Skip to comments.The Student Loan Forgiveness Mess: The Program Is The Problem
Posted on 10/11/2018 7:27:42 AM PDT by SeekAndFind
It's dispiriting, for anyone who cares about the sheer capacity of government to implement policy, to learn that the Department of Education has failed to process 99% of requests for student loan forgiveness submitted by some 1.2 million borrowers who believe they qualify for a discount program aimed at helping those engaged in public service jobs.
The report from the Government Accountability Office, based on its review of the Obama-era program, does not do much to instill more trust in government. But that's not the most important problem with the Public Service Loan Forgiveness Program.
The core idea that government can know, by job description, what's a public service and what isn't is itself flawed. Its fundamental problem: the assumption that only government or non-profit employment provides a public service. And it's part of a larger syndrome that's infecting private investment and even philanthropy: The idea that select causes have an inherent moral superiority that can be known in advance.
Does Gov't Serve All?
As it regards, first, the loan forgiveness program, there is no doubt that work for government, whether in a public school or a federal agency, helps to build the foundation of a healthy society. But it's narrow-minded to believe that only work for "a government organization, agency or entity at any level or a nonprofit tax exempt organization" inherently serves the public.
It is fundamentally wrong to discount the probability that working in the private sector does the same. The rejoinder that government work implies forgoing earnings hardly holds up when one looks at the sacrifices of entrepreneurs who simply must be seen as the lifeblood of future prosperity.
(Excerpt) Read more at investors.com ...
Highly questionable, at best!
The entire premise is a mess. The value proposition that is offered is:
a. Put yourself in hoc for a large percentage of future earnings in return for loans that are necessary to pay for education costs grossly inflated by the loan programs we have created to pay for them, or
b. Forego a college education and any chance at professional standing. You could still do well as an entrepreneur or taking up a trade or craft, but you will be relegated forever to the basket of deplorables.
Like all other government programs, as WFB famously put it, when you subsidize something you get more of it like illegitimacy and cheese.
Agree - at best.
A vague promise to forgive seems to be all it takes to turn a Millennial into a Socialist.
Approximately 85% of the outstanding student loan balances (roughly $1.4T at present) are federally guaranteed. When the borrower is forgiven (or otherwise defaults), the lender simply applies to the Department of Education and is paid. It is the quintessential zero sum game, either the borrower pays or the taxpayer pays.
Philosophically I am with you. Full disclosure, I paid off my student loans decades ago.
But I am resigned to the fact that sooner or later, student loan forgiveness WILL happen. There are just too many people with too much debt for whom that is proving a major impingement on their lifestyle. Sooner or later they will demand to be relieved of that debt, and politicians will be tripping over each other to get it done. I can see the lobbyists for the automobile and real estate industries getting in line to push it through.
Though it is not in any way conservative I believe Trump should step up to the plate here and diffuse the ticking time bomb. If not it will put Democrats back in charge, and then we’ve got REAL trouble.
I’ve been around long enough to realize that politics ALWAYS trumps bad economics.
So... please tell me again why it is that I and mine should be billed to pay for YOUR education....
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