About 44 million Americans owe a collective $1.5 trillion in college debt. If elected, Elizabeth Warren and Bernie Sanders propose to end it. Other Democrats have made similar claims.
To be fair, I sympathize with students who overextended themselves with debt, expected a job they didn’t get, and are now obligated to pay it back. Many of them bought into the lie of easy money or were told they “had to go to college.” I’m a firm believer in higher education, but not everyone has to or should go to college. I’ll address this in detail at another time.
While the proposals from Sanders, Warren and other Democrats have a lot of emotional appeal, they are economically irrational. For starters, the decision to advance your education should be evaluated like all others—on a cost-benefit basis. You should accept the cost only if you are motivated to leverage the college experience enough to make it worthwhile. It’s just not right to ask someone else who chose a different path to cover the debt you incurred. Should your neighbor help pay for your car as well if you bought one you couldn’t afford? Knowing that we will be held financially accountable helps us think twice before we spend money we might not be able to repay.
But there’s also an interesting twist to the notion of college debt forgiveness. Tuition is the highest at elite, private schools, so any proposal to cancel college debt not only creates an unnecessary subsidy, but also gives the greatest benefits those who chose the most expensive colleges. It’s also not a coincidence that most professors—particularly those at elite schools—are on the political left.
I’m sorry to see so many Americans saddled with college debt. I’ll disappointed to see so many young Americans juggling a lot of credit card debe as well. Nonetheless, all of us should be responsible for our own decisions and obligations. Pandering to current and recent college students with a massive debt forgiveness plan will produce some votes. Hopefully, the rest of us will see the folly and reject candidates who make such proposals.