Elizabeth Warren wants to “forgive” student loans — she means “Make the rest of us pay it.”
This troubles me.
“Warren’s new plan would forgive $50,000 in student loans for Americans in households earning less than $100,000 a year. According to analysis provided by her campaign, that would provide immediate relief to more than 95% of the 45 million Americans with student debt. The Massachusetts Democrat and 2020 contender is also calling for a drastic increase in federal spending on higher education that would make tuition and fees free for all students at two- and four-year public colleges and expand grants for lower-income and minority students to cover costs like housing, food, books and child care.”
The campaign estimates that the plan would cost $1.25 trillion over 10 years.
What is this “forgiveness” she speaks of? I agree that it is a sin that so many people are so saddled with debt but, only sins can be forgiven.
Debt? That has to be paid by someone.
Thus, by “forgive” — Liz Warren means “make the rest of us pay it.”
Let’s look at some hypothetical people.
1) Isabella’s parents are immigrants from El Salvador. They scraped by to make sure that they could provide for her. She wanted to be a lawyer but decided that she did not want a lot of debt, so she joined the Marine Corps. Isabella spent six years in the Marines and got military benefits that covered most of her educational expenses. The rest, she paid out of money she and her parents saved up. She has no debt, in large part because her military benefits covered most of the tuition at a state university and a state law school, and the rest because her parents saved money for her from birth, and Isabella socked away her summer job money every summer.
2) Tyrone’s parents were public defenders. They scraped by but did okay. Tyrone didn’t want to be a lawyer and instead, wanted to be a doctor. He took on a lot of debt to get his medical degree because he didn’t have a state school that he liked. But, upon graduation, Tyrone continued to live like a student. He ate ramen and had four roommates. He lived on $20k a year for five years and beat down his student debt by working hard and living like a Spartan.
3) Emma’s parents are both successful corporate lawyers, but they decided that she should go at it alone. Emma wanted to attend Smith College, despite getting a scholarship to attend UMass. She majored in intersectional literature and racked up $120,000 in loans in the process. She’s always made the minimum payment, but since she’s not paying enough, the debt has ballooned to $160,000. Her parents’ estate is worth close to $15 million but they have decided that she won’t get anything until they die.
4) Tyler went to Bennington college and majored in drinking beer. He then attended Cooley Law School. He could work, but he would rather not. That Cooley law degree just doesn’t command the $180,000 per year starting salary he thinks he is worth. He’s had offers for jobs at $60,000 a year, but he doesn’t want to work for that. He has never made a student loan payment. He’s not really worried about what that will do to his credit, because he has a trust fund worth $5 million.
Tyler and Emma win, but Isabella and Tyrone get to pay more taxes to subsidize their two idiot friends.
No thank you.
If you have a lot of student debt, you made stupid decisions to get there. I made stupid decisions too.
When I applied to law school, I was accepted into Georgetown and the University of Florida. UF offered me a full scholarship but I thought the “prestige” of a Georgetown degree was worth going into debt. By the time I realized that was really stupid, I was already pot-committed. I lived like a student after I graduated (sort of like Tyrone).
And now, you want me to pay taxes so Tyler doesn’t have to pay his debt? No thank you.
Student debt is a problem. So is a refusal to take responsibility for your actions. I’ve recently argued with a very liberal friend about this. Her position? The kids who take out these loans are 18 to 22 years old, and at that age, they can’t conceive of how this decision will impact them later in life. That same liberal thinks that the voting age should be dropped to 16! So, you’re not old enough at 20 to understand the impact of borrowing money, but you’re old enough at 16 to understand the impact of voting for someone who thinks that “forgiveness” is the way to go? Pick a lane, please.
The other argument is that this is not money that YOU have to pay. Senator Warren just wants to tax the super-rich people to pay for it. You see? Magic free money! Set aside the morality of taking money from anyone (even billionaires) to pay for other people’s mistakes. Okay, don’t set it aside. Say it loud, THAT IS IMMORAL. A significant amount of my student loan money went to paying for beer.
But, aside from that, let’s think about the money.
I think it is a great idea to raise taxes on the uber-rich. Let’s say we raise $1 trillion for that. Where could we put that money? The national debt? I realize the irony of that suggestion, but it sounds better than paying money to deadbeats for over-priced educational decisions.
