Another day, another great transfer of wealth.
President Joe Biden has delivered on his student debt relief campaign promise with a $300 billion plan that will take money from blue-collar workers and give it to white-collar workers.
When Democrats wonder why they keep losing the votes of many low-income communities, they might ponder the fact that the government just agreed to provide $10,000 in taxpayer-funded debt relief to people who earn up to $125,000 per year.
The economics of this decision only fuels an inflationary fire, as noted by former Obama administration official Jason Furman. And Biden’s legal justification, based on a 9/11 emergency order, amounts to an abuse of presidential authority.
Meanwhile, there is little discussion about some of the root causes of the so-called student debt crisis. The price of a four-year college degree has skyrocketed at speeds that make our current inflationary spurt seem like a slow roll.
A number of colleges and universities — flush with endowments, taxpayer funds, or both — continue to raise tuition fees as they layer on administrators and build fabulous campuses that would make a sultan blush.
Even the smallest universities are forced by bottomless federal requirements to increase administrative costs that are passed on to students.
Many of these same universities offer an ever-expanding array of majors with questionable economic or academic advantages. Students earn degrees in hyper-specialized subjects that do not apply uniformly to the waiting job market. Meanwhile, universities demand less and less knowledge in common and broadly applicable subjects that once formed the core of a university education.
Sometime after World War II, the culture decided that a college degree was the ticket to a stable and productive life of upward mobility.
For a while it was good business. But the value of the ticket was distorted in several ways. There are plenty of jobs that shouldn’t require a degree. And there are plenty of degrees that aren’t worth the paper they’re written on, despite the burden of debt they’ve placed on their recipients.
The student loan crisis is truly an education crisis. Students pay a lot for little. The Biden administration will now pass some of that cost on to taxpayers.
The message to young people is that they were not really responsible for the loans they took out. The system was unfair. And there’s some truth to that, at least insofar as the value of their degrees doesn’t match the cost.
But why do we treat the symptom, instead of trying to cure the disease?
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