Free college and student loan debt forgiveness has become a popular topic. This is particularly the case with several politicians in Washington. The subject was also a hot issue in this last Presidential election. People being able to attend college without incurring any debt or having decades of current student loans forgiven seems like a good idea to some people. However, free college really doesn’t solve the ultimate problem with higher education which is the cost.
The price of a college education has soared. According to Student Loan Hero, four-year public college tuition has increased 571% since the late 1980’s. Even taking inflation into consideration, the increase has been 213%. With the average college student accumulating $30,000 in debt, free college and education loan forgiveness look like a good suggestion on the surface. But the idea is severely flawed for several reasons.
The Cost of Higher Education is Clearly a Problem
I don’t think too many people will disagree that the price of a college education today can be a challenge for the people that want to attend. This is clearly apparent by the rising student loan debt problem that is now estimated to be about $1.7 trillion. This debt is now leaving the average re-payment period for a bachelor’s degree today taking just over 21.1 years to pay off.
Student loan debt keeps increasing and 69% of college students in 2019 took out student loans. Over the last two decades, the average student loan debt at graduation has increased by 86% for a Bachelor’s degree. College students are increasingly borrowing money to fund a college education.
Considering the rising price of a college education compared to the wages people are earning in comparison to the cost of living is the real problem. Although increased wages for many American’s was the nightly news up until the pandemic, this was never really the entire story. The steady climb in the cost of healthcare and housing costs has often left those rising wages lagging when the balance sheet is totaled.
The real issue with college is not that it costs money to attend but that it has now resulted in decades of debt for a growing number of people. Forgiving student loans or making college “free” is not going to create an education system that truly comes at no cost. Furthermore, it is not going to lower the price and it will likely do just the opposite with the tax-payer having to pick up the cost in the end.
Free and Forgiven Comes at a Cost
Although the word free can be defined as having no obligation, this isn’t the case with the price of a college education. Universities are going to need to charge something and the bill will need to be paid by someone. This is ultimately going to be the taxpayer.
Forgiving student loans is not going to relieve the payment of anything but the individual borrower. What some politicians fail to realize or do not want to admit is forgiving student loan debt is only going to put the debt on the taxpayer. The truth is the federal government would still have to repay banks, the government itself, and the financial institutions that loaned out the money for a college education. Who do you think is going to repay this money?
Student loan forgiveness will need to be repaid by taxes in one form or another. Think about all the taxes and wasted money in Washington. Why would wiping out the student debt problem be any different? Politicians just throw money at problems but the problem is the money is not theirs so it is easy for them to do.
Tax Is Not the Answer for Free College
With the student loan crisis at $1.6 trillion and the average price of college tuition for a public 4-year university at about $10,000 per year, this would amount to trillions of dollars that would need to be accounted for in order to pay for it all. Even just providing free community college would still produce a large bill that would need to be paid for by the taxpayer.
To cover the costs of free college or student loan forgiveness it would require all taxpayers to likely provide something. Taxing only the wealthy or certain income brackets only would not be enough. The result would be everyone paying something. Some people in Washington might massage the numbers to show how no one is paying specifically for free college but indeed taxes would be required to cover it all.
The problem with taxes covering free college and loan forgiveness is even the people that never went to college or took out a loan would be paying for it all. This places a larger tax bill on not only all people in America but also the people that are likely struggling financially.
An increase in taxes to forgive student loans and provide free college is likely going to benefit affluent families, people that chose a more expensive education over less costly options, and those that pursue education beyond just a bachelor’s degree. The reason for this is many times families from poverty must work and do not have time for school. Moreover, some of these individuals are likely never given the opportunity for a good education to support higher learning.
Forgiving student loans is going to mostly favor a lot of graduate students who account for a large portion of the student loans. You need to think even further considering doctors and lawyers that go to school for several years. Not all these people earn a substantial living but many of them certainly have more opportunities available to them compared to a lot of other people.
Something to consider when knowing there will be a tax burden for providing student loan forgiveness and free college is why provide a free path for only those that decide to go to college? There are also countless people that take years to learn a trade in order to obtain the skills they need to work in a good career without the need for college. Many of these people have low earnings for several years or expenses before they get to their potential.
If a free path is set for everyone to get a college education, the problem is not everyone wants to go to college. Furthermore, not everyone should go to college and they might not even have the opportunity even if it is free.
Free College and Student Debt Forgiveness is Flawed
It’s not just an issue with how to pay for all the free education. Yes, all American’s either going to college or not having to pay for it all is clearly an issue. However, free college and wiping away student loan debt do have a lot of other problems.
College Might Actually Get More Expensive
Most of the research I have read on free education does not seem to point out what seems to me as probably one of the most obvious problems. This is the issue with the primary problem of higher education and really the cost. It’s not that people have student loans or they need to pay for college but the high price to attend.
Think for just a minute about how fast the price of college tuition has gone up which is about 8% per year or the cost doubles about every 9 years. There is some research that has connected the rising cost of college tuition to the available amount of student financial aid. The more free money or available funds to borrow often results in the price of college tuition rising. As the government has increased the amount of money a student can borrow for an education, the universities regularly turn around and charge more for tuition.
Supply and demand also have an impact on the cost of a college education. With student loan forgiveness and free college available more people will unquestionably enroll. Thus, there will be a requirement for more faculty and college campus growth.
More free money for college is only going to make it more expensive because the government will oversee running it with tax dollars. It should not be too difficult for anyone to see that wasteful spending in Washington has been a real issue for quite some time. No matter what side of the political aisle you are on it is no secret that the government overspends for a lot of its budget. Free college and loan forgiveness will not be any different.
