Opinion: Forgiving student debt is not the way to ensure economic freedom

By Anthony B. Kim and Bradley Devlin | The Daily Signal

In today’s dynamic society, we have a general consensus that investments in time and effort, such as excelling in the classroom and earning degrees, help to achieve intended goals.

But when it comes to financial investments in our futures, especially in the case of student loans, consensus surrounding sacrifices and consequences associated with the pursuit of freedom seems to be waning.

As the latest and most public example, consider Sen. Bernie Sanders’ stance on the subject. He would have us believe every student is forcefully saddled with thousands of dollars in debt without a say in the matter.

Sanders, I-Vt., tweeted:

He interprets financial duties, such as the repayment of student loans and credit card debt, as inherently malevolent because they restrict economic autonomy.

Sanders’ recently unveiled plan tries to cure the nation’s $1.6 trillion in student debt through more big government, which is what got us here in the first place.

There’s no surprise here. Sanders called for similar debt relief during his 2016 campaign and has treated government intervention as a panacea for four decades.

Sanders is right that costs of higher education have risen substantially in recent decades and that it is a problem for Washington because 90% of all student loans are now controlled by the federal government. But government largely has made that problem worse.

For every dollar of increase in federally subsidized student loans, tuition has increased by 63 cents.

Simply put, Sanders’ proposal won’t decrease the societal costs of education. More likely, it’ll increase them.

Sanders’ policy aims to help young adults affected by increases in education, health care, and living costs, but it runs a real risk of rewarding reckless financial behavior when Americans are more financially illiterate than they’ve been in recent history.

Recent surveys and studies have found only 57% of U.S. adults are financially literate and that 76% of millennials lack basic financial knowledge, which is why they’ve racked up $1 trillion in student debt. This financial illiteracy manifests as confusion, panic, and pessimism.

Today, 70% of millennials are stressed and anxious about saving for retirement, and 22% feel overwhelmed about their finances. These statistics highlight larger lapses in our institutions, but it’s wrong to put all the blame on the financial entities that provide the loans.

Students are free to choose whether they take out loans, solicit other loans, or completely forego them. Students and their financial institutions mutually agree to take on their respective financial responsibilities.

For their own benefit, we should not be giving students a hall pass on their debt. If we do, students’ financial unawareness will continue to increase.

The disproportionately poor and minority students who eschew loans and instead work their way through college will be doubly disadvantaged. Not to mention those who already paid back their debts.

Sanders is quick to take a swipe at Wall Street banks, but making students carefree by forgiving debt doesn’t mean ensuring their economic freedom. It simply means that someone else may be taking responsibility for their decisions.

Image courtesy of Nick Solari/Wikimedia Commons

7 thoughts on “Opinion: Forgiving student debt is not the way to ensure economic freedom

  1. Here is SOCIALIST Bernie Sanders, getting close to 80 years old, with three houses, and a $70,000 Audie (supporting the GERMAN worker), and

    – Flying FOR FREE on private planes spewing CO2, for spouting his SOCIALIST rhetoric nationwide on some else’s dime (his foundation is buying carbon offsets, a cost of “doing business”, as a PR gesture), and

    – Not liking a proper barrier to protect the US southern border (enticing future Democrat voters to enter!), and

    – Having his own tax-exempt foundation (don’t pay me, as I would have to pay federal and state income taxes, pay my foundation!), and

    – Promising more and more goodies to his favored supporters, including forgiveness of student debt (setting a poor example for their future behavior) to raise his poll numbers, and

    – Campaigning for even more US-style Socialism to benefit his foundation, a la Clintons and a la Gore, all smooth-operating, self-serving hucksters!!

  2. Great way to teach young folks self respect and responsibility. Expecting free lunches in life is going to lead to disaster in later years.

  3. Seems like the government use to offer almost zero percent interest loans
    that ended up being abused by people even paying them back. The left
    wouldn’t go along with the rights proposal to make them pay and hence the
    loan program disappeared. Now our own commie would continue the
    “No personal commitment” by forgiving debt that’s going to continue down the
    road with no commitment of collages to make them more affordable.
    burnees wife did decimate a affordable collage.

  4. They CHOOSE to have thousands in debt, and are now whining because because no one is interested in hiring someone with a BA in gender studies and other nonsense. Place the fault where it belongs; on the characters who made the choice.

  5. So you worked and saved your entire life, now Vermont’s Barking Buffoon feels that you
    and the rest of the working public should pick up the tab and pay off the debt of students
    that have useless degrees and wonder why the can’t get a real job.

    Bernie will promise anything to get a vote and his minions believe this BS, Sanders has been
    in politics for forty years has any of his foolishness ever come to fruition,,,,,,,,, Nope !!

    Bernie, I’ve seen your dreams in Venezuela, Cuba, Russia…….No Thanks !!

  6. Please follow this closely.
    For at least the last 60 years we have told our children in this country that a college education was a MUST to raise your economic advantage. In fact, studies were bandied about that a college education would gain an individual more than twice to three times the cumulative salary achieved over those without a college degree – and it seemed to be true for a while.
    However, over time colleges found that because their prospective students could get easy money for their education, they could increase their costs way, way beyond annual cost of living dollars.
    Students, on the other hand, were lulled into loans that were egregious at best and usury at worst, by believe it… our own government.
    And what did this do?………..
    It created over 20 to 30 years, a huge debt load which banks LOVE because they see it, at the rate of interest allowed by the government as really, really, really good business for them!
    So, when I got out of the service in 1969 and went to college, I could borrow enough to complete my education with a reasonable expectation that I could get a job and be debt free in a few years.
    Now, for a large # of college graduates it is 15 to 20 years before they are able to pay off their college loans.
    Now I am going to get profane.
    This is bull—! Our government has used the millions of kids desiring a college education to prop up the banking industry. And if you do not think so….research it!

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