It’s the season of giving — or, for some lawmakers, the time to ask the government to compel taxpayers to give a big gift to others.
A few weeks ago, Representative Alexandria Ocasio-Cortez took to the boardroom to issue another plea for the federal government to cancel nearly $1.7 trillion in student loan debt.
That is, it requires taxpayers who did not go to college, or who did not take large loans to go to college, to repay the often huge loans to those who did.
The AOC argues that the student loan scheme is ridiculous because at age 32 she still owes $17,000.
But then she unwittingly puts her finger on the crux of the student debt problem:
“They are teenagers involved in what is often hundreds of thousands of dollars in debt…” she says. “We give 17-year-olds the ability to sign in and sign up for $100,000 in debt and believe this is a responsible policy.”
Of course it is not a responsible policy.
Of course, borrowing 100,000 people before they are old enough to vote is not a sound decision.
Of course it is a problem that has long been created and enabled by lax federal student borrowing policies.
A 2015 study by the National Bureau of Economic Research found that the increase in student loan availability correlates with nearly all increases in college tuition fees since 1987.
It’s not complicated:
The more you let young people borrow, the more college costs—because colleges knew borrowers would borrow more.
To compete for students – and to “justify” ever-increasing tuition fees – colleges have been spending massively over the past 20 years, borrowing billions to build five-star bedrooms and other lavish amenities.
The huge increase in the number of non-academic administrators — people who don’t teach or do research, but get paid big nonetheless — has increased the cost of running a college, according to the Huffington Post.
How do you fund all these increased costs? Raising tuition fees.
A report by myelearningworld.com found that in the past 50 years, college education costs have risen five times the rate of inflation.
If tuition kept pace with inflation, today’s students at both private and public universities would be paying $10,000 or $20,000 annually — half of what they are today.
The entire education financing scheme has been a sweet racket for the industrial higher education complex for a long time.
But more and more young people (and their parents) are seeing it through.
Instead of borrowing tens of thousands of dollars for a college degree, more high school graduates are choosing well-paying, debt-free career opportunities.
With a record number of open jobs and a dearth of willing job candidates, more companies are hiring young people without college degrees.
This diminishing demand has forced colleges to suddenly begin lowering their “sticky prices,” according to Forbes.
So, if more young people become more rational about taking on huge debt, would it be an exaggeration to ask lawmakers to come to their senses, too?
Well-meaning but misguided student-lending policies have helped create a massive $1.7 trillion debt bubble.
Demanding the rest of us pay off college debts that millions of others have willingly taken on is not only absurd, it’s downright unfair. Case in point: The Alexandria Ocasio-Cortez Company makes $174,000 a year. Instead of forcing the taxpayer to pay off her $17,000 college loan, she might have to trade in her Tesla for a used Hyundai.
Tom Purcell is an author and humorous columnist for the Pittsburgh Tribune-Review. Email him at Tom@TomPurcell.com.