By Alex Hernandez-Zavala
A college dichotomy continues to plague the U.S.––getting higher education partnered with extensive student debt.
Student debt has been steadily increasing over the past 17 years. Based on an Education Data report, 43.2 million students are currently drowning in debt. And now lawmakers are proposing legislation to solve this issue.
A Business Insider article outlines that Democratic lawmakers are pushing President Joe Biden to eliminate $50,000 of student debt loans per person in an attempt to fight this student debt crisis.
Aside from looking at this proposal from a student’s perspective, where they would greatly benefit from graduating with minimum debt, this legislation sadly would have a neutral impact on the economy.
Yet, I believe there are other better ways of addressing this issue.
Don’t get me wrong, $50k is a very generous sum of money to give students who are in debt, especially considering that the average student debt is a little over $39k. Although President Biden says he’s open to legislation that would relieve $10,000 per person, according to Business Insider, I still don’t think this is the best way of going about this issue, as it will do more harm to the economy than good.
A Forbes article explains how minimal the effects of forgiving student loans would have on the economy, “The authors estimate that if the federal government spends approximately $1.6 trillion to cancel student loans, the net effect would be only $90 billion of available cash to spend in 2021 and less than $450 billion over the next five years.”
Not to mention that the U.S. deficit just hit $1.7 trillion, according to Business Insider. This legislation would make that deficit rise in the short term, but won’t do much to reduce it in the long run. Since our economy is just coming back from the damages caused by COVID-19, adding on to the U.S. deficit wouldn’t be a great idea, especially considering the second wave of stimulus checks that have already arrived in people’s bank accounts largely contributing to the deficit.
I think we should tackle the problem at the source––tuition rates.
Education Data addresses the rising issue of tuition rates as they have been skyrocketing since 1978.
A logical solution would be to find a way to lower these tuition costs, but how? For starters, maybe reducing how much we spend on our sports programs.
In an article by Axios, they show that “At the more than 1,100 schools across all three NCAA divisions, roughly $18.1 billion was spent on athletics…”
Let that resonate for a moment. Now I understand many people have intimate connections with college athletics. Many more rely on college athletic programs to pursue their life-long goals, but do we need athletic programs this big? No.
By reducing the college athletic programs budget by, say, decreasing the salary of coaches and halting the construction of new stadiums and athletic facilities, colleges can allocate that money to students in the form of scholarships.
Another possible and popular solution is to have private companies help pay off student loans.
They do this by offering a student loan repayment assistance program and write it off as an employee benefit, states an article by CNBC. It’s essentially a way for employers to avoid paying taxes.
It’s a mutually beneficial way of helping both employees and businesses. Businesses avoid paying taxes while employees get money to pay their student loans. Name a better match.
It’s also much more efficient as the government wouldn’t have to go into a deeper deficit than they already are when paying off student debt.
This method is becoming more popular and is expected to be a universal practice in the near future.
No matter where you stand on the issue, solving the problem of student debt isn’t easy. I’d argue that student debt is the biggest problem of this first-world nation that can easily be solved by lowering tuition costs.
It’ll take a while for Congress to settle on legislation that would reduce or even eliminate student debt completely, so in the meantime let’s look to other alternatives to resolve this ongoing issue.
Alex Hernandez-Zavala is a first-year student at UC Davis, double majoring in Psychology and Sociology. He was born in the Central Valley and raised in Salinas, California.
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A well thought out article with not the answer I expected when I read the title. I don’t think the gov’t should pay off student debt. This is so unfair in many ways to the students and families who have worked hard and pinched pennies in order to pay back their student loans.
It’s way beyond that . . .
Gov’t paying the debt means all those who work hard but never went to college, and all those who paid off their loans, are paying for those who didn’t. Why should they pay?
Gov’t paying gives the impression to those who are taking out loans in the future that they aren’t really loans, but free money they will never have to pay back.
Bloating the balloon of debt / gov’t infusion just further inflates the money inflow into the inefficient and wasteful college systems (and public union contracts), raising the prices on everything including tuition for those least able to pay.
Je d’accord… I affirm, Alan…
One could look at it as “pro-choice”… you choose to go into debt, you deal with that choice… there was a time, when we had a young family, we went too far into debt… our choice, but bad consequences, that we had to pay off… and we did, without subsidies, ‘forgiveness’, etc.
Je d’accord… not even charity, where one could get a small tax break for a “fund me” effort…
The mentality seems to be , “what’s yours is mine, and what’s mine is my own”… all for ‘social justice’… ‘reparations’… ‘free ride’… ‘entitlements’… ‘rights’…
No matter how you spin it, it is forced ‘charity’, with no choice to be charitable… compulsory… we took out student/parent loans for education… and paid them off, in full… logical… moral.
I also agree with the author about the bloated sports programs with bloated coach salaries. While we’re at it administration officials are often way over paid. There are ways to cut costs and lower tuitions.
