2016 Presidential Election: Student Debt
Forgiving student debt and increasing education subsidies are popular ideas on the campaign trail this year.
But what would happen if the United States actually forgave student debt?
Would the loans just vanish into thin air?
Would tuition prices start falling at last?
Would universities stop spending so much on bureaucrats and climbing walls?
Watch and tell us what you think.
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How Do We Break the Cycle of Higher Tuition and More Debt? (Video): You know the story; perhaps you’ve lived it: Promising kid goes to college and works hard and accumulates a lot of student debt. She graduates. She looks for a job and can’t find one. She now can’t pay off her debt. This all-too-common scenario is unacceptable, and something very specific is to blame.
Guide to Election Season (program): 2016 is heating up, which is why we’re cutting through the noise to bring you the most important issues of the election- drug policy, terrorism, immigration, and more. Join Professor Don Boudreaux in this On Demand Program designed to give you the information you need this election season:
Is Student Loan Forgiveness a Good Idea? (video): At a time when more people are defaulting on their student loans than ever, Prof. Daniel Lin explores the surprising pros and cons of just forgiving all the debt.
5 Things to Ask Yourself Before You Go to Grad School (article): Sage advice from the Learn Liberty team on how to make the right investments and avoid getting into more debt than you need to.
>> One of the major issues facing recent grads this election year, is-
>> Student debt.
>> A lot of students are just choking with it.
>> Increase to college tuition.
>> Debt free tuition.
>> Less government subsidy.
>> College is too expensive.
>> Americans currently hold 1.3 trillion dollars in student debt.
Even more than they hold on credit card debt. Former students are delaying major life decisions like marriage and buying a home, because of their student debt payments. Part-time and summer jobs can no longer covere the cost of college as they once did. And prospective students are scared of the debt burden that accompanies today’s college education.
As the presidential candidates hit the campaign trail, everyone wants to know where they stand on this issue. Some candidates argue for an expansion of programs that forgive part or all of people student debt. Help you pay down your student debt
>> And make public colleges free or heavily subsidized.
>> We’re going to have to have colleges and universities tuition-free.
>> Others argue that reforms are needed to the traditional college education model itself. No debt and free college sounds appealing right? Well so does getting a free car or free house. But nothing is free and forgiving debt doesn’t make it disappear.
It simply transfers the cost from the students to the taxpayers. In fact, this policy will make the problem even worse. By further weakening the incentives and the competition that put downward pressure on college costs. Programs that forgive debt would also encourage students to take out even more loans.
Because, hey, if you don’t have to pay it back, why not load up? Debt forgiveness programs are projected to cost hundreds of billions of dollars. A better approach is one that actually addresses the underlying problems. Now causing the high cost of college and skyrocketing student debt. It unleashes the power of the market.
Which keeps costs low for other goods and services that we use on a daily basis. It’s basically Econ 101. Which, by the way, is a class you should take. This approach means more competition to the traditional four year high cost college model. This could include two year trade schools, online college and community colleges.
It also means reducing government subsidies that drive up the cost of college. And are often used on luxury amenities or on new administrative positions. For example, the University of Akron boasts a 56 foot climbing wall. The University of South Florida has its own disc golf course and Temple University has an indoor driving range.
And even bigger problem is the expansion of university bureaucrats who offer no educational value. More educational options and less government interference would drive down overall costs. And thereby reduce the debt that students carry into adulthood. Which approach to reducing college cost do you think is better? Transferring the cost of college to all taxpayers or introducing more competition to higher education.