal for parents to set aside money to pay for their children to go to college.

Education was emphasized in our home when our son was growing up. He worked hard in school. His junior year in high school, I don’t even know when he slept. He consumed a massive amount of energy drinks and I think just stayed awake for nine months.

He wound up earning his way into his dream college and what was I supposed to say? “My gosh, son, I’m so proud of you that I’m going to reward you by letting you saddle yourself for the rest of your life with a crippling amount of student loan debt”?

It’s immoral, in my opinion, but it does seem like a lot of parents are willing to do this now. I don’t see as a parent how you could feel good about yourself.

 

Our kid graduated debt-free. Zero. We paid for it.

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