An Idea That Is Hard To Resist

Capital Commerce finds a facebook page with a suggestion for The Next Bailout: Cancel U.S. Student Loans. It's an appealing thought.

Some of us have taken advantage of Federal Stafford Loans and other programs, including private loans, to finance higher education, presumably with the understanding that an advanced degree equates with higher earning power in the future. Many of us go into public service after attaining such degrees, something that's also repeatedly proclaimed as something society should encourage. Yet, the loans we've accrued to obtain such degrees have crippled our ability to reap the benefits of our educations, causing many to make the unfortunate choice of leaving public service so as to earn enough money to pay off that debt. ...
As I said, it's appealing. The President and his wife have each complained publicly about the burden that their student loans imposed on them. Certainly, there are a lot of people burdened by tens of thousands of dollars of educational debt, which will follow them through thick and thin. But, without pointing any fingers, I think we also know a lot of people who took out student loans to go on Spring Break.

The business about having to leave "public service" (really, they mean non-profit work. College educated gov't employees do just fine when you add up their pensions and fringe benefits) is probably true, too. But this also hints at the "puffery" that colleges and grad schools - especially private schools - engage in. Their tuitions are always outrageously high. But, they often feed the students a steady diet of lessons about how "public interest" work is the place to be because, for many lower-tier schools, public interest and non-profits are the leading employers who show up on Career Day. And those jobs are too far down the wage scale to allow a person in their twenties to immediately begin making loan payments of the size many face.

Still, I think a no-strings amnesty for student loans would be yet another middle class subsidy that we can't afford, and would involve lower income people bailing out those who are better educated and better positioned in life. Some of us (you might want to sit down) went to state schools, where we were able to get a good low-cost education if we were willing to live modestly and work at part-time jobs. Often, that was born of economic necessity.

Speaking for myself, I spent one year at a semi-prestigous "private university before finishing at San Francisco State. My total expenses - tuition, room & board, etc. - for 3 years at State still did not exceed the thousands of dollars my parents spent to send me to Private U for one year. Why in the world should I now be subsidizing the education of someone who spent 4X more than I did to get the same education? Why should someone with a high school education subsidize the education of his boss? It really makes no sense, no matter how appealing it sounds.

Loan forgiveness may be irresistable, however. If that is to be our fate, could we at least attach some strings to it? Like, say, make 'em work in the Inner City or Outer Mountains for a few years? The Facebook Friends at the linked all pinkie-swear they would be doing "public service" but for their loans. Let's put 'em to work, then.

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