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Thomas Sowell; the author, economist, political commentator, and social theorist; once stated that “you cannot subsidize irresponsibility and expect people to become more responsible.”
Back when I was an undergrad student, I had a buddy who applied, and was approved, for student loans, and he partied like a rock star. Every time he ran low on funds, he would go apply for a new loan. I know not where he is these days, or his circumstances, but I feel it safe to assume that he may have never graduated, and regardless, he probably hasn’t paid off his student loan debt.
I did not benefit from his irresponsible spending habits; I am not responsible for paying his debt, and neither are you.
If someone is truly in need of post-secondary education, there are many different ways to finance that cost. Parents or family can assist. One can work a job and pay as they go. Or, they can get a job at a school (or other employer) that offers educational benefits for their employees. There are also many different “grants” that can be applied for, most notable is a “Pell Grant,” but also many non-profit organizations offer grants that are never applied for. Finally, the U.S. military has been offering educational benefits since the end of World War II.
To pay for my bachelor’s degree, I used my earned Veterans’ Educational Assistance Program (VEAP) benefits. I first had to enlist into the U.S. Army and serve for four years and have an honorable discharge. I had to pay into that system in order to get matching funds from the VA.
When I went to school, I applied for a Pell Grant to offset my educational costs, and I was paid a monthly amount by the VA as my educational benefit, but only if I was enrolled as a full-time student. I had to save those funds to pay tuition, books and other supplies in full at the beginning of each quarter, and I applied any unused funds toward gasoline to commute to school or for groceries.
I worked various jobs to cover my other living expenses. I graduated with zero debt. It can be done. The difference between myself and all those whining about their student debt was that I earned my tuition in advance, and those who took out loans took the money up front and promised to pay the loan back later.
So here we are, two decades into the twenty-first century, and about 60.4 million Americans carry student loan debt that totals more than $1.75 trillion, with an average of $28,950 owed per borrower.
The problem with Biden’s plan, besides the fact that it is unconstitutional, is that it is a giant Band-Aid that does nothing to fix the cause of the problem!
The problem was caused by the government when it guaranteed student loans. In fact, 92% of all student debt is through federal student loans. The colleges and investors backing the loans were guaranteed payment by the government. Once colleges received that guarantee, they went on spending sprees to improve their facilities to entice more students to enroll and spend more money at their school.
These expenses increased the costs of the schools that they passed on to their students as increased tuition. Since 1980, while regular inflation has increased costs by a factor of 259%, in that same period college tuition and fees in the U.S. have increased by 1,200%.
It is what I call “the law of unintended consequences.” Some politician somewhere wanted to make it easier for people to go to college. By insuring student loans the government made it so that nearly anyone could get a loan for a college education.
However, the government failed to put in any safeguards to restrict that the funds went strictly toward tuition, books and supplies. And then some students (by no means all of them) irresponsibly spent the loaned cash on alcohol, smart phones, car payments, spring break, etc., and when the funds ran low, they would apply for yet another loan. The economy took a downturn in 2008, and after a whole lot of people declared bankruptcy, bailing out on their student loans, Sen. Joe Biden himself, in order to ensure that the government didn’t get stuck paying off all of those unpaid loans, made it so that future student loans could not be added to a bankruptcy. Yet granting loans did not slow, and neither did irresponsible spending of these loans.
Nowhere in the Constitution is the president authorized to appropriate public funds for any debt. Both Article I, section 7, clause 1; and Article I, section 9, clause 7 of our U.S. Constitution spell out that it is the domain of Congress to control the purse strings of our treasury, while the 10th Amendment to our Constitution clearly states that if the federal government is not given a listed power in the Constitution, then that authority belongs to the states or the people.
Comparatively, not even the queen of England has the authority to take public funds to write off the personal debt of a single person, let alone millions of her British subjects.
By most accounts, President Biden is showing signs of possible dementia. And it is obvious that Biden is being guided by others and told what to say or do.
My guess is that one of his advisors told him to announce this student loan forgiveness, hoping to reverse his low polling numbers. But either no one bothered to check the constitutionality of his order, or they did and said “F” the Constitution, hoping that the executive order will sway votes this November.
Passing the debt to the taxpayer is NOT the solution to this problem. The way to fix the problem is for our federal government to get smaller and stop interfering with the free market. It was government interference that created this problem.
Government needs to revoke their guarantee, and they need to revoke the bankruptcy exception. If they do, the schools will go back to admitting only highly qualified students, and lenders will go back to only lending funds to persons with a decent credit score that are likely to repay their debts.
In the end, if Biden’s student loan forgiveness plan actually stands, Biden will pass on the debt from those who promised to pay the loan back later onto those who either didn’t go to school or earned their tuition through service, or those who were responsible and already paid their student debt, and no matter how you add that up, that just ain’t right.