Among Democratic presidential candidates, student loan debt offers sweet opportunities to pander. Sen. Elizabeth Warren of Massachusetts has the boldest plan, promising to help 95 percent of those with such obligations. Sen. Kamala Harris of California favors a “commitment to debt-free college.” Sen. Bernie Sanders of Vermont says action is needed because “we don’t punish people for the crime of getting a higher education.”
Of course debt is not a crime, and the reason so many young people have borrowed to finance college is because they think a degree is more than worth it. For some students, that’s a bad decision. But that’s no reason to wipe out these debts for people who benefited from them and can well afford to repay them.
Today, 45 million Americans owe some $1.5 trillion, more than double the total in 2009. The average monthly payment is around $400. For young people earning entry-level salaries, that’s significant.
Warren’s solution is to forgive as much as $50,000 owed by anyone in a household whose income is less than $100,000 a year. Those making more than that, up to $250,000, would get partial relief. She also wants to head off future student debt by making public colleges and universities tuition-free.
What’s wrong with this approach? Plenty. By Warren’s account, the loan forgiveness would cost $640 billion. But Urban Institute analysts Matthew M. Chingos and Kristin Blagg say the sum would be $955 billion. Neither figure includes the cost of eliminating tuition, which Warren figures will require $610 billion over a decade.
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11.30.2024