You’ve probably heard about Elizabeth Warren’s proposed plan to cancel existing student debt, give incoming students the chance at a free college education, and fund it all with an “Ultra-Millionaire Tax” (a 2% annual tax on families with more than $50 million in wealth).
You might also have seen the viral editorial by Philip Klein at the Washington Examiner, where he claims that “Elizabeth Warren’s plan to cancel student loan debt would be a slap in the face to all those who struggled to pay off their loans.”
Well. As it turns out, there are plenty of us who would be more than happy to see someone else’s student loans forgiven, even if we struggled to pay off our own. On Twitter, the responses to Klein’s highly ratioed tweet include “Plans to regulate food would be a slap in the face to all those who died of salmonella” and “The thing about making things better is that it is done so that more people no longer suffer. This is a good thing, my good dude.”
Klein’s editorial also argues that “Those who were more responsible will feel justifiably enraged at the idea that those who may have been more profligate will now get a bailout from the government,” which is equally false.
Not the part where people might feel enraged—I mean, some of them might—but the part where debt-ridden graduates and incoming students will just now receive a bailout from the government.
Because, as Joel Mathis at The Week reminds us, the government has been funding college education for a long time.
In fact, part of our current student debt crisis has to do with the government reducing the amount of money it previously contributed to colleges and universities:
Today’s rising student debt is largely a result of policy choices. The short version of the story is that student debt is rising because college tuition is rising — and college tuition is rising, in large part, because state legislatures across the country have slowly been abandoning their commitment to fund public colleges and universities.
The Great Recession is one of the villains of this story; it prompted legislatures to cut their funding commitments to higher education, and for the most part, those cuts were never restored. According to
one analysis
, state funding for public colleges and universities in 2018 was $7 billion below its 2008 levels — and that is after adjusting for inflation. One way public four-year institutions have stayed in business is by raising tuition by an average of 36 percent during that decade. It is no coincidence that
student debt in the United States quadrupled
, from $345 billion to nearly $1.4 trillion, between 2004 and 2017.
Today’s young students aren’t less responsible than their predecessors. They’re just getting far less help.
Elizabeth Warren isn’t the only presidential candidate who’s working on a plan to reduce the cost of college and forgive student loans. MarketWatch has a list outlining each Democratic presidential candidate’s higher education policy platform, and every single candidate is currently campaigning on the idea of college affordability—plus, many have made statements that suggest they want to forgive as much student debt as possible.
So if you’re feeling a little preemptively slapped in the face at the idea that the government might help other people spend less on the cost of college, remember that the government used to provide more help in the past. This new push towards making college more affordable is more like a shift back towards where we used to be, the same way that Alexandria Ocasio-Cortez’s proposed tax plan—the one that restructures the marginal income tax rates so that the richest Americans pay up to 70 percent—is actually an attempt to get us back to the tax brackets we had in the 1950s and 1960s.
These proposed economic changes might not make you feel any better about the taxes you paid this year, or all that money you put towards your student loans, but (as economists might remind us) those are sunk costs. Now it’s time to think about the future.