A War on the Wealthy Isn’t the Solution to Student Debt Crisis

Haley Walters (C) marches with her class at the Pasadena City College graduation ceremony, June 14, 2019, in Pasadena, Calif. (Robyn Beck/AFP/Getty Images)

Commentary

Sens. Bernie Sanders (I-Vt.), Elizabeth Warren (D-Mass.), and other Democrat politicians believe that student loan debt should be wiped out.

The magnitude of student loan debt is second only to mortgage debt, which is the highest consumer debt in our country.

According to Investopedia, President Bill Clinton’s administration began granting student loans; the government had been guaranteeing, but not granting, such loans since 1965. At the end of President George W. Bush’s administration, there was $140 billion in student debt. Student debt exploded to $1 trillion during President Barack Obama’s administration, which monopolized student loans by the federal government as part of the Affordable Care Act. Some private banks continued to grant student loans, but they fell by 90 percent.

Unlike federal government loans,  private banks require a co-signer, and if loans are not repaid, wages and income are garnished.

A variety of miscreants have added to the outrageously increased cost of higher education and student loans. The escalation of million-dollar-plus salaries for presidents, senior administrators, coaches, and faculty along with extravagant school administrations, contribute to the high cost of degree programs.

Another is the doctrine that every student should aspire to a bachelor’s degree. In several developed countries in Europe, there are sophisticated post-high-school apprentice and trade education programs. The results are excellent for providing needed skilled workers with good-paying jobs.

President Donald Trump recognizes the importance of vocational education in the United States. In 2018, he signed an executive order to expand apprenticeships in the United States to enable more Americans to obtain relevant skills and high-paying jobs. These programs strengthen training for skills beyond high school, but don’t require a bachelor’s degree.

Paths to student loan forgiveness are currently available. Written by politicians, these programs are confusing, difficult to navigate, and have high rejection rates. Rather than work on an easy-to-understand and easy-to-apply program that could consolidate loans and allow student debt to be dealt with on an individual responsible basis, leftists want to give 45 million student borrowers a get-out-of-jail-free card; Democratic candidates would give a pass for $1.6 trillion of student loans. This is approximately 37 percent of government assets, and can’t be deleted with the push of a button.

The solution to finding funds to pay for student debt forgiveness, according to Warren, is an “ultra-millionaire tax”—a 2 percent annual tax on the 75,000 families with more than $50 million in wealth. Sanders’s panacea is a “Robin Hood Tax” on Wall Street—0.5 percent tax on stock trades, 0.1 percent on bond trades, and a 0.005 percent fee on derivatives.

Both Sanders and Warren have additional socialist wealth tax schemes to redistribute American wealth. Taxing the rich will inevitably come down the money ladder to increased middle-class taxes. As former UK Prime Minister Margaret Thatcher said, “The problem with socialism is that you eventually run out of other people’s money.”

Options to deal with student loan forgiveness exist. Student loan repayment has become a recruitment benefit offered by a variety of corporations seeking to hire new graduates.

Nurse Loan Repayment (NLR) is a loan forgiveness program available in 33 states. NLR is for nurses, nurse practitioners, and members of nursing facilities who work in areas where there is a critical shortage.

A Teacher Loan Forgiveness (TLF) Program was created by Congress in 1998 to discharge loans under certain provisions. It encourages teachers to take positions in schools that serve low-income families. There are 13 states that offer loan forgiveness for teachers.

Even lawyers can find loan forgiveness by taking positions in government offices, such as the Department of Justice and Air Force Judge Advocate programs. Information on various student debt forgiveness programs is readily available online.

The Public Service Loan Forgiveness (PSLF) Program, created by Congress in 2007, was designed as a method of loan forgiveness for teachers, public health, and law enforcement public service workers. The PSLF Program is a disastrous red tape failure. In March, Trump proposed eliminating this program. Congress hasn’t voted on it, nor presented a user-friendly replacement to deal with student loan forgiveness.

When the student’s alma mater, rather than the federal government, is the lender, there are a variety of Perkins Loan Forgiveness jobs. Students can check with school loan administrators, who have application forms and lists of positions that qualify for loan forgiveness.

Socialist politicians want to transfer wealth in our country. One of their methods is to forgive the second-largest amount of debt in our nation: student debt. There are better ways to handle that crisis.

Remember that a camel is a horse that was designed by politicians.

Darlene Casella is a former English teacher, stockbroker, and owner/president of a small corporation. She is active with Federated Republican Women, the Lincoln Club, and the California Republican Party.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.