Tis the season for giving — or, for some legislators, a good time to demand that the government force taxpayers to give others a large gift.
A few weeks ago, Rep. Alexandria Ocasio-Cortez took to the house floor to issue another plea for the federal government to cancel nearly $1.7 trillion in student-loan debt. That is, she is demanding that taxpayers who didn’t go to college, or who didn’t take on large loans to go to college, pay off the often massive loans of those who did.
AOC argues that the student-loan system is ridiculous because at age 32 she still owes $17,000. But then she unwittingly puts her finger on the crux of the student-debt problem:
“It’s teenagers signing up for what is often hundreds of thousands of dollars of debt…” she said. “We give 17-year-olds the ability to sign on and sign up for $100,000 worth of debt, and we think that’s responsible policy.”
Of course it’s not responsible policy. Of course borrowing 100,000 smackers before you’re even old enough to vote is not sound decision-making. Of course it is a problem created and long enabled by lax federal student-borrowing policies.
A 2015 study by the National Bureau of Economic Research found the increase in student loan availability correlates to nearly all of the increases in college tuition since 1987.
It’s not complicated: The more you allow young people to borrow, the more colleges jack up their costs — because colleges have known the borrowers will borrow more. To compete for students — and to “justify” their ever-climbing tuitions — colleges have been on massive spending sprees the last 20 years, borrowing billions to build five-star dorm rooms and other lavish amenities.
A massive increase in non-academic administrators — people who do not teach or conduct research, but who earn fat salaries nonetheless — also has exploded the cost of running a college, according to the Huffington Post.
How to fund all these spiking costs? Raise tuitions. A report by myelearningworld.com finds that in the last 50 years college tuition costs have risen five times the inflation rate. If tuitions had kept pace with inflation, today’s students at private and public universities would be paying $10,000 or $20,000 a year – half of what they are today.
The entire tuition-funding scheme has been a sweet racket for the higher- education industrial complex for a long time. But more and more young people (and their parents) are seeing through it.
Instead of borrowing tens of thousands of dollars to get a college degree, more high school grads are choosing good-paying, no-debt opportunities in the trades. And with a record number of open jobs and a dearth of willing job candidates, more companies are hiring young people without college degrees.
This decreasing demand has forced colleges to suddenly begin cutting their “sticker prices,” according to Forbes. So if more young people are becoming more sensible about taking on massive debt, would it be too much to ask our lawmakers to come to their senses, too? Their well-meaning but wrong-headed student-lending policies have helped to create a massive $1.7 trillion debt bubble.
Demanding that the rest of us pay off the college debts that millions of others so willingly took on is not just ridiculous, it’s patently unfair.
Case in point: Alexandria Ocasio-Cortez makes $174,000 a year. Rather than force taxpayers to pay off her $17,000 college loan, maybe she should trade in her Tesla for a used Hyundai.
Tom Purcell is an author and humor columnist for the Pittsburgh Tribune-Review. Email him at Tom@Tom Purcell.com.