Loan Forgiveness Will Reward Everyone
The issue with a blanket student debt forgiveness plan is it rewards everyone. This includes people that might have made bad decisions. Decisions that might have included a more expensive school when less costly options were available. Someone that chose to study an area without much room for opportunity would also be rewarded.
It’s not just the financial reward that everyone would get from student loan forgiveness but also important lessons would not be learned. How does forgiving student loans teach the dangers of accumulating debt? A blanket of loan forgiveness will be a terrible lesson for the dangers of debt which has been an issue for a lot of America.
Free College Does Not Hold People Accountable
If you are someone that attended public school as a kid and went on to college, you know there is a big difference. This is particularly the case if you accumulate student debt for college and need to pay your own way through. There is undoubtedly a motivation with education when there is a cost to it. The term a lot of people would commonly use is “you have skin in the game” when it comes to paying college tuition.
Free college tuition may make it available to more people. Yet, a free college education could also hinder the motivation for a lot of students to take it seriously and finish. According to the National Center for Education Statistics, about 40% of the students that enroll in college currently do not graduate. This is even when many of these students leave college with student loan debt prior to graduation. What is the dropout rate of a college education going to be when it is free?
Although several proponents of free college would argue the probability of a successful graduation rate with free higher education, I would argue the likelihood of a much higher dropout rate with free tuition.
Frequently when something is given to someone for free, they tend to take it for granted. Why would a college education be anything different?
What Is The Value Of College When It is Free?
Supply and demand have already in some ways saturated the job market. Many positions state a minimum requirement of at least a bachelor’s degree because it has become quite common. Many 4-year college degrees have even become somewhat unmarketable compared to decades ago when just having a college education of any kind almost guaranteed upward mobility. This is no longer the case today.
If free college does give more people the opportunity for advanced education and there is a high success rate, the job market becomes flooded with college degree holders even worse than it is today. The big question that comes to mind is how do you define free college and its value?
If a person decides to attend college with the cost of their education covered, can they study anything they want? What about a young adult that wants to major in basket weaving or something that is not very marketable for job prospects after graduation? Does free college only include areas that are defined by someone such as the government?
The real question with free college is would it really be free? Would it give the person that decided to go to college the freedom to study what they want? This likely does not make sense from a financial investment standpoint. It really might only make sense when free college is offered for the so-called jobs in America that we are supposedly outsourcing all the time because there is a shortage of educated American’s to fill those positions.
If people are told what they can study in college, is this truly free?
What About The Student Loans I Paid?
One of the most common arguments I hear with free college and student loan forgiveness is from people that went to college already. These folks either borrowed money and paid it back already or worked their way through school to pay for it. There is a real resentment and many times anger from the people that had to pay for college when they hear of the loan forgiveness and free college ideas.
Understandably previous college students want to know how they will get their fair share in the free education market. These are the people that already paid for their education and are done with paying back the burden of student loans. Debt that might have taken decades to pay off.
High amounts of student loan debt regularly delays people’s lives. This could include taking longer to buy a home, get married, or have children. Student loans can be life-altering and the previous generations of college students that had to work hard and pay their college debts are not generally happy when it comes to the idea of free education.
As someone that spent many years paying student loans, I am one of those that wants to know how free college can be equal for everyone? If the idea is put into place, where is my free education and loan forgiveness?
What is a better solution to the high cost of a college education and the student loan crisis?
No one seems to have all the answers and I don’t claim to have them either. But there are conversations that do need to be started on the subject and debates that should be made.
I would unquestionably argue that the college system in America is broken. Much of what is being taught in Universities today is outdated. A lot of it is the same curriculum that it has been for some time now. But it’s not just the education itself that is failed. It is not even the foremost problem with college today.
The real issue with a college education today is the cost. The truth is the money people earn has not kept pace with the rising cost of higher education. This is really the driving force behind the student loan problem. College costs need to be brought under control.
The cost of a college education doesn’t need to be free. It just needs to be affordable. Student loan debt itself isn’t even really that bad. The problem with college debt today is not that people accumulate it but the amount it is accrued.
The education system itself also needs to stop failing young adults. More kids need to be educated on options for a less expensive path to education and the option of a different path that can be successful without college. This might include a trade school or opening a business of their own.
Kids are still often being told from a young age that a college education is the only path to success and a happy life. The result with the cost of a college education today is many times decades of student loan debt and never reaching the earning potential a college education should provide.
Any loan forgiveness or free college needs to be equal for everyone. The problem is I am not sure how this would be accomplished with everyone coming from different parts of life with varying values. Who gets to determine what the value of free education is? This question likely doesn’t matter because most people know who will be paying for it all and this is the taxpayer.
Final Word
Setting political views aside I know there are suggestions in Washington for forgiving a certain dollar amount of student loans or all of it. Also, the idea of free college that some politicians are proposing is just for community college. All of this sounds good and especially if you are getting ready to go off to a University. However, there are some real dangers to a free college education or student debt forgiveness.
A free education is never free. Ultimately someone must pay for it all. No matter what side of the political aisle you are on there is really no argument that politicians waste money. They all do with their own agendas and giving everyone a free college education or paying for a portion of it won’t be any different.
The result of free college and student debt forgiveness will be even higher education costs that will eventually need to be picked up by every single person that pays taxes. Paying for an education is not the fundamental problem. The cost of higher education doesn’t need to be free. It just needs to be a price people can afford without decades of a financial burden.
An affordable college education allows people to have skin in the game. It shows a person made a sacrifice to get an education but not a lifelong one that may not be able to be recovered from. Paying something for college also puts a value on it. One that people would take more seriously and that price provides some motivation to graduate.
Free college and student loan forgiveness sound good but they are both terrible ideas. Finding an answer to make a college education more affordable for everyone is a better solution.
