Letter – Wrong solution to student debt
Published 6:17 pm Tuesday, August 30, 2022
Editor, The Smithfield Times:
Federal student loan payments and interest have been frozen over two years. On Aug. 24, President Joe Biden announced $10,000 in federal student loan forgiveness for single earners making under $125,000 per year, or $250,000 for married couples or heads of households, without having the authority to do so.
In July 2021, House Speaker Nancy Pelosi said that President Biden does not have the authority to issue debt forgiveness, that such action has “to be an act of Congress.” Still, some Democrats are clamoring for even higher amounts or complete forgiveness of individual federal student loan debt. This isn’t debt forgiveness; it’s debt transfer.
Why should I or any other taxpayer be on the hook for someone else’s voluntary debt, especially any family making nearly a quarter-million dollars a year? This is unfair to those who already paid their loans, those who never attended college, or those who are faithfully paying or paid other loans like vehicle and home loans.
Loan forgiveness is not the answer to the so-called student debt crisis. If anything, this will encourage even more federal student loan debt, because the expectation will be some or all of that debt to be forgiven by the federal government.
Over the past two decades, college tuition has increased more than any other good or service besides hospital care. The more government spends on financial aid, the more colleges and universities charge for everything. It’s a vicious cycle that must be broken.
With $1.7 trillion in outstanding federal student loan debt, colleges and universities have benefited immensely from federal student loans, yet bear none of the financial risk. They get paid whether their students succeed or fail. Institutions of higher learning need to be held somewhat accountable for the financial mess they helped create.