Bernie Sanders' New Plan Would Cancel Hundreds of Billions in Student Debt, But Reward the System That Created This Crisis
I have traversed my college education with my financial future firmly in mind. Student loan debt is no laughing matter, and millions of Americans are struggling with its burdens.
Those burdens, however, are always undertaken voluntarily, and student loans serve as an early and harsh lesson about paying back your debts.
Unfortunately, while progressives seem to be entirely unconcerned with debt if the government is the debtor, independent Sen. Bernie Sanders of Vermont and Democratic Rep. Pramila Jayapal of Washington have proposed a plan that could dismantle lending for students in its entirety.
CNBC reported Wednesday that Sanders and Jayapal’s “College for All Plan” would make public community colleges and trade schools tuition-free for all, and would remove tuition at public four-year universities, historically black universities and other minority-serving institutions for students whose families earn less than $125,000 annually.
“In the wealthiest country in the history of the world, a higher education should be a right for all, not a privilege for the few,” Sanders said in a statement.
“If we are going to have the kind of standard of living that the American people deserve, we need to have the best educated workforce in the world.”
Furthermore, the proposal would also double the maximum possible Pell Grant award to nearly $13,000, make Dreamers eligible for loans and boost funding for disadvantaged groups.
“It is absolutely unacceptable that hundreds of thousands of bright young Americans do not get a higher education each year, not because they are unqualified, but because their family does not have enough money,” Sanders said.
While the College for All Plan does not absolve extant student loan debt, that does not mean Sanders and Japayal are uninterested in abolishing that, too.
“While President [Joe] Biden can and should immediately cancel student debt for millions of borrowers, Congress must ensure that working families never have to take out these crushing loans to receive a higher education in the first place,” Jayapal said.
So how would such a transformative plan be paid for, especially as the country struggles to recover from government-imposed shutdowns? By increasing taxes, of course!
“The bill says the federal government will shoulder 75% of the cost of free college at public schools, with states paying the remainder. In the event of an economic downturn, the federal government’s share would increase to 90%,” CNBC reported.
The money itself would be raised by the “Tax on Wall Street Speculation Act” — a bill also championed by Sanders — which would levy small fees on stock and bond trades, as well as on derivative transactions. Such a tax would be catastrophic for the rich, middle class and poor alike.
This piece of legislation would be a disaster for both moral and practical reasons.
On a moral level, what kind of message would the government send by bailing people out of their own financial decisions? It sets a precedent that the government will save you from your own mistakes, and that the magical money tree will hand you whatever you need at a given point in time.
In addition, the money would go to an institution that includes curriculum harmful to our republican society. Many universities shower students with a particular, politically correct narrative that considers all disagreement and dissent to be a threat.
Practically, the government would be trying to solve a problem that it almost unilaterally caused. While the left will often blame the student loan crisis on a failure to invest in public universities, the opposite is actually true.
According to Jimmy Sengenberger, the founder and director of the Millennial Policy Center, “The real cause of the student loan debt crisis is clear: Liquidity provided by the federal government enables colleges and universities to raise their prices.”
“[S]tudent loan debt totaled $500 billion in 2007. In 2008, the Bush administration and Democratic Congress passed the Ensuring Continued Access to Student Loans Act,” Sengenberger wrote in a 2019 Op-Ed for MarketWatch.
“This largely began the nationalization of student loans. It got worse in 2010 with the Health Care and Education Reconciliation Act (HCERA). Directly tied to the Affordable Care Act (aka Obamacare), the HCERA lit the fire of direct government lending for student loans.”
“Unsurprisingly, student loan debt has doubled since the HCERA,” he wrote.
It is no longer sufficient for conservatives to merely resist these inane, progressive policy proposals. It is up to us to provide viable alternatives, using the power of free enterprise to achieve some measure of good.
Otherwise, the progressives will keep their policy monopoly, and send the country spiraling.
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