Sen. Chuck Schumer (D-N.Y.), who proposes that President-elect Joe Biden cancel up to $50,000 in federal student loan debt, also suggests that forgiveness for these borrowers include no tax liability . This shifts the burden to taxpayers. Graduates who paid off their student loans, parents who sacrificed to pay tuition, and the millions of taxpayers who never attended college pick up the tab. The largest proportion of U.S. student debt — 59% of it, according to a 2019 Brookings Institution analysis — is held by people in the highest and second-highest income quintiles. They incurred debt to gain degrees, often expensive ones such as in medicine, dentistry and law. But those degrees usually have paid off for them. The analysis also advises that programs that provide progressive repayment terms and a path to loan forgiveness for low- and middle-income borrowers have reduced the monthly loan burden for millions of borrowers and suggests capping payments at 10% of discretionary income for almost all borrowers who ask for it. Waiving a $50,000 debt by executive order is not the answer for this issue.
I think that when high school students start the college admissions process, they need to look at how they plan to pay off their loans. For example, I believe that a person getting a degree in social work from a private college has almost an impossible challenge to pay off a four-year degree. If students plan to go to an expensive school, they’d better look at careers that have the earnings potential to pay back the loans. In addition, one need not go to a fancy school to get ahead, just work hard. I say $50,000 in school loans is not an insurmountable challenge to pay off. Take some responsibility, maybe get a second job. I put myself through college by working and going to school at the same time. It took me 10 years to pay off my school loans. I also took on extra work whenever I could. To me, kids today want an easy ride, and the politicians cater to them for votes, at the expense of taxpayers.
How is forgiving up to $50,000 in college student loans fair to the families who didn’t take loans but paid the tuition as they went? Many families saved for college for years by not spending extravagantly, fixing up the old car instead of buying a new one, not going on vacations, and getting second jobs. Many of these students got a summer job and a job at school to pay for all the extra expenses not included in the tuition bill. And what about the people who chose not to attend college but instead went directly into the workforce? Why should all of these people subsidize those who voluntarily took college loans? Nobody forced anyone to take loans in such large sums. The loans should be paid back by those who took them no matter how long it takes.
While I understand the desire to forgive billions in student loans, I don’t see much talk regarding how to pay for it all. I also fail to see how forgiving billions of dollars can be done simply by executive order when the money will probably need to be raised as a tax on Americans, and I thought only Congress could enact a tax. This seems like a one-time bankruptcy-type, gimmicky quick fix that will reduce debt for current students and then new student loan debts will immediately begin to pile up again. Instead of a one-time accounting trick, why not address the prohibitive cost of college and the real reasons these huge debts pile up in the first place so we don’t end up in this same situation a few years from now? Or is that not flashy enough or too hard for Congress to take on?
Regarding Sen. Chuck Schumer’s plan to forgive federal student loan debt, will an employer have the right to ask a few new questions. Such as: Did you borrow money from any federal- or state-backed (publicly paid) fund to improve yourself, including higher education? Did you pay it back, or are you still paying it back? Did the federal or state government have to cancel your debt because you could not pay it back? Thinking about the millions of people who chose different paths because of their finances, shouldn’t an employer know more about prospective employees? I’m not against interest-free, long-term payback periods, but I believe to borrow money and not pay it back should not be the “new normal.” Remember, you don’t need higher education to run for public office.