The Student Loan Debacle: Hurting Students, Abusing Taxpayers

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Commentary

Americans generally value education highly. They see education as opening doors of opportunity and as crucial to both individual and social progress.

Far-seeing and generous colleges have long made scholarships available to students who otherwise wouldn’t be able to afford a college education. Private lending institutions used to extend loans to economically disadvantaged youth so that they wouldn’t be excluded from receiving the benefits of higher education. As the fundraising campaigns of the United Negro College Fund in the 1950s put it, “A mind is a terrible thing to waste.”

Indeed, it is—and not just for however many bright individuals couldn’t reach their potential because they couldn’t afford to pay for the necessary education; it’s a loss for our society as a whole. How tragically unenlightened it was for our society to lose out on the talents of some of our most brilliant individuals.

The federal government got involved in the student loan market via the National Defense Education Act of 1958. In 1965, Uncle Sam started to subsidize and guarantee loans from private lenders to students. The first federal direct student loan program was inaugurated in 1992. In 2010, the federal government effectively nationalized the student loan market, ended subsidies and guarantees and switched 100 percent to direct lending.

It was during the Obama presidency that the college student debt market spiraled out of control. The total amount of student loans more than doubled from 2009, Obama’s first year in office, to 2017, when he left office—from an already bloated $657 billion to $1.367 trillion. During that time, the number of borrowers ballooned from 32.1 million to 42.6 million.

Today, the total student loan debt is a gargantuan $1.75 trillion. President Joe Biden keeps trying to find ways to pardon much of that debt, even at a time of trillion-dollar annual deficits. How is that ethical? What comes next—forgiving credit card debt, auto loans, or mortgage debt?

As is so often the case, when government gets involved, regardless of whatever good intentions are claimed, it makes a mess of things. So it is with student loans. Many recipients of those loans have had their lives mangled (more on this below). As for taxpayers, their tax dollars once again are being wasted on counterproductive spending.

The taxpayers who are getting abused the most are conservatives and libertarians. Year after year, we read reports about the astonishingly lopsided ideological and partisan imbalance on college faculties—ratios such as 25:1 Democratic/progressive/socialist professors to Republican/conservative professors. The dominance of “woke” and progressive ideologies is so extreme on some campuses that even a very occasional conservative guest speaker is considered persona non grata. Too often, such speakers are subjected to threats, intimidation, assault, and censorship.

How can this be fair when conservatives are approximately as numerous as progressives in our society and, presumably, supply as many tax dollars to universities as do progressives? Why should conservatives be forced to subsidize schools that suppress conservative views and vilify conservative individuals and ideas while indoctrinating students in progressive ideology? Why should conservatives be taxed to promote DEI, which wokesters claim stands for diversity, equity, and inclusion, but in practice stands for discrimination, exclusion, and intolerance?

Looking beyond the shoddy, unfair treatment of conservatives in higher education, government student loans impose costs on all taxpayers, regardless of political orientation. For decades, American colleges and universities have been cranking out graduates far in excess of what related job markets can absorb. From an article I wrote more than a decade ago: “More than half of Americans under the age of 25 who have a bachelor’s degree are either unemployed or underemployed ... nearly one percent of bartenders and 14 percent of parking lot attendants have a bachelor’s degree ... nearly 300,000 Americans with master’s degrees and over 30,000 with doctorates are on public relief.”

What we have in higher education is an ongoing colossal misallocation of resources, wasting vast amounts of taxpayer dollars. The problem has been the attempt to democratize education. While student loans thankfully have helped some very talented people develop important skills in college, the policy of swelling the overall number of people attending college has hurt many of the students it was supposed to help. Millions of Americans have realized too late that they’ve wasted valuable years of their lives and have only disappointing job prospects and burdensome debt loads to show for it.

The problem is minimal in fields such as engineering, medicine, and computer science, where competency requirements winnow out weak students relatively early, but in the liberal arts, it has been a disaster. You don’t have to sell me on the potential value of a liberal arts education (that was my own path through academia), but it’s in the liberal arts that the ridiculous oversupply of degrees is being generated.

Frankly, apart from the problematical job prospects, I recommend that young people avoid liberal arts. In the current era of wokeness, “liberal arts” has been perverted into “illiberal indoctrination.” One example: Recently, Stanford compiled a list of offensive terms that people in its IT community should refrain from using—words such as “American.” The backlash against that nuttiness was so intense that Stanford withdrew that compilation, but that doesn’t change the fact that many woke professors have totalitarian tendencies; they want to control not only what you do but also what you say and how you think.

There’s a very simple path out of the government’s wasteful, counterproductive student loan debacle: Just stop doing it.

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