Further, there is only so much of other people’s money you can tax and spend. Do we need improved infrastructure? Sure we do. I even think high speed rail is a decent idea. At least we have something to show for that. But, a massive infusion of cash to the worst deadbeats in society? No. So, if you take $1 trillion from the ultra-rich, how are you going to pay for everything else? Take more? Take more from me? It isn’t as if this is “magic money” that wouldn’t otherwise exist, and that couldn’t be spent on way more productive things than bailing out deadbeat fools.
Let’s look at the root problem and let’s think about a real solution.
The root problem is that government entered the educational funding business in the first place. College costs have exploded because nobody really shops on price. They don’t need to. Imagine if you could buy a car just by going to a dealership and getting a guaranteed loan from the government, which they couldn’t turn down. And, you didn’t need to start paying for the car at all for four years. Do you think anyone would really ask “how much is that car?” No, they’d just take it, sign, and drive. Think about the problem in four years! Prices would certainly rise, as car manufacturers recognize that nobody really thinks critically about the price.
University education is the same way. Universities now offer way beyond what they must in order to provide a quality education. I recently visited my old law school, and the campus is no longer just a classroom building. There’s an Olympic sized pool and a state-of-the-art gym. Sure, their wonderful facilities, but why the hell is this part of the educational facility? And, how did they pay for that? The same way that every college pays for an ever-expanding army of useless “administrators.” They pay for it by raising tuition, which the students borrow to pay, and the government backs.
So how do we fix it?
If there is indeed a student loan crisis, why don’t we apportion the blame where it belongs? Let’s tax university endowments. Those endowments are enormous pools of heretofore tax-free money. Tax them and use the money to subsidize paying off the banks to drop their interest rates. After all, we can’t force them to do that. They lent the money on a promise of a guaranteed return.
Going forward? No more government backing of student loans. Let the schools co-sign the loans. If the student doesn’t pay, then the school is on the hook. You’ll find schools getting rid of diversity coordinators, emotional support dog day, and non-academic facilities awfully quick – and the price will come back to earth. Of course, it will result in many schools going under. I don’t think the world will suffer if we lose these places. The immediate shake-out will be cruel, but the higher education market has been insulated from the strength-building stresses of the free market.
Now, this plan would leave a bit of a gap. Even I believe that we need comparative literature majors. But I am not sure that any private school would back a loan for a major that simply requires you to read novels for four years. Art. Philosophy. History. Majors like these are necessary, but unprofitable. But this is where the state universities come in. State colleges and universities should also see their price tags drop – and, if the state believes that we need some of these people, they can make those majors free if the voters want.
Let’s face it, this idea is deeply classist. For all the Democrats who try to claim that they care about working people, think about how this idea works. We take money from really rich people (and I am ok with that) and instead of spending it on something that could benefit everyone, we give it to people who already were privileged enough to attend college. But we don’t just give it to college graduates, we give it to only those who were irresponsible and borrowed more than they could (or would) pay back. The resources we could have put into something productive come from everyone else’s taxes – that means everyone.
So, the kid who served in the military to avoid debt, she gets screwed. The kid who started a business instead of going to college, he gets screwed. The kid who finished college and paid off his loans responsibly, he gets screwed. But the snot who majored in intersectional literature and can’t understand why the only job she can get is bussing tables (because reading Andrea Dworkin essays just didn’t translate into marketable skills) gets subsidized for that stupid decision.
There is only a finite amount of money we can steal from people at gunpoint (because that is what taxes are). I don’t mind them taking some of my money for essentials, and even some luxuries. But I am tired of hearing about the “student loan crisis” as if I should pay for it. This “crisis” was caused by universities over-pricing a product that wasn’t worth what the consumers paid for it. It was caused by stupid adults borrowing money without thinking about the consequences – and without exploring alternative avenues to finance their educations. And, it was caused by government being involved in a business it never should have gotten into. Government doesn’t need to then make the problem worse by throwing a trillion dollars at a bunch of imbeciles.
This crisis affects only the lazy, stupid, and unproductive. If their lives are negatively impacted by stupid decisions, then it is time to grow up and face the music. And, if they can’t shoulder it alone, then let those who stole the money in the first place – the over-priced colleges – pay the price with them.
I’ll be damned if I pay for this “forgiveness.”
[Featured Image via YouTube]
Marc Randazza is a First Amendment lawyer and the managing partner of the Randazza legal group.DONATE
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