Why Biden's Student Loan Forgiveness is a Terrible Idea Pt. 1
Cover photo courtesy of Gage Skidmore on Flickr
On Wednesday, August 24, President Biden announced that the federal government will be forgiving $10,000 of student loan debt to those making under $125,000 per year (or $250,000 per couple). According to The Committee for a Responsible Federal Budget, his plan will cost the American taxpayer an estimated five hundred billion dollars in the next ten years based on all of the known details, and most taxpayers won’t receive any benefit. Some estimates, including one from The Penn Wharton Budget Model estimate as high as one TRILLION dollars depending on the details of the plan. Student loan forgiveness only benefits the affluent, those who chose to go to college and chose to put themselves in student loan debt. This plan will not help those who didn’t go to college, those who already paid off their student loan debt, and those who have yet to take out student loans, it will only cost them. Overall, this will hurt the American people.
Many Americans have chosen to take out large student loans and are now swamped with large amounts of debt. This has led some to call for student loan “forgiveness” for these students. These people often ignore the fact that everyone who took out student loan debt did it by choice; they must take responsibility for their decision, instead of expecting that someone will save them so they can evade being held accountable. Students should go to college to study subjects to get a job that will make enough to pay for student loan debt. If a degree does not get a student a job, then perhaps the student shouldn’t have studied that subject. In fact, The Federal Reserve Bank of New York reports that 37.9% of college graduates work in a job that doesn’t require a college degree, for them, the degree isn’t worth the cost. The person with a degree in art history who is now working at Starbucks shouldn’t rely on the government to reimburse him, he must take responsibility for his own decision.
Student loan forgiveness disproportionately benefits the rich and hurts the poor. Higher-income people are more likely to go to college, and therefore take out more student loan debt, while many lower-income individuals instead choose to go to a trade school or get a job that doesn’t require a college education. In fact, a report from The Brookings Institute shows that the wealthiest 20% of Americans owe one-third of all student debt, while the bottom 20% hold only 8% of student debt, further proving that this will not significantly help the poor, only the rich. Since the taxpayer-funded government is now “forgiving” student debt, the cost of these student loans is being spread out over the entire American people. Now the hard-working blue-collar worker who chose not to go to college must foot the bill for the philosophy major who uses her degree to work at Taco Bell. According to the National Taxpayer Union Foundation, Biden’s student debt forgiveness will cost each taxpayer $2,000 on average. This is a slap in the face to those who didn’t go to college, worked hard to pay off their debts, or have yet to go to college, as even though none of these groups see a benefit, they will ultimately be the ones footing the bill.
Now more than ever, it is important to remember the wise words of the economist Thomas Sowell, who said that “Since this is an era when many people are concerned about 'fairness' and 'social justice,' what is your 'fair share' of what someone else has worked for?”