ith their Debate Road Show now underway, Democrats are proposing grand plans—mostly for the good. But numbers are numbers, and as much as candidates want to avoid them, in the end someone’s going to have to foot the bill. Let’s deal with two different plans centered on the cost of college.
The numbers say that that a college graduate, on average, will make $1.2 million more in a lifetime than will a counterpart with only a high school education. As such, the cost of college seems worth it—for those lucky enough to gather the required tuition, room and board, and related expenses. But man—that cost! Even adjusting for inflation, college tuition is almost two-and-a-half times more expensive than it was 30 years ago.
Thus, two current proposals are almost irresistible to millions of young voters: first, that existing student loans can be forgiven; and second, that we can create a program underwriting “free college” from this point forward.
But again, these proposals beg that question: who pays?
Loan forgiveness. In some fashion, this already exists. For example, in some places if you’re a young teacher willing to work in classrooms where few others are willing to tread…your school loans might be erased. But such programs are still rare.
The reality for 45 million graduates is different; their diplomas came with an average debt load of $33,000. Wouldn’t it be great to just have that evaporate? Bernie Sanders thinks so. His ambitious plan would just wash away everybody's cumulative debt in one swipe—a sum that could reach as much as $2.2 trillion. He says a “tax on Wall Street” would pay for it over ten years.
However, it seems likely that no level of passion from Sanders would ever overcome the army of lobbyists in Congress protecting their Wall Street paymasters. And at that point, you know what would happen--the funding would come by simply adding to the national debt. Which means (if you believe in real world economics) that someone is going to have to finance this. In other words, us.
In addition to the cost of such forgiveness, several other real-world objections were raised in a recent opinion piece in the Wall Street Journal. For example, should taxpayers who didn’t go to college have to help finance the debt of those who did? How about graduates who worked their way through four years without incurring debt—no credit for that? And what about someone who willingly absorbed more than a quarter million dollars of tuition and costs to get through four years at Harvard? Should that person receive that huge mountain of “forgiveness”…while someone attending your local community college gets crumbs? Prepare for the onslaught of “fairness” questions, because this is messy business.
One of my favorite truisms is that arguments about the past are all about blame. And since they exist in the past tense, debt forgiveness inevitably incorporates claims as to who's at fault. But arguments about the future are all about choices. And that's where the second part of this issue comes in.
“Free college”. The idea of “free college” is intriguing--and certainly not impossible. In fact, eight nations in Europe already offer it--and in some cases, nearly free tuition to Americans! Plans being floated here in the U.S. stipulate that anyone wanting to enroll in a public university system or vocational school gets in. Case closed. No stressful applications, inspirational essays or SAT scores required. In most cases, what’s being considered is simply free tuition—other costs, like food and a place to sleep, would not be covered unless household income fell below a certain threshold.
So here, of course, cynics and conservatives shout, “too expensive!” (These same people apparently were out sailing and unavailable for comment when the odious Trump tax cut for the rich passed.) But no matter--consider ways in which the public could be spared a good part of the expense.
The endowment of the Texas university system is in excess of $30 billion—second nationally only to Harvard. That means with a normal rate of return, Texas theorhretically could accommodate enrolling another 300,000 students a year without ever touching the nest egg. (Yes, they’d need to pay for more buildings and teachers to get this done.) A dozen other states have more than $2 billion sitting in their university coffers. So, state systems themselves could pay a good share of the freight. But even under the plans of Sanders and Elizabeth Warren, the federal government (i.e., taxpayers) winds up footing half the bill with matching federal funds.
Nevertheless, this plan needs, and deserves, a lot of consideration. While our federal government wastes tens of billions of dollars on unnecessary tax cuts for corporations and individuals…while it siphons countless fortunes anywhere the lobbyists want them to go…it’s hard to imagine a more useful investment in our future than educating young people. It is exactly the kind of shoot-for-the-moon dream that is not only beneficial--it's quintessentially American.
And who knows? When all is said and done, we might even have enough left over so that elementary school teachers don’t need to pay for their students’ crayons.
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