Hundreds of thousands of college students graduated last month, and for many, their biggest concern is how to pay off their college debt. Americans currently hold $1.3 trillion in student debt—even more than they hold in credit card debt—and its preventing them from making investments, buying homes, and successfully meeting their financial obligations.
That’s a huge drag on the economy, and it’s heartbreaking to see people in such an impossible financial dilemma just because they wanted a good education.
Naturally, how the candidates plan to fix this national dilemma is top of mind for debtors, prospective debtors, and their parents.
Some candidates are arguing for an expansion of programs that forgive parts or all of student debt and make college free or heavily subsidized by the government. After all, they argue, students shouldn’t have to give up education to avoid debt. But others say that such an approach just treats the symptoms of a deeper problem: an outdated and broken college system itself.
George Mason University Professor Donald Boudreaux explains the competing approaches in the new Learn Liberty video below. While free college may sound appealing, he points out that this proposal would simply transfer the cost from the students to the taxpayers.
A better approach would be to address the underlying incentives and lack of competition that inflate college costs by introducing market forces. This means an emphasis on trade schools, online colleges, and community colleges, as well as reducing subsidies that pay for costly amenities and administrators.