President Biden this week announced some college loan forgiveness for certain individuals holding federal student loans. There are a bunch of details, but I’m not going to get into those here. You can read about them on a thousand different sites in detail. I want to talk about whether forgiving student loans is something we agree with or don’t agree with.
There seem to be two camps. On one side, most holding current student loan debt, but not all, think this is a great thing. Those who have this burden now have less and can move on with their careers and build their lives with a little less burden.
On the other side, you have folks who went to college, incurred debt, went to work, and paid that debt off. The government didn’t help them, but that was what they signed up for, and they made it work. They might have had this debt decades ago when attending college was much less expensive, or maybe they went got only a few years ago but worked like crazy to ensure they paid it off.
The fact is, student loan debt for all those who have it can be crushing. The reason most people decide to take on that burden is that they believe getting that college education will lead them down a path to a better life. The ROI on a university education is still pretty good in the U.S.
I’m in both camps.
I went to university and had parents who couldn’t help me. I left with student loan debt, and my wife and I worked very hard to pay off that debt. We laugh about how we would come home to our first apartment and go sit in the bedroom because we had no furniture but a bed. We couldn’t afford furniture because my monthly loan payment took up our extra money.
Yeah, yeah, and I forgot to tell you I walked uphill, both ways, to work…cry me a river, right?
When I started in HR, we never spoke about the burden of student debt for those we hired. It wasn’t as big a portion of the monthly expenses of new grads, so while they had the debt, they could still handle it. Now, it’s a major topic of conversation when HR talks about talent attraction and retention. It’s a major topic of conversation when we talk about benefits and incentives. The amount of student debt has become outrageous.
This question of forgiving student debt is very difficult.
There’s a piece of this that is about individual accountability. I took as few loans as I could while I was in college because I knew I had to pay them back. I worked multiple jobs all year while going to school. I chose a school that was inexpensive because I knew I had to pay for it. I didn’t go on Spring Breaks. I had a beater of a car. I bartered meals for services I could do. I was accountable for the debt I took on.
As a person who hires people now, I frequently will ask new college grads how they paid for their education. What part did you pay for through work? What part did you have to borrow? What part did your family cover? What about scholarships? The effort you put into paying for your burden speaks a lot about how you will be as an employee. I’m not saying that if you are fortunate to have parents who were able to help you pay for school, you can’t be great. You can. I rarely meet someone who worked their way through school on their own and doesn’t have a great work ethic.
What does this have to do with student loan forgiveness?
There’s no difference in having someone pay your debt if it’s not you paying for your debt. It’s not teaching you to value the commitment you made. You committed to a loan that had to be paid back. Mom paid it off. Your company paid it off. The government paid it off. You got from under your debt through no work of your own. You will be more likely, moving forward, to take on debt believing somehow, in the future, someone else will bail you out.
The problem with the thinking above is it’s still really f*cking hard to start life out in a hole, and too many people in our society are starting out in a hole. Some were hard-working enough to make it out of one hole and get into college, only to find themselves in the next hole. And often, that hole is just too deep to escape from.
I believe every single kid in our country who puts in the work in school should have access to a great college education, and that education should not bankrupt their future. At the same time, I’m not sure just giving them a get-out-of-college debt Monopoly card is the answer. Our country has a crisis when it comes to federal, state, and local government hiring. What if students could do some kind of government job corps that gave them a fair salary and experience, and for that, each year, they had a portion of their student debt forgiven? Or come up with some other sort of plan that taught with any debt you purposely decide to take on, there is accountability to pay it back.
These are your tax dollars.
Let’s face it our government is historically bad at spending our tax dollars. If you were to go out and ask the US population, do you want your “personal” tax dollars spent on paying off someone else’s student loan, you would be lucky to get a 50/50 split. Going to college and incurring college debt is still a privilege in our world.
What about paying off the car loan a single mom has that she had to take on so she could go to work to pay her rent and put food on the table for her kid? Should we pay that off as well? It’s a slippery slope when we start paying off individual obligations people make. Great, you want to be an Artic Beetle History major, and now you can’t find a job. That’s okay. Let us pay off that awful decision you made with my hard-earned tax dollars.
The real solution isn’t paying off student debt. It’s a political stunt!
The real solution is taxing colleges and universities that have become empire builders under their tax-exempt status. We, the U.S. population, allow higher ed to continue to build world-class structures and increase prices to the point that is ridiculous. Dorm rooms have become five-star hotels, okay, 3-star, but definitely Courtyard by Marriott level accommodations! My dorm room was more akin to a prison cell.
Why has this happened?
Universities are in the business of keeping kids in college as long as possible. The longer you stay, the more tuition and fees they will get. No longer can a normal kid make it out in four years. God forbid you to change majors and move schools. You will definitely be on the five to six-year plan. Higher education in the U.S. has become the biggest racket outside of health insurance in the entire country!
The crazy part about this is it seems like no one in politics is talking about this fact. We care that it costs too much, but we never do anything to make higher ed run like a real business.
Student loan forgiveness isn’t about helping students. It’s about votes. If we really wanted to help students, the government would go after our “non-profit” colleges and universities and create a system where all students could go and afford a proper education for a respectable cost. Like Taylor Swift wrote, paying $10K in student loan forgiveness is like putting a bandaid on a bullet hole. We aren’t solving the problem, and we are partially addressing a symptom and then acting like we cured cancer. In the long run, my fear is this behavior just will make the problem worse.
Not sure where I land on this whole issue. However, I will agree with your point about accountability. I earned scholarships and had help from my parents. However, I ultimately worked and paid for 100% of my final two years of college (while living at home rent-free, thanks to my parents) and graduated with $0 debt. I was more proud of that fact than I was of my 4.0 GPA. Then again, in the early 90’s, a full load of classes ran me less than $1,000 / semester! Alternately, my 19yo son graduated H.S. in 2021 and enlisted in the Navy. He will serve at least 6 years, during which he can also get an education, continue his career, go into officer training, or be discharged and benefit from the G.I. bill. All while earning a salary and being housed and fed! HE made that choice based on his own cost-benefit analysis, and he is maturing so rapidly in the process!
We are on the same page on accountability – you took accountability to do the hard stuff. Live at home when you would have preferred to live on your own as a young adult. Work while going to school, etc.
I want to hire you because of it!
I’m in a unique situation. In 1981, my parents paid for my education. I was lucky. I didn’t have to take on debt. I worked every summer for my spending money.
My husband had a scholarship for his first undergrad degree. Full ride, tuition and books. That was great. It was for 4 years, but he changed his major and didn’t complete in 4 years, so had to take a loan for his last year. We paid it off.
In 2008, my husband was laid off from Marriott. He loved technology, didn’t know what he was going to do the next step of his career and knew he didn’t want to be in hospitality. So he went back to school to get a second undergrad degree in technology. I did contract recruiter work while he was in school full time and he worked part time to help with our expenses (more money in contracting). In order to make ends meet, we had to take student loans. He didn’t qualify for scholarships or grants since we made too much money. So the cost was all on us.
We are benefiting from this loan forgiveness because we still owe on his loans. We have been paying faithfully, every month. But this will make things a little easier for us by having this forgiven. So, plus.
But I don’t think that the government should be forgiving debt that individuals took on their own. No one forced anyone to take a loan. We signed the paperwork, fully knowing we would have to pay it back and we were fulfilling our obligation. This whole thing is a political stunt, happening right before the mid-term elections, to try to drive votes.
So, yes, I’m happy my husband’s debt is being forgiven (we owe much less than $10k), but I’m not happy the taxpayers are having to pay for it.