In my last post, I criticized student debt forgiveness proposals from Democrats seeking their party’s nomination for president. Even if you argue that government should subsidize the cost of college, repaying debt incurred by students in the past is a totally different issue. There are obvious problems with debt forgiveness schemes, but I will list a few:
- Should students who incurred more debt by attending a more expensive college or university receive more government funds? If so, wouldn’t this be unfair to those who chose less expensive colleges because they never anticipated a bailout?
- Should parents be repaid if they paid the tuition for their children? If so, how would you determine how much parents actually paid or should have been able to afford retroactively?
- Should the debts of students who did not graduate be repaid? If not, should they be repaid if they decide to return to college and complete a degree?
- Should Washington limit tuition in the same way that it caps medical reimbursements through Medicaid and Medicare? If so, which bureaucracy is equipped to do this?
Hopefully you are convinced by now that any debt forgiveness plan would be arbitrary and unworkable. If not, I will address the two primary arguments for college debt forgiveness:
First, we are told that college tuition is too expensive, but why is it so costly in the first place? There are a lot of contributing factors, but a major driver is government subsidies. Politicians constantly attempt to appease voters who think that anything is too expensive by proposing to use taxpayer funds to pay for part or all the cost. Many voters are fooled into thinking that subsidies make ____ more affordable. You can fill in the blank with healthcare, housing costs, higher education, or anything else with a substantial political constituency. However, subsidies increase prices because they remove the incentive for organizations to innovate and reduce costs. Why struggle to find new ways to deliver education at a lower cost if the federal government is going to reimburse your college anyway?
Second, we are told that college must be accessible because education is the ultimate equalizer by helping poor kids get good jobs. I certainly endorse the value of a college education, but not everyone has to earn a degree to be successful. Besides, if you are really interested in accessibility, refer to the first argument, as government subsidies exacerbate the problem. Like healthcare and housing, higher education already receives lots of government “assistance,” but is still not “affordable.”
It’s ironic that the same politicians pushing to impeach President Trump to “curb corruption” are engaged in blatant vote-buying schemes like college debt forgiveness.