Proposals to eliminate about $1.5 trillion in student loan debt will undoubtedly grab favorable attention among a large number of prospective voters, given that more than 40 million Americans are currently paying back loans for education. While politically appealing, the concept of such massive and immediate debt elimination fails to address the main problem with education: the cost.
First, it would require a sizeable revenue stream, likely fed by higher taxes, or, as in some proposals, new taxes on high-level investment transactions. Aside from the question of how to equitably apply such levies, it’s fair to ask whether it’s sound policy at this point to raise huge amounts of new money for purposes other than relieving a federal debt that is projected to reach 144 percent of the nation’s GDP in the next two decades.
More significantly, it would ease the burdens of a few without making college education more affordable going forward. Dramatically rising costs for a bachelor’s degree are what got the country in the debt problem to begin with. While it’s important to address the social and economic problems brought by high levels of student debt, it’s smarter policy to work toward making sure future generations are not so burdened.
Indeed, issues surrounding wealth inequality tend to rouse younger voters, and student debt is a real-life impediment for many people striving for economic stability. Proponents of immediate debt elimination argue that those freed up from the burden will spend more on housing and in other sectors, which will encourage economic growth. Some thorough vetting of that “trickle-up” notion would be helpful in a true cost-benefit assessment of the various proposals.
As for addressing the issue of wealth disparity, making higher education more accessible to more people would be measurably more effective than taking away a debt burden from those who’ve already passed through college. Additionally, there is a fairness issue to be addressed as it pertains to transferring the burden of debt to those high-income earners who made it through college — debt-free or not. They, too, represent a class of prospective voters, and one that’s not likely to be galvanized by debt elimination promises.
Even so, there is widespread agreement the student debt problem is one of society-wide significance. As Wall Street’s Jamie Dimon, chairman and CEO of JPMorgan Chase, said recently, “What we’ve done is a disgrace, and it’s hurting America.” Dimon wisely points out the solution will come by looking at “all parts of student lending,” and then fixing what’s broken.
Indeed, what’s needed is a healthy discussion on how best to address the problem in a fact-based and dispassionate way, not in the way of a carrot dangled in front of prospective voters. Those suffering under burdensome debt deserve attention and appropriate assistance. Promising to simply remove that burden may be a way for a candidate to attract votes, but it detracts from a more sober and strategic approach to a problem with many complicated causes and effects.