Stoneage Ramblings

By John R. Stone

The announcement by President Joe Biden that some would be getting $10,000 or $20,000 forgiveness of their government college loans hit me a couple of different ways.

One, as person who paid his college loans, and paid the costs of sending two children to college, it is hard not to think about how different life would be today if some of that money had been invested and grown over the past 20 to 30 years.

 The argument on the other side of the case is that many young people have this huge drag on their lives, and thus are not contributing the economy as a whole, because they are swamped with college loan debt.

I’m a big believer in the importance of education. I do not think, however, everyone needs a college degree, there are many great technical schools, apprentice program and more. I do think most people should get some kind of post high school education, hopefully in some field of their choosing.

The college loan program has helped millions of people, including me. But the ease of borrowing for college has also made many young people not very good consumers.

An argument can also be made that many colleges and universities didn’t employ discipline to their own budgets because of the flow of government money into their institutions through college tuition loans.

There seems to be two schools of thought on the president’s action. Supporters say “it’s about time.” Critics express concern about adding to inflation and the moral hazard of people who get deeply in debt expecting to have that burden lifted by the government. And there is concern, too, that the $300 to $500 billion this will cost will be paid for by our children and grandchildren, people who also will have their own educations to finance.

My main question is how did anybody agree to loan so much to so many people? Loaning to a person who will have a tough time paying it back should be a crime. Seeing stories about people with $50,000 to $100,000 in college debt who are not entering professions where that debt is manageable doesn’t make sense.

My second question is how much this inflated the costs of going to college. College costs seem to have risen faster than inflation for many years, some say as much as four times the rate of inflation in the rest of the economy.

I went to Moorhead State, now Minnesota State University, Moorhead, back in the mid 60s. Room and board and tuition totaled about $1,800 per year. Of course one had to buy books. Moorhead State says that, prior to student aid, costs at that school are now $21,566 for a Minnesota resident, of which $8,838 would be tuition and $12,278 would be for books and on-campus room and board. From that number the average student usually qualifies for about $5,000 in student aid. That still leaves nearly $17,000 to be paid.

When I went to college I could cover most of my costs by working on and off campus even though on-campus work paid $1 an hour. I don’t see how a person could work enough to put a big dent in $18,000 even at today’s wages.

Education is important and having an educated citizenry is vital to having a democracy where we elect people to run our various levels of government. People need to be smart to vote and smart to serve.

And this country needs educated people to create the businesses and jobs of tomorrow in a variety of fields from medicine to technology.

It seems to me that the partial loan forgiveness is a temporary solution to the larger problem that will just continue trapping young people in debt. A more complete solution needs to be found, one that gives the nation the educated people it needs, one that doesn’t saddle students with unpayable debt, and one that encourages colleges and universities be more cost conscious to put the brakes on college cost inflation.