One thing I just don’t get (okay, okay, there are so many things I just don’t get) is how it can be that paying off student loan debt is progressive.
Consider that, on average, a person with a four year college degree will earn twice as much over a career as a person without one. Consider further that two-thirds of Americans don’t have a degree. Consider still further that most people who did go to college and did take out loans dutifully paid them back.
If you were the average person just out of college in 2019 you earned $44,000. If you had just a high school diploma you earned $30,000. So, what’s progressive about a massive transfer of wealth from people earning $30,000 to people earning $44,000?
And, of course, if you pay off everybody’s loans tomorrow, well, what about the new grads next year and the years after that? Will we pay off their loans as well? And, if so, why would any college freshman not take out all the loans he can, knowing that he’ll never have to pay them back?
I bring this up again (I’ve been harping on this for years) now because Pres. Joe Biden just extended the student loan repayment moratorium into May. The moratorium may have made some sense when it was started by Donald Trump (yes, progressives, this is a Trump idea!) at the outbreak of the epidemic. But now the unemployment rate among those with college degrees is 2.1%. And just yesterday the government announced a third quarter economic growth rate that was reassuringly robust at a 2.3% annual clip.
So not only is this needless, it’s really not doing the people who owe the money any favors because it just means it will take them longer to pay back the loans.
Then there’s the price tag for taxpayers. The government, of course, will continue to pay the interest on the loans and the cost from the start of the moratorium under Trump to May will be $110 billion. That’s just about what it would cost to extend the Child Tax Credit, which reduces child poverty by almost half, for another year.
Now, look, there are some things that can be done that make sense. There is a loan forgiveness program in exchange for public service. And I’m all for a big expansion in the means tested Pell Grants to help keep future graduates’ debt burdens in check.
But look kids, you went to college so you’re supposed to be educated, if not smart. Before you took out that loan you should have known what the payback schedule would look like, you should have had a fair idea of what your major would mean in terms of income, and you signed a contract to pay the money back. Is your word worth nothing?
I know. It’s the day before Christmas Eve and here I am sounding like Scrooge. But, ya know, Scrooge did make some valid points.
Welcome to the 308th day of consecutive posts here at YSDA. Thanks for reading!