By Evan Raymond
Federal student loans should not be forgiven. Let me make one thing clear for all of you before I continue. I do not support the current federal loan system, I believe that the government is preying on the poor and taking advantage of young adults who just gained their legal independence. However, this does not mean these legal adults are not at fault as well. There is a shared blame from the recipient of the loan and the government who gives them out.
Now, the reason I am not in favor of forgiving federal student loan debt is simple. It is not the taxpayers job to bail out people who made poor decisions, not all outcomes are equal between majors, and we need to bring logic into giving out these loans.
As harsh as that may sound, it’s the truth. If we as a nation are to secure our individual liberties, we can not take away money from taxpayers for people who have nothing to do with what they’re investing in. The student is solely responsible for taking on these loans and it can’t be the taxpayers’ burden to accept their failures to pay their debt. Even though the government has placed a failed system into our college loan programs, the students give consent to take these loans before they realize they can’t pay them.
Before accepting a student loan, the student must take into consideration what exactly the student loan entails. Does it have a high interest rate? How much will I owe after four years? But, the most important of these questions is this: is the career I am entering able to pay for this financial burden I am about to put on myself?
This question I just asked is hard for many to answer. Many people entering college change their major and don’t officially know what they want to do with their life. But it is a question we all had to ask ourselves before entering college, and one that should continue to be asked not only by us, but also the colleges who give these loans.
When you look at a normal loan, the loaner will investigate the loanee, and ask himself or herself, is this loan worth making? As an investor you don’t want to invest in something that has no value in the future.
The reason the debt crisis lives in our nation today is because of that; students inability to pay back loans, due a low-paying future they may not realize the magnitude of. When the government removed banks, or as they referred to as the “middle man,” from college loan programs in 2007, they also lost the ability to filter through what had a future and what didn’t. That’s why a gender studies major is able to get the same amount from loans as a computer science major. While one is obviously more valuable, and will have the ability to pay back the loan, a gender studies major will never find a meaningful job that is in demand, because there is simply no use for that degree.
When you give equity to loans, you destroy any semblance of hope a student may have of paying it back. Simply put, not all majors are equal, not all outcomes are equal, and the
government should not be in control of loan programs. There is no filter. There is no reasoning in giving out these loans. Do not pass go, do not collect 200 dollars.
How do you fix this crisis? I could sit here and complain all day about government incompetence and a failed system, but what good would that be if I didn’t have solutions?
- The government needs to put banks and colleges back in charge of loans.
- As I explained earlier, the government has only worsened the college debt crisis and has created a broken system. They have no filter and no way of knowing who can and cannot pay back their federal loans. Therefore, we need to remove the government from this process, and put schools and banks in charge of the debt process. If they are able to work together, this would create a checks and balances system that doesn’t allow either side to overstep their duty.
- The colleges and banks need to have a clear and simple system that is easily explainable to the average person.
- Today’s system is overcomplicated. In a Brookings College study, they found that 28% of students do not even know they have a federal loan. This implies that the system is too complicated and hard to understand. If banks and universities create a quota or a way for students to be able to understand their agreements better, this would further help the crisis.
- The banks also need to invest in futures of meaningful weight. No more investing in Gender/Womens/Ethnic Studies. Academic majors must be invested in, because their future is more certain.
- I’m sorry but as much as studies majors and other “liberal arts” majors claim their major is worth just as much as a computer science major or biology major, the fact of the matter is that it is not. There are hardly any jobs for those majors and even more scarce is high-paying jobs for those positions. Academic majors are not only better for society, but they are also a better investment for loaners to make, because they can pay them off.
- Banks and colleges need to implement Income Share Agreements to ensure fairness for both the student and the college.
- ISA’s allow an equal commitment to both universities and students. These work by allowing students to only pay colleges or banks if they succeed. This allows a fair agreement between both parties, and allows for debt not to be created. Both parties only get paid if both parties succeed, which allows for an equal burden, instead of the entire burden being on the student.
In the end, I believe the only way to fix the debt crisis is to remove the catalyst of the issue; government. As much as I wish money could just go away and we could get rid of the debt without harming people and the economy, it’s just not logical. I hope taxpayers and students alike could unite and understand that the system is broken and needs reform. Otherwise, we as a nation will continue the same cycle that we’ve been going through for years, the problem will get worse, and nothing will be solved.
Mr. Raymond is a freshman double majoring in English and Vocal Performance.
Sources:
Solving Student Debt: https://www.youtube.com/watch?v=swiCHcdqJ7Y The College Scam: https://www.youtube.com/watch?v=m4gLDXfXgbs
Freeloader U: https://www.youtube.com/watch?v=-uYERZX0aJM
Brookings Reports:
https://www.brookings.edu/wp-content/uploads/2016/06/are-college-students-borrowing-blindly _dec-2014.pdf