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Giving Compass' Take:
· Although student loan forgiveness sounds attractive, Mary Clare Amselem explains that it promotes financial irresponsibility and and these short-term solutions are problematic in the long-run.
· What concerns does the author raise about forgiveness programs? What does she suggest is the real cause of the high student loan debt?
Senators Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts are making headlines with their plans to forgive student loan debt and make public colleges tuition-free.
While many agree removing financial responsibility on the part of the student is bad policy, the 45 million Americans holding student loans undoubtedly see debt forgiveness as attractive.
Burdensome student loan debt is indeed problematic. Studies show it has discouraged desirable economic activity such as starting a business or buying a home. But loan forgiveness will cause more problems than it solves.
Both Warren and Sanders propose to pay for their plans by raising taxes. Why should American taxpayers have to pay off loans that students took on voluntarily?
Two-thirds of Americans do not hold bachelor’s degrees. Their choice not to go to college, whatever the reason may be, in many cases may have involved a desire to avoid the high cost of higher education.
These Americans are statistically less likely to earn as much as Americans who do hold bachelor’s degrees. It is regressive, or taking a larger percentage from low-income earners, to ask Americans who purposely avoided the high cost of college to pay for students who chose to take on mountains of debt.
Read the full article about student loan debt by Mary Clare Amselem at The Heritage Foundation.