Another day, another great wealth transfer.
President Joe Biden has delivered on his campaign promise of student loan debt relief with a $300 billion plan that will take money from blue-collar workers and turn it over to white-collar workers.
When Democrats look back on why they keep losing the votes of many lower-income communities, they might reflect on the fact that the government just agreed to hand $10,000 in taxpayer-funded debt relief to individuals who earn up to $125,000 a year.
The economics of this decision only fuel an inflationary fire, as former Obama administration official Jason Furman noted. And Biden’s legal justification, based on a Sept. 11 emergency order, amounts to an abuse of presidential authority.
Meanwhile, there is little discussion of some of the root causes of the what’s called the student loan debt crisis. The price of the four-year college degree has spiraled upward at speeds that make our current inflation surge look like a slow roll.
Any number of colleges and universities — flush with endowments, taxpayer funds or both — continue to raise tuition costs as they layer on administrators and construct fabulous campuses that would make a sultan blush.
Even more modest universities are forced, through bottomless federal requirements, to increase administrative costs that are passed along to students.
Many of these same universities offer an ever-expanding array of majors with dubious economic or academic benefit. Students graduate with degrees in hyper-specialized subjects that don’t evenly apply to the waiting job market. Meanwhile, universities require ever less grounding in common and broadly applicable subjects that once made up the core of a university education.
Sometime after the second World War, the culture decided that a college degree was the ticket to a stable, productive life of upward mobility.
For a while, that was a decent bargain. But the ticket’s value has been distorted in any number of ways. There are plenty of jobs that shouldn’t require a degree. And there are plenty of degrees that aren’t worth the paper they’re written on, despite the debt burden they’ve put on their recipients.
The student loan crisis is really a crisis of education. Students are paying a lot for a little. The Biden administration is now going to foist some of that cost onto the backs of the taxpayers.
The message to young people is that they weren’t really responsible for the loans they took. The system was unfair. And there is some truth to that, at least insofar as the value of their degrees doesn’t match the cost.
But why are we treating the symptom, instead of trying to cure the disease?
