Since spring 2021, the Biden Administration has canceled student loan debt for certain groups of students: Most recently were graduates of ITT Technical Institutes (“ITT Tech”), schools accused of having misled students about job prospects, earning potential, and the transferability of credits. Before that were borrowers with disabilities and before that were graduates of Corinthian Colleges, so-called “for-profit” colleges, also accused of misleading students.
These “targeted relief efforts” treat symptoms while neglecting the underlying disease.
Student loan forgiveness has many advocates who typically emphasize the insupportable debt carried by many individual college graduates and college drop-outs, as well as the burden on a whole generation that finds its path to full adult responsibilities blockaded by those loans.
Expunging the debt by the stroke of a pen seems like a magical solution, but like most magic, it is an illusion. Whether loan forgiveness is piecemeal or wholesale, it ignores the underlying problem of the shameful collusion between big government and higher education that has perpetuated this problem.
Federally backed student loans in theory ease the way for students to attend colleges they could not otherwise afford. In practice, those loans enable colleges to set artificially high prices and to pass these prices on to students who have little understanding of the consequences of borrowing the funds. The colleges happily accept and thrive on borrowed money without having to borrow it themselves. Legislators congratulate themselves on making a college education “more accessible” when mostly what they do is enable price gouging, fiscal extravagance, and debt misery.
What we need is not loan forgiveness but a reconceptualization of the government’s role in financing higher education. It must be conceptualized in a way that ceases to reward spend-thrift institutions and instead incentivizes fiscal prudence.
We need to prioritize more dramatic reform of higher education.
The National Association of Scholars has made concrete recommendations for such reform, both in our annual publication, Freedom to Learn, and also in our response to COVID, Critical Care. Both insist that any public support of higher education, including recent COVID bail-out funds, be conditioned on steps toward fundamental change, including caps on student loans, the easy money that fuels the upward spiral of tuition, and cuts in administrative bloat, the endless bureaucracy that this easy money buys.
And those changes are only the beginning. NAS Reports also discuss prioritizing American students, increasing intellectual diversity on faculty, and mandating due process in school disciplinary proceedings, among other demands. Things have gotten very bad on campus so the “fix it” list is, unsurprisingly, quite long.
The point here is that “targeted relief efforts” from the Biden Education Department are nothing more than band-aids for a system that wastes money and produces a great many marginally qualified and debt-ridden students.
Who benefits from the Biden administration’s superficial, stop-gap measures?
In the short term, some indebted college graduates benefit. Some politicians benefit. And many colleges and universities benefit by being able, once again, to sweep the real problems under the rug.
America definitely does not benefit.