Virtually no one argues that college costs bear any resemblance to reality. Why college costs skyrocket each year and always exceed general inflation has been the subject of many books and is thus beyond the scope of this article. But the short answer is this— college prices are not set in anything even close to a free market. The federal government provides the money and guarantees student loans. There is no incentive for colleges to run a lean operation. In fact, they are overly bloated enterprises, incredibly top-heavy with deans and other administrative positions. Most continue spending millions on new concrete structures on campus with little regard for cost.
Charles Payne of Fox Business pointed out that no bank would give an 18-year-old a $ 200,000 loan for a four-year degree in pottery. Yet the federal government will. But Payne took issue with something else. The Left has been trying to wipe out student loans for years. It’s not a new issue. However, the topic got the most press when Senators Bernie Sanders and Elizabeth Warren were trying to outflank each other on this in the last Democrat presidential primary campaign of 2019-2020. Joe Biden remained steadfastly cool at best to the concept, though White House Press Secretary Jenn Psaki has been teasing the idea of a major announcement soon.
Enter a new take from far-left progressives and Squad member Rep. Pramila Jayapal — canceling student loans is social justice. What? Payne remarked, “the whole thing is a sham” and took viewers through the reasoning in a recent appearance on “Fox and Friends.” He laid out the fact that 70% of this debt is owned by whites. Payne noted Jayapal’s district is only 4.8% black, yet her biggest donor is Microsoft, a so-called progressive company where a scant 3% of its managers are black.
Payne cited data showing those with college degrees can expect to earn over $ 3 million in their lifetimes. Contrast that with $ 900,000 in average lifetime earnings for one who completes only high school. Why should the poorest in society foot the bill for richer folks who made a choice to borrow money to go to college? It’s exceptionally regressivethe exact opposite of progressive policy!
It was a refreshing perspective by Charles Payne, himself black, to have some data and explain that he does not hear loan forgiveness come up in his own conversations with other black voters. Crime and safe streets top the list of what is on black voters’ minds.
Conservatives often get lambasted for being frugal with taxpayer money and opposing ideas like wiping out debt. Traditional moral, ethical, or even contractual arguments like, “you took out the loan – you pay it back” get lampooned by the liberal media mob. Heartless. Cold. Those are the labels liberals pin on conservatives. And now, apparently, racist, at least if leftists get their way.
Just check out some recent tweets. On April 2nd Sen. Warren tweeted, “canceling student debt is a matter of racial, economic, and generational justice.” Sen. Schumer tweeted on March 4, “Today would be a great day for Biden and Harris to cancel student debt.”
But would it truly be great? Setting aside the fact that millions who already worked hard to pay off their debts could become a mob of their own and demand justice, is this idea even remotely good economics? The answer is no, according to an analysis by the University of Chicago’s Becker Friedman Institute for Economics. This scheme is destined to disproportionately benefit wealthy Americans.
The study concluded erasing all student loan debt would deliver $ 192 billion to the top 20% of earners in the US, but only $ 29 billion to the bottom 20% of US households. Further, the study found under a universal loan forgiveness program, the average person among the top-earning borrowers would receive $ 5,944 in forgiveness, while those with the lowest incomes would receive $ 1,070 in forgiveness.
No matter. Never confuse economic facts with today progressive politics. If you oppose wiping out student debt, even though it was taken on by people of their own free will, you risk being branded a racist.
Jeff Szymanski works in political communications at AMAC, a senior benefits organization with nearly 2.3 million members. He previously taught high school economics for 15 years.
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