Student Loan Debt Is A Debt Owed

Student Loan Debt Is A Debt Owed

MAY 31, 2022

by Dannie McIntire

President Biden said in a recent press conference that he is considering canceling some amount of student loan debt. Both Republican and Democrat lawmakers have expressed their concern about his potential plan to cancel student loan debt.

The Cambridge Dictionary defines a student loan as: “an agreement by which a student at a college, university, or another school of learning,  borrows money from a bank to pay for their education and then pays the money back after they finish studying and start working”. Now that’s a pretty easy definition to understand.

In my opinion, canceling any amount of “legitimate” student loan debt is a bad policy for the following reasons;

First and foremost, quite simply, it was a “personal loan” taken out by the borrower, the borrower signed for the loan, and their signature acknowledged their responsibility as the signee to repay the loan under set agreed to guidelines. Simple financial theory – you borrow money – you are required to pay it back! 

Second, canceling any amount of legitimate student loan debt is unfair to the majority of college graduates who attended college using student loans and have either paid off their student loan(s) or who have diligently been paying back their student loans once out of school. If I were in either category, my first question would be do I get a refund of what I have paid off to date? How far back will the refund process go? 

Yea, right, don’t hold your breath if you’re waiting to hear if President Biden’s “cancelation plan” would be retroactive for those who have either paid off or have been diligently repaying their student loan. You will more likely receive a free forehead stamp from the Biden Administration that reads, “Stupidly Been Paying My Debts”. 

Third, canceling student debt is unfair to taxpayers themselves, who will have to absorb the “canceled debt” to be paid off with their tax dollars. Approximately 42% of Americans ages 25 and over have a college of some type, however, that means 58% of taxpayers will have their tax dollars go to retire student debt while they themselves never attended college. Does that sound fair to you? Not to Me!

Additionally, taxpayers who in the past accepted their financial obligations and paid off their own student loan debt, will now find themselves responsible for paying off the “canceled student loan debt” of others. .  Does that sound fair to you? Not to Me!

Fifth, our country is in the midst of an extreme inflationary period, many economists on both sides of the political spectrum, are warning that canceling student loan debt will further increase inflationary pressures. Maya MacGuineas, president of the Committee for a Responsible Federal Budget (CRFB), is warning that “even partial debt cancellation would be costly, regressive, and inflationary. Forgiving $10,000 per person of debt would cost as much as universal pre-K”.   

Sixth, let’s honestly look at any potential plan to cancel student debt for exactly what it is, an attempt by the progressives on the extreme far left of the Democratic Party, to nudge the Unites States further towards their belief that “the government should take care of you from cradle to the grave”. It’s also a good way to buy future votes by making the student loan debtor feel indebted to the Democratic Party. 

Seventh, the main argument for forgiving student loan debt seems to basically be it would allow the borrower to restart their life free of this debt.

Well, heck, who of us wouldn’t like someone else to pay off our private debt. Using that argument, the government should forgive other debts such as mortgages, automotive loans, other personal loans, credit card debt, the list goes on and on. If you can’t understand this is illogical thinking, welcome to socialism.  

Please note at the beginning of this article that I specifically said “legitimate student debt”. Unfortunately, some student loans have been approved to attend schooling which later was proven to be a “sham” institution. These students were victimized by the institution, and sometimes in conjunction with the student loan originator, this type of student loan situation when exposed, should have the loan debt canceled.  

Higher education in our country is not a right, perhaps it should be, but that is for another argument. 

I raised three children, sending two through four years of college, the 3^rd for a year before she decided to go in another direction. All my children were expected to work during the summers of their schooling, working at times while going to school, helping pay the cost of their postsecondary education, which enabled them to graduate debt free. 

Was it easy, no, but we lived within our means, we did it, but more importantly, my children did it? 

I’m proud to say that my daughter who had decided to ‘pause” her education, now works for a company that reimburses her for continuing her higher education, and she will soon graduate with a Bachelor Of Science degree, and with no student debt. Being a single mom, was it easy for her to go back to school, no, but she took advantage of her available recourses and she did it.  

Life is not fair, our kids shouldn’t be raised expecting it to be fair, but we can help prepare our children for the future by teaching them from an early age that if they learn to accept responsibility for themselves, including financial responsibility, life can be a lot fairer. 

I love the following quip from Shaquille O’Neal, “My kids are older now, and they’re kinda upset with me”, Shaq offered, “They’re not really upset, but they don’t understand, ”’Cause I tell them all the time….We Ain’t rich….I’m rich”.

Teach your children, that if you incur a debt, it’s your responsibility to pay it off!

FOOTNOTE:  This article was posted by the City-County Observer without bias or editing.