While not defending bloated salaries, for the most part cutting those salaries will have little effect on tuition.
Getting rid of public employee unions will.
This is just simply redistribution of wealth.
I love when people say have the government pay for it.. hasn’t anybody ever figured out yet that the government is the taxpayer.
I have an idea let’s give them all universal basic income… Then I can use the money to make their student loans ?
I think that all professors and all School administrators salaries should somehow be connected to the salaries of the students they pop out of their perspective schools.
If these little crumb crunchers can’t pay the bills that they’ve incurred I say put them in slave labor camps at 50 cents an hour until the bills paid off ?
I always love the arguments that are “couched” (gee where have I heard that term recently) that college students didn’t understand the terms of the loans they took and/or they didn’t actually realize they would have to repay that debt someday. I seriously doubt they were that naive.
It was not clear to me fron the article whether sports spending is funded by the government, abd more importantly whether sports spending is net positive or negative for a university. (Does a university actually make money from its sport games?)
In principle, the government should not cancel student debts, but pay people who are working for society.
This could mean government sponsored internship/positions at private companies.
For example, if people vote you as a good business, the government can sponsor positions for you hire more people (even if you had been running the company as a non profit or at a loss).
You know I’m totally confused there’s some days when I read this stuff I think this must be mental illness then the next time I read some stupid article I think to myself no I think it all started somehow on the birth canal.
First off, I know that Alan M and Keith O are in my age range, and pretty sure most of the others are equally old. That means that we got our college education for cheap. I remember thinking that leaving college with $5,000 in debt was expensive, and then realizing a couple years later how really inexpensive my tuition, subsidized by California taxpayers, had been. We are all beneficiaries of an earlier generation’s largesse and now its time to consider paying it forward.
That state funding has largely disappeared, which is the primary reason tuition has gone up, not sports programs. The rise in private tuition has been allowed by the squeeze on state support. The answer to controlling tuition costs is largely in resuming increased state support.
And by the way, that athletics bloat is almost entirely from the football programs–less than two dozen actually make some type of “profit” and even then that often excludes the cost of the stadium construction. We need to stop public subsidies of professional sports arenas, which will then reduce athlete and coaching salaries, which will then reduce college coaching salaries which are outrageous.
So while relieving student debt is justified based on intergenerational equity, it shouldn’t be indiscriminate. It should means tested (we don’t need to help new MBAs on Wall Street), probably restricted for high tuition colleges to pressure them to lower their prices, and even tied to a period of public service. (Separately, I prefer that we have mandated two years of national service to increase mixing across different groups in our society, just at the draft did during WWII.)
Two of my children went to college. I helped them some and they worked all through college so I and my children have been subject to today’s costs. They took out loans and have paid them back. They didn’t buy that car, boat or take lavish vacations. Instead they paid their loans back. Should they be paid back for being responsible and paying their loans while others didn’t have to?
You guys want to get rid of College Sports? Talk about cancel culture. Sports is the one thing in society that is actually merit based. If you try to work the system for anything other than talent you only end up with a worse won lost record.
There are lots of things we could do starting with raising the age of consent for borrowing. It seems like the banks are pushing borrowing on people who have limited experience with debt. We can also reduce college debt by paying tuition for future service to the country. My cousin’s kid just graduated Medical School and his tuition was paid by the US Military. He is now obligated to be an U.S. Army doctor for a number of years. There are programs that forgive debt for public service but they have been mismanaged by the debt servicing companies forever.
Another thing we could do would be to buy up the loans and refinance them. When I was young, so many years ago, student debt was not a profit center for banks, it was a government service. We should return to that.
Years ago I think students were considered customers but today students are no longer the customers. That stopped when you needed a college degree as a checkbox to getting a job. Now they are merely the buckets on conveyor belts that are used to move the money into the universities from the student grant/loan streams. For an example There is just as much overhead cost for a black history major as there is for a math major. The cost for electricity to light the classrooms doesn’t depend on who uses them. The administration that keeps track of the progress of the student costs the same. Instructors, ditto. Are black history majors finding jobs that would have them paying back any significant portion of the costs of educating them, or will they join all the other history majors at minimum wage jobs in the burger-flipping industry?
I’m curious is anyone know how many people that work in the athletic department that makeover say $400,000 a year?
How many people work in the administrative side of the University of California that make over $500,000 a year?
Most corporations if not all corporations have shake ups every down yet to get rid of the Deadwood or the dead beach however you want to call it as the university system ever had something like that and if not why not?
Of all the chancellors within the University of California Davis how many of them has actually have real world management experience that proves them capable of running a large workforce?
We pay the president of the United States who is in charge of the largest non-profit in the world somewhere around $400,000 a year salary so why are we paying chancellors 900,000 a year or more
With all that being said I think there’s a lot of fat to cut within the UC system we have people that never actually had to hold down a real job running a large corporation called University of California.
I believe tuition could probably be cut in half with a little bit of work.