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The student loan thing

by Ron Holdraker
October 30, 2022

Yes, you probably already made your decision on President Biden’s promise and action to relieve the student tuition debt fiasco. 

One of the flagship campaign pledges made by Joe Biden in the build up to the 2020 presidential election was to enact widespread student debt relief.

President Biden/far left Democrats believe that a post-high school education should be a ticket to a middle-class life, but for too many, the cost of borrowing for college is a lifelong burden that deprives them of that opportunity. During the campaign, he promised to provide student debt relief.

But before you decide any further, let’s look into the reasons why the far left Democrats even suggested such a thing.

In the United States there are more than 43 million people with an outstanding student loan debt, owing a combined $1.7 trillion to lenders. That is potentially 43 million votes. Obviously things have gotten out of control. This type of debt will curtail the economy, especially in poorer minority sectors.

According to the White House, Federal support has not kept up: Pell Grants once covered nearly 80 percent of the cost of a four-year public college degree for students from working families, but now only cover a third. That has left many students from low- and middle-income families with no choice but to borrow if they want to get a degree.

According to a Department of Education analysis, the typical undergraduate student with loans now graduates with nearly $25,000 in debt. When I attended Syracuse University back in the early 1970s, college tuition was in the $5000 range per semester. With the help of my parents, to the tune of $5 grand, Pell grants and working two jobs, I was  able to leave SU after two years owing only about $5000. I earned my Associates Degree at Monroe Community College before moving on to Syracuse, since it made sense for lower tuition costs.

Now remember, all that financial input only covered tuition. There were a few extras like books, transportation,  rent, food and the unforeseen that were required to survive.

In my two jobs, I literally fell asleep standing up while stocking shelves at night, before going to early classes. Sometimes, classes were missed due to schedules and exhaustion.

Still, I made it through and even had a few really good times screwing around and imbibing.

It took several years and some sacrifices to pay off that $5000 college debt, but life went on.

What the naysayers, mostly Republicans, use to attack the Biden/Democrat loan forgiveness program is the phrase: “I had to pay my way, why make life easy for today’s college debtors? 

Actually, they are right. There was no bail-out for our generations. However, tuition, especially in masters and doctorates has skyrocketed. It is not unusual to find a bachelor degree grad owing $50,000 or more, masters over $120,000 and doctorates $200,000+.

Grads, especially in the teaching, health care and social services sectors already know, or should, that their noble careers will take decades to repay student loans. Along the way there is a constant struggle to survive.

Doctors, lawyers and assorted professionals, who did not have the advantage of well-to-do parents, especially in  minorities have a much harder climb.

Democrats know this and since this is a big block of their constituency, they know debt relief on student loans is a sure bet for support.

While student loans can be crucial in helping Americans access these benefits, economists say that student debt is holding the economy back.

According to a CNBC story: “Over the past 10 years, college costs increased by more than 16% and student debt totals increased by 99%. Today, not only do roughly 70% of college students take out loans to pay for their education, but they take out larger volumes.”

The COVID pandemic and resulting economic stress brought this problem to a head. Those with student loans fell prey to un-borrowers. The Bureau of Labor Statistics reports that workers with a bachelor’s degree are less likely to be unemployed and earn 67% more than those with just a high school degree. Plus, college graduates live longer than those without a college degree.

Still, the question swirls. If you knew you would have to pay what you owe and the early years are pure sacrifice, why choose that road to your future?

I have heard of several cases where a student was urged to forego a medical doctor career in favor of the less expensive, but highly rewarded physicians assistant goal. Less debt, but still a rewarding career in medicine.

I have also heard from loan debtors that are paying back those student loans that this is like manna from heaven for the average borrower.

A recent Penn Today  article pointed out: “Many students who borrow successfully complete their degrees in a timely manner and obtain a job with earnings that enable them to easily repay the loan. But, other students who borrow experience challenges. Not all students who enroll complete a degree. Not all students who finish get a job with the earnings that enable them to easily repay the loan. Challenges of enrollment, completion, employment, and repayment have been exacerbated by the pandemic.”

Then there are guys like me. I also sacrificed to pay off school debt, so why should I be burdened with these young whippersnappers costs.

Now add to this that college costs have skyrocketed beyond belief. A tuition to a desired school is well above the $50,000+ threshold, a far cry from my $5000 in the early 70s.

Yes, there are cheaper alternatives, but obviously if you want the best chance of success, what do you choose?

Biden’s promise and plan is purely   stupid. A well thought out way of preventing the current student debt problem could have come in several acceptable alternatives.

1. Government service to reduce student debt. There have been numerous military and social programs in existence to cut considerably student obligations. So, why are not more students taking advantage of these outlets?

The White house suggested fixing the broken Public Service Loan Forgiveness (PSLF) program by proposing a rule that borrowers who have worked at a nonprofit, in the military, or in federal, state, tribal, or local government, receive appropriate credit toward loan forgiveness. These improvements will build on temporary changes the Department of Education has already made to PSLF, under which more than 175,000 public servants have already had more than $10 billion in loan forgiveness approved. The problem here is that many grads want fast take-offs from the starting gate and the idea of reducing student debt with years of service is not always appealing.

2. A form of government help, beyond the traditional methods of reducing student debt could include a matching fund payback. Over a set period of time for every dollar in student payments, the government would match with a type of contribution. 

These are still not  perfect solutions, but in light of “loan forgiveness”, a much better and quasi-acceptable solution is necessary.

A federal appeals court has temporarily blocked the Biden administration from moving forward with its student debt relief program aiming to forgive billions of dollars in federal student loans. Where this all will lead is anybody’s guess.

It most definitely has an impact on voter appeal and anger at the same time. Biden would have loved to overlook this far left agenda item, but, in reality the far left wanted so much more.

Bernie and the crew wanted full student loan forgiveness. Imagine the uproar that would have caused.

The Penn Today article pointed out that “Biden’s plan acknowledges that, in order to participate in higher education, increasingly students and their families need to use loans to pay the costs,” says Perna, also the Graduate School of Education’s Centennial Presidential Professor of Education.

It is estimated that the Biden/Democrat plan for loan reduction will cost $605 billion dollars over ten years. Experts in financial fields suggest it could top over a trillion dollars, depending on future details of the income-driven repayment program.

Bottom line - we must tread carefully since where and when do we say stop? Are we just creating a mold for future such programs? Will every future student expect to get ‘what is theirs’?

This Biden/Democrat quickie solution simply does not address the real cost escalation of a college education.

Stupid suggestions of making the student loan system “more affordable” by cutting monthly payments in half,  or limiting them to 5% of a borrower’s discretionary income—half of the rate that borrowers must pay now under most existing plans.

This idea only stretches out the terms of a the student loans. We must arrive at an equitable plan that does not mask the problem without alienating all, or at least sides of the issue.

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