A recent proposal to forgive all student loan debt has over 675,000 online signatures, arguing,
“With the stroke of the President’s pen, millions of Americans would suddenly have hundreds, or in some cases, thousands of extra dollars in their pockets each and every month with which to spend on ailing sectors of the economy.”
Support for this act is widespread across the country. It is supported by both presidential candidates (not surprising, since neither is willing to lose the votes of all college students). It sounds like a great idea! We can stimulate the economy, help out these poor college students who have been taken advantage of, and stop the recession! But consider again the impact a legislation such as this would actually have…
The Student Loan Forgiveness Act itself is based on a fallacy. As a college student myself, I can testify to the considerable presence this fallacy has in the minds of many students. This fallacy is:
“If I go to college, I will get a good job.”
To begin, one must recognize that 1 in 2 college students are jobless or underemployed. Some argue that this is a result of colleges failing to adequately prepare students. Others argue that jobs now require higher degrees. While both of these may or may not be true, it should also be considered that full-time student enrollment increased 45% from 2000-2009. This enormous increase in enrollment will obviously increase competition for jobs after graduation.
Because so many graduates don’t have jobs, there must be a pressing problem in our country – therefore we need to forgive all debt? Not necessarily. College may help prepare someone for life, but it is not a magic wand. There will always be many college students who end up being unemployed. It will have nothing to do with the unfairness of the labor market. It will be because companies doesn’t tolerate laziness. Missing work is different than skipping class, because one has immediate consequences.
College is an investment, which means it carries with it a certain amount of risk. A good job is not guaranteed if you graduate college. It depends on your communication skills, work ethic, critical thinking, reliability, and of course your major and your grades. If you go to college, you are accepting the financial risk involved when you make decisions.
Forgiving loan debt will only exacerbate the problem. By the offering of forgiveness, these people with student loan debt will be encouraged to teach their children to be risky with their money, because the government will help them out if it gets too hard to pay it back. Not to mention that this bill would add another $1 trillion to the deficit, increasing inflation and forcing tuition prices to rise even faster.
It’s simply passing the problem down to future generations. How can we possibly ask for fiscal responsibility in our government when we beg them to cover all of our financial problems?
The solution is not magically wiping away the consequences of our decisions. It is holding us accountable so that we teach our children that life isn’t easy. We’ll teach them to be smart when they choose whether or not to go to college, where to go, what to major in, and what not to do when they get there. It’ll take hard work to succeed – but since when is that unusual?