Much attention is being paid to the debate over why student loans should or should not be forgiven. Who should be responsible for the financial burden of this whole problem, because they are not easy to get rid of. Someone You have to pay for them. President Biden’s campaign was clear on the issue, as the president himself was at the beginning of his term. After taking office, Biden said during a CNN town hall “I promise you, I guarantee you that we are going to get free community college across the board in the next few years.”
This promise has not yet been fulfilled, and it may not be really important in the first place as several states already offer free access to community colleges and tuition-free colleges exist. But debt is being forgiven Of the day Curse everywhere, now who is going to choose a free community college when repaying a loan for a four year institution may soon be a thing of the past? We seem to have moved away from “free” tuition to almost complete debt forgiveness, and for good reason. People will sensitively want to attend the best, most expensive colleges they can find.
Pie-in-the-sky plans for a tuition-free college seem to be flawed – and most notably, according to an analysis by Georgetown University’s Center on Education and the Workforce. Their report dissected Hillary Clinton’s free-college plan and found negatives beyond positives, and the same thing happened when Biden presented his free-college proposal. Concerns range from enrollment in public institutions (closing of small liberal art colleges) to deepening socio-economic divisions, to the promotion of degree inflation.
This comes to the fore when the student loan repayment break (implemented by the Trump administration as part of the COVID-19 relief effort) ignites considerations for the complete cancellation of the loan. And given that repayment extensions have been granted recurrent extensions by the Biden administration (so far, six times), a permanent break seems commendable.
On top of that and beyond, since the Biden administration’s approval rating is urgently needed and polls show that democratic and millennial voters are in favor of student loan waivers, it’s no surprise. Attracting media attention Being given this topic again.
There is an inherent interest in this millennium debate as this generation has the largest number of student borrowers. And Democrats have a vested interest in Millennium because they not only make up the population with the highest working age, but will soon surpass the number of baby boomers as the largest voting bloc. Not surprisingly, Senator Bernie Sanders and Senator Elizabeth Warren are not putting any pressure on the Biden administration to take student loans on the shoulders of society as a way to retain party power.
Debt forgiveness will wipe out more than student loans
Colleges and universities have more than their share of funding schemes and there are various public interest donors And today’s scholarships are far-reaching – from weird to wide (with location or connection to Asparagus) branded (provided by choice of Taco Bell or Dell). Scholarships related to collegiate sports and military service have only expanded over time, and, according to Sportico, the U.S. military is introducing a new proposal to provide scholarships for college athletes in exchange for military service. Additional options for career-specific or college-specific tuition support have also been developed, and opportunities for talent-based or need-based support for other identity and associations have been developed as well as programming for minority groups.
And for low-income branded students, the ability to join a public institution free of charge or take out lucrative income-based loan repayment terms is already available, according to a report by the Manhattan Institute.
Previous options are also being offered by federal and state programs for student loan waivers, especially for those pursuing careers in public service positions. In the field of public service, Barack and Michelle Obama, in collaboration with Airbnb founder Brian Chesky, launched Voyager Scholarships this month for those planning to do public service postgraduate work. As mentioned in Bloomberg, the Obama-Chesky $ 100 million scholarship is intended to “help 100 students in their first year with expansion plans” and is being offered to students entering their junior year at a recognized U.S. university and “demonstrate a financial need.” This scholarship would seem unnecessary if the cancellation of the loan was a serious consideration for Democrats.
The market is already making a difference
The big concerns about the rise of the college bill have certainly created a call for greater support. And while some of these programs may add fuel to the fire, we should ask what happens to these programs if the loans can only be canceled. And what could be the motivation for students to discover, apply, work or provide financial support?
Funding for higher education results in a variety of components (financial aid advisors, college savings consultants, progress officers, etc.) and funding streams (from both public and private sector organizations). Student loans have attracted payments ranging from celebrity influencers to community service advocates to crowdfunding campaigns. Earlier this month, graduates of the Otis College of Art and Design in Los Angeles learned that their loan would be repaid by Snap co-founder Evan Spiegel and his wife, Cora founder Miranda Kerr.
In addition to these creative contributions, students are taking matters into their own hands by exploring alternative ways to save money. For example, students are now fast-tracking their premium degrees through low-cost online summer / winter courses at community colleges, or taking advantage of commuter status and benefiting from living at home. Other options include applying for work-study programming or even for full-time employee status, which raises the possibility of tuition waivers. Perhaps most intriguing is the growing interest in providing funding or even degree programs from the corporate sector.
Tuition reimbursement programs are gaining popularity among industry leaders and will likely influence others to follow suit. Companies are now doing the same for college costs (more because of government intervention), as companies took out healthcare costs due to government intervention (with the 1942 wage cap which resulted in firms offering healthcare coverage as additional compensation).
Closing Thoughts
If the government provides taxpayer-funded student loan relief, it will not only be a retreat policy to discourage non-degree holders (or those who have repaid their loans), it will dramatically disrupt the higher education system. Slightly offset rising costs. In fact, operating costs are likely to increase as debt cancellation or subsidy programs may attract higher enrollment, and higher enrollment is not a guarantee of a higher success rate or degree. The trend towards higher education admissions has been on the rise in the US, but so has the dropout rate, which will undoubtedly be worse if students are restricted or barred.
Thus, before all Americans become holders of ivory tower bills, they should consider further for the various spillover costs involved. As Thomas Sowell puts it, “there is no solution, there is only trade-off.”
Kimberly Josephson
Dr. Kimberly Josephson is an Associate Professor of Business at Lebanon Valley College and an Associate Research Fellow with the Consumer Choice Center. He taught courses on global sustainability, international marketing and the diversity of the workplace; And his research and op-ed has appeared in various outlets.
He holds a doctorate in global studies and commerce and a master’s degree in international policy from La Trobe University, a master’s degree in political science from Temple University and a bachelor’s degree in business administration with a minor in political science from Bloomberg University.