“Is Student Debt Cancellation Fair”

Thoughts on a Free Market Economy…
“Is Student Debt Cancellation Fair”
By Phyllis Hunsinger
August 1, 2019

Student debt cancellation is one of the major issues being advocated by current presidential candidates. Truly it is understandable why this is being promoted in a presidential campaign.
Anytime a political candidate can concentrate the benefits of an interest group that may garner some sympathy in the public eye and have everyone else pay for these benefits, votes just seem like easy-picking for the candidates.  This is nothing new in campaigns.

But, is debt cancellation fair? There are pros and cons to each side of this issue. The problem of exploding student debt is an economic problem of geometric proportions, with no easy answers.
The potential earnings of a college educated individual on average far outweigh the potential earnings of a high school graduate. Yet any debt cancellation policy would require all taxpayers to contribute to pay off the debts of individuals with the most potential for earning higher salaries. Cancellation of student debt would become a fundamentally regressive tax.

Why would a college student exercise any restraint in spending when the student knows other people will be responsible for paying the bill? There is already a problem with students acquiring degrees in fairly useless fields with little prospect of gainful employment, for example gender studies, fashion merchandising, or art history just to name a few. When students are not held accountable for their own choices, it is a safe bet the choices will be more irresponsible.
And why should even a portion of the expenses for college debt be paid for by taxpayers who had no part in making the choices?

The costs of attending college have increased exponentially, primarily because the student loans are easier to attain. The more available the money is for students, the more money the college demands. A policy of debt cancellation will only exacerbate this problem. Colleges have no incentive to keep their costs lower, as demonstrated by the exorbitant salaries paid to top administrators seemingly with no relation to their worth.

Student debt is a serious problem in the United States.  The current loan structure makes it extremely difficult for students to retire their loans because of the interest compounding even if the loan repayment schedule has not begun.  Student debt cancellation redistributes wealth from lower earning tax payers upward to the higher levels of expected lifetime earners and removes the incentives for individuals to make good choices. The issue of student debt is not easily solved, but the staus quo seems untenable.

 

https://www.free-dom.co.us, Phyllis Hunsinger © 2013 All Rights Reserved

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