Elizabeth Warren Earns a BS Degree in Student Lending
The cumulative student loan debt of 44.7 million (voting age) Americans currently exceeds $1.5 trillion.
College is expensive, but enrollment is a personal choice. Indeed, degrees – and student loan debt – can be good investments. Over a career, graduates with bachelor’s degrees earn, on average, $1 million more than workers with high school diplomas. Graduates with professional degrees typically earn $2.3 million more than high school graduates. However, not everyone who acquires debt to attend college focuses on career opportunities and earnings – or even graduates.
Now, attempting to one-up other Democratic presidential aspirants, Senator Elizabeth Warren has proposed to pay for “Amber’s” Women’s Studies, “Brandon’s” Comedic Arts and “Leslie’s” Leisure Studies degrees with other (some as-yet-unborn) people’s (as-yet-unearned) tax money.
Never mind that they and many thousands of other youngsters chose those actual examples and hundreds of other easy, impractical, non-job-producing degree programs that institutions of “higher learning” offer to attract, keep and indebt kids eager to leave home for campus fun.
From Warren’s website:
“It’s time for bold action to actually fix the debt crisis. Here’s what my new plan would do:
“[C]ancels $50,000 in student loan debt for every person with household income under $100,000.
“[P]rovides substantial debt cancellation for every person with household income between $100,000 and $250,000…
“[O]ffers no debt cancellation to people with household income above $250,000…
“[C]ancellation will take place automatically using data…available…about income and outstanding student loan debt.
“[T]he federal government will work with borrowers and…holders of [private student loan debt] to provide relief.
“Canceled debt will not be taxed as income.”
Warren’s proposal is highly regressive. According to the center/left-biased Brookings Institution, the bottom 20 percent of borrowers by income would receive only 4 percent of the savings, the top 40 percent about 66 percent. Those with advanced degrees, 27 percent of borrowers, would receive 37 percent of the benefits. The greatest benefits would accrue to families that can afford to pay the full price at public universities.
Under Warren’s plan, more than 75 percent of borrowers’ loans would be completely wiped out, and more than 95 percent would see partial debt reduction. Suckers who repaid student loans and older borrowers who paid faithfully for years would be out money, but they’d still be liable for the debt of others, including highly-compensated professionals. At an estimated cost nearing $1 trillion, Warren’s plan is a transparent vote-buying scam – a burden on, an insult to every taxpayer who took a job without taking on debt, but would be forced to repay someone else’s college loans.
The problem could be solved by removing government from the student loan business and, more importantly, making the institutions that admit but fail to graduate students – or place indebted graduates – responsible for repaying some or all of their debt. Then colleges would stiffen admissions, stop inflating grades and quit enrolling students who need loans into expensive majors that provide few occupational opportunities.
Meanwhile, youngsters should choose more carefully, work hard, and, as responsible adults, repay the debts they acquired voluntarily.
