We’ve noted before that we can be accused of cynicism although we prefer to call it mere realism. It won’t be long now before someone starts to buy votes - sorry, alleviate the terrible economic position of arts graduates - by writing off debts to the Student Loans Company.
Millions of Americans received welcome news on Wednesday when Joe Biden delivered on a campaign promise to provide $10,000 in student debt forgiveness.
Borrowers who earn less than $125,000 a year will be eligible for loan forgiveness, with those whose low incomes qualified them for federal Pell Grants receiving up to $20,000 in relief. About a third of US undergraduate students receive Pell Grants.
Hundreds of millions of Americans also received the unwelcome news that they’ll be paying for this too. The debt doesn’t go away - the college courses have already been paid for after all. The burden of that debt is now taken off the shoulders of those who arguably should not have gone to college and put onto those of everyone else in the economy. That’s those who did pay off their college debts and also those who didn’t go to college at all.
This is true whatever circumlocutions are used. The Federal Government was going to collect that money at some point. Now it won’t - meaning that there’s either less to spend, or taxes must rise to maintain spending, or everyone suffer the inflation caused by money printing to fill the hole.
This is also concentrated on those arts graduates who failed, having gained a college degree, to get a median pay college degree type job. That is, those who arguably should not have gone to college in the first place.
As to why, well, we’re two months out from an election and what politician needs more than that? Produce, from the hat, a concentrated benefit with diffuse costs and thereby gain the votes of those who benefit - it’ll take a long time for the costs to become apparent. The specific sadness of this particular piece of politics being that who does actually believe that low earning arts graduates would ever vote anything other than D anyway?
The expense being dumped upon the populace doesn’t even work that is, buying what is already bought.
The policy is of such amazing cynicism - and stupidity - that of course someone will be recommending that it be applied to our own Student Loans Company in 3…2…1…you heard it here first folks.
The actual point of asking students to pay their own freight is to stop students doing degrees that aren’t worth it. Killing the debt, the price system, thereby kills the entire point of the policy.