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Why the government getting rid of all student debt will not save higher education
It does not come as a surprise to anyone that the cost of college is rising. For the 1987-1988 school year students paid roughly $3,190 for a four-year public school and $15,160 for a four-year private school. Those numbers are now $9,970 and $34,740 respectively, as of the 2017-2018 school year.
On average, over the last 20 years tuition has increased 144% at private schools, 165% for public out-of-state tuition and 212% for in-state public tuition. These numbers are completely outpacing inflation, which has been measured by the consumer price index inflation at 50%.
With inflation not matching these prices and college becoming increasingly unaffordable, a natural conversation has begun on the political stage: cancel all student loan debt.
One of the first members of Congress to propose this idea was Senator Elizabeth Warren (D-MA). The previous democratic presidential candidate pushed the projected president-elect Joe Biden on the issue recently stating that, “All on his own, President-elect Biden will have the ability to administratively cancel billions of dollars in student loan debt using the authority that Congress has already given to the secretary of Education.”
Many democrats, including Representative Ayanna Presley (D-MA), Senator Kiersten Gillebrand (D-NY), Senator Tim Kaine (D-VA) and the former Vice President Joe Biden himself, have supported or proposed measures that would cancel some or all student loan debt.
Currently, projected President-Elect Joe Biden and Senate Minority leader Chuck Schumer are going back and forth regarding whose purview the job of canceling debt falls under. While Vice President Biden has called on Congress to act on student loan forgiveness, the Senator has responded with desires for an executive order.
“Getting rid of student debt. I have a proposal with [Massachusetts Sen.] Elizabeth Warren that the first $50,000 of debt be vanquished, and we believe that Joe Biden can do that with the pen as opposed to legislation,” the Senator said after releasing his plan that would clear student loan debt for up to 95% of those with debt. He mentioned that this could be accomplished by the Secretary of Education under the Higher Education Act of 1965.
The Vice President has expressed support for smaller relief to the tune of $10,000 in student loan forgiveness that would come as part of a larger coronavirus relief bill.
Regardless of what a new administration or congress would tackle with regards to student debt, it is a problem that many Americans struggle with. Outstanding student loans currently stand at over $1.7 trillion, with one in every six Americans owing money.
While it sounds like a no-brainer that we should forgive individuals for their loans — as college is unaffordable but also a necessity to a well-off lifestyle — the problem is significantly larger than just erasing debt.
College is not for everyone, and we need to stop acting like it is.
Basic economics tells us that when supply is low and demand is high prices increase. Similarly, when supply is high, but demand is low, prices decrease. For example, if there are five cokes on a shelf at $3 a piece and 10 people who want a coke, then the price will increase until supply equals demand and the market has reached a sort of equilibrium.
This is where we run into a higher education problem. The government’s intervention into the higher education system created an artificial demand for education, presenting the façade that everyone can afford college. Universities aren’t concerned with where the money is from, just that they get it. Therefore, as the government continues to make it look like more individuals can afford college, but the supply stays relatively the same, colleges are told they can increase the price.
Why? Because if the government will continue to back anyone who wants the money, the university can’t lose. So in fact, why not?
Society has also placed undue, and unnecessary, influence and importance on attending college. There are a plethora of trade schools in the world that would be more beneficial to an individual than a business or communications degree. Time in a short term certification program or pursuing an apprenticeship might be the more appropriate path for some individuals, and yet our society funnels every high school graduate into the higher education system.
Finally, what is fair about forcing individuals who went through the system correctly to now pay for the next generation’s student loans because they could not pay off their own debts? Individual accountability is the only way to actually make these decisions matter, instead of sending everyone to college.
If everyone attends college, it becomes another high school diploma and loses its significance. As a society, it is incumbent upon us to realize that a college education is not a fair measure of the success, talent, ability or qualifications of an individual.
More government is almost never the answer to society’s ailments, and in this case, has caused the cost of education to inflate dramatically. Maybe if universities had to metaphorically eat up whatever costs their students could not pay, instead of making the federal government do it, they would understand what the true costs are.
We cannot punish the tax-payer for the decision of an 18 year old to take on immense amounts of debt. Instead, we must guide our youth towards making a decision that is best for their future, with all possibilities laid out before them. Because at the end of the day, college is not for everyone.