Bail Out Students
One of the hot topics with our federal leadership is student loan forgiveness. This is a fun concept that probably won't ever happen. Why? Not because it's impossible, but rather, both sides of the aisle prefer that it doesn't. This way they have something to argue and compromise about.
The left can compromise by not doing forgiveness outright, but rather deferring it for another few months. Then they can go back to their base and explain “we can't do it yet! elect us again and we'll fight for you!”.
The right can compromise by yielding to a deferment rather than forgiveness. They can go back to their base and explain “we stopped those liberals from giving away money! elect us again to stop it again!”
The right gets to shout how fiscally responsible they are, they left gets to shout how reasonable they are. Both get what they want and the people get to worry about loans coming due.
Neither side actually cares. They don't have student loans. They don't have to actually work for a living to put food on the table or a roof over their heads.
But should we cancel the current student loan debt? Would it make any sense?
I think so.
Rather than creating a system to bail out businesses or provide other means of stimulus — all prone to fraud and abuse — let's just use a system that can have minimal fraud because it already uses information we have... the student loan information!
You can't go back in time and get a student loan. You need to already have one. And if it suddenly was voided... you've put money into the hands of all the educated people in the country. Will some go spend their money on nonsense? Absolutely. And that's totally okay — it's the economy working.
But plenty will now have the financial freedom to take some more risks, maybe start a business, maybe just invest a bit more. In the end, it would take the decision of who gets money and manages money in bailouts or stimulus out of the hands of the federal government and put it into the hands of educated people.
At the same time, we should make student loans dis-chargeable in bankruptcy. If your education didn't give you the tools you need to make money... you should be able to start over! Just like any other debt. That's not to say it's a free-for-all, there are consequences to this, but why should you be saddled with this debt for the rest of your life.
The student loan market currently provides schools with an unlimited source of funding. If a school needs more money... raise tuition or admit more students. The government will loan that money to the students, of course it will! And it's not like that government giving those loans has any say into the quality of education or what the tuition is spent on.
They already spend it on building stadiums for sports leagues so they can earn money from the lucrative college sports industry. Who do you think pays for all that stuff?
Much of the things that higher education has can only exist because there is a limitless supply of cheap capital built on the backs of students future wage garnishments.
We also already have a parallel student loan system — the GI bill. Basically, if you join the military and serve, the military will pay for your college education. That sounds like a fair shake to me. Society gets immediate benefit, people can get an education, and there aren't much in the way of loans to hold them back.
Will education suffer? I doubt it. Our university system isn't the greatest in the world. There are better. And I imagine forcing universities to actually provide value for their funding would be a great start to coercing them to improve.
I'm pretty sure that's what folks call the Free Market.