
<p>President Biden has announced his intention to partially pay off the student loans for a select group of former students. ; It is a cynical gesture to win the votes of young Americans for the Democratic Party in the upcoming midterm elections. ; The President is doing what Democrats do well. ; They use taxpayer money to bribe special categories of voters.</p>



<p>The irony of the scheme is that taxpayers – including the students who benefited – will suffer from the increased cost of government, inflationary price rises, and a future burden of America’s $30 trillion National Debt. ; They will also be the taxpayers paying for Biden’s generosity. ; One way or the other they are getting screwed – but that is not as perceptible as the gift of free money.</p>



<p>Biden appears to be hoping that while he is only doing a partial relief, other young people will like the concept – even if they fail to focus on or understand the downstream backlash. ; Biden would probably do more, but even he knows that it is a bad policy &#8211; and canceling all the debt would put the nation in an immediate surge of inflation and controversy.</p>



<p>By Executive Order, he is offering a $10,000 write-off for those who earn less than $125,000 – and a $20,000 dollar write-off for those who have received Federal Pell Grants to subsidize college costs. ; Not sure why that makes any sense.</p>



<p>And then there are the hidden write-offs. ; Biden provided that no student will have to pay more than 5 percent of their net income. ; That means another loss for the taxpayers – and a modicum of inflationary pressure. ; The Biden scheme also provided for the cancellation of debt not paid off in 20 years. ; Couple all that with weak and ineffective collection procedures, and a lot of student debt will never be repaid.  ; In the meantime, he is continuing his suspension of current payments.</p>



<p>There are three elements in the school loan problem – the government, the schools, and the students. ; The students, however, are the most innocent of the process – the victims.</p>



<p>The primary purpose of the School Loan Program was not to provide better educational opportunities to students who may not otherwise be able to attend college – theoretically enabling them to earn more money during the course of their careers. ; No. No. No. ; That was just the advertising.</p>



<p>What took place was $1.75 trillion of taxpayer money being transferred to the left-wing academic community – many with billion-dollar endowment funds. ; With all that money being dangled by Uncle Sam, the schools responded by increasing tuition beyond inflation – resulting in larger loans and greater debt of the students. ; The students were merely the economic “mules” to carry the money from the government to the schools.</p>



<p>What Democrats did was to increase the money supply for education without a meaningful increase in opportunities. ; It did not result in the building of hundreds of new universities. ; That meant one thing. ; The cost goes up – and up and up it did. ; Since the launch of the Student Loan Program, the cost of tuition and other fees have skyrocketed – far beyond the inflationary increases – while the value of the education provided declined.</p>



<p>The government money was a gold mine for academia – and they did not have to expand or improve the quality of education they provided. ; There was no need to raise tuition. ; In fact, many of the most prestigious universities could have used a small portion of their endowment funds to subsidize students in need of financial assistance. ; They could have actually lowered their basic tuition rates.</p>



<p>Endowment funds? ; Yes. ; For example, Princeton University is sitting on $37.7 billion. ; Yale University has $42.9 billion. And Harvard is the granddaddy of them all with $53.2 billion – the largest academic endowment fund in the world. ; In raising their tuitions, the American academic community was literally bleeding students like Mafia racketeers. ;</p>



<h2 class="wp-block-heading" id="h-an-unsolvable-problem"><strong>An unsolvable problem?</strong></h2>



<p>The problem with the problem is there is no win-win solution. ; Not even a one-sided win.</p>



<p>The political response is to forgive part or all the debt, but that has significant repercussions. ; Since not everyone will be getting Biden’s check from Uncle Sam’s bank, those left out may feel … well … left out. ; And how about all those folks who have dutifully paid off their student loans? ; ;</p>



<p>Then there are those who will be applying for student loans in the near future. ; There is no evidence that there will be any reduction in intuitions. ; Will Democrats engage in the ridiculous policy of providing student loans to those who cannot afford them because of unnecessarily high tuition rates – and then give them money to pay them off? ; ;</p>



<p>To make matters worse, we are finding in this new age of cyber technology the value of the education received – the return on the investment – is very bad. ; Graduates cannot get those high-paying jobs that were promised in the university brochures. ; They are stuck with their crushing debt for much longer than they hoped. ; The investment burden on students increases as the return on the investment decreases. ; Nice.</p>



<p>There may be one road to sanity, but it is not what the Washington establishment – or academia – is likely to do. ; We need to upgrade the quality of education while reducing the cost of going to college. ; That might mean the richest colleges will simply have to cut costs – starting with those exorbitant wages and benefits provided to school officials and senior staff. ; Perhaps the universities can do with fewer professors if they spend more time teaching in classrooms instead of writing books or staring out the window pondering whatever professors ponder – maybe their next book.</p>



<p>The federal and state governments could use their funding leverage to pressure institutions to reduce tuition – and NOT provide subsidies and grants to offset the reductions. ; That just reconfigures the same problem.</p>



<p>To make a college education worth something in the marketplace, we should work to educate the students instead of dumbing down the courses with simple feel-good curricula. ; America’s colleges and universities seem to be responding to the failures of the public-school systems to prepare kids for college, especially those minority urban schools. ; (Have you noticed how Democrats claim these programs are designed to help disadvantaged minority kids when they have been in charge of the failing schools for generations? ; Just asking.)</p>



<p>The Student Loan Program is a HUGE problem. ; It will take a generation to fix if we start working on it today. ; Instead, Biden is offering to put a bandage on a cancer. ; We know how that will turn out. (Does the housing crisis of 2008 come to mind?)</p>



<p>So, there ‘tis.</p>

Students scammed by college loans … and no good solution
