Why The GOP Should Tackle Student Debt
It's time for the populist right to steal the trademark policy of the bourgeois left — with a few important caveats, of course.
It’s the last taboo. You can find hordes of self-identified conservatives who are all in on the LGBT agenda. You’ll find plenty who see no problem with government-sanctioned infanticide, so long as we frame it in the language of rights. On any number of economic issues the GOP is eager to reform. But heaven forbid the Republicans talk about student debt.
The fundamental reason for this is fairly obvious, if you’re at least a little bit of a cynic: the vast majority of people with student debt aren’t going to vote for Republicans one way or the other, so there’s no political benefit and plenty of political risk. But there are also legitimate arguments against action, beyond the reflexive fiscal timidity of the dead consensus.
The most substantial, and the most common, is that any form of debt relief would benefit the upper classes at the expense of the lower. The main premise is easily demonstrated: the bulk of student debt is held by people with high incomes. It wouldn’t be fair, we are told, to bail these people out at the expense of those who chose not to go to college, or who managed to pay their debt off already. This populist posturing is usually accompanied by the familiar odes to personal responsibility and reminders that the debt-laden chose this path. They made their beds, now they have to sleep in them.
But who really made the bed? The most glaring oversight of those who scorn debt forgiveness as unwelcome meddling in private affairs is that the current crisis, by and large, is the product of government policy. Are we just supposed to ignore the fact that the United States government has been aggressively selling this bill of goods to its young citizens for decades? College is the path to a better life, and Uncle Sam will help you along the way. (For what it’s worth, neither one of these claims has turned out to be true.) Virtually every cultural, social, and political force at play has been pressuring every 17-year-old toward college at every juncture. Let’s not pretend the government is blameless just because they used carrots over sticks.
What’s more, the reckless programs by which the state coaxed students into college simultaneously enabled the price gouging and institutional bloat that now define the American education system. Years of refusal either to change their own practices or to rein in the abuses of the schools has created a disastrous feedback loop in which the costs rise every year at higher and higher rates, while the return on investment vanishes as the ranks of degree-holders swell to unsustainable magnitudes. None of this is caused by individual choice alone, and none of it can be solved by individual choice alone.
When decades of bad policy have left a society teetering on the brink of collapse, the conservative—and even the market-conscious—thing to do is not to just pull back and say “Well I really don’t think the government ought to get involved here.”
These may seem like panicked overstatements. Respectable people left and right go to great lengths every time the subject comes up to convince us that there isn’t a real crisis here—to say nothing of one that threatens societal collapse. Recourse is taken first to the income line: the people who hold the most debt tend to make enough money to pay it off in the long term. It is often framed as a direct comparison; the best-informed interlocutors will point to an Obama-era report estimating that a worker with a bachelor’s degree tends to make about $1 million more over the course of a career than a high-school-graduate counterpart.
It is a point of no small importance that this conclusion is based on retrospective data. The trends that underlie it can hardly be expected to hold fast when the government-created college bubble bursts. The labor market a graduate enters in 2020 is not remotely the labor market graduates entered even in 1990, and it is downright idiotic to base our current policies on decades-old conditions. Prospects for the future look far more grim than school-lending optimists either realize or admit.
Even still, why the apocalyptic language? How bad is it, really, that debt is skyrocketing without any parallel trends in post-graduation incomes? If worse comes to worst then hard-luck degree-holders can enroll in income-based repayment plans, contributing a percentage of their paychecks to the outstanding balance for 25 years, at which point any remainder is forgiven. And that’s only for the real tough cases; most borrowers will manage to get by with a little austerity—many will even be paid off by the time they hit 35.
The truth is, every critic is right. We’re looking at a massive government bailout for the college-educated over a more or less minor inconvenience. It’s not fair to those who resisted the pressures toward college and chose lower-cost—often now higher-reward—paths. It’s certainly not fair to those who borrowed and already paid their debts (though this line of argument tends to forget that pesky fact of changing market conditions—i.e., that outstanding borrowers do not have nearly the same prospects to earn and repay that previous generations did, precisely because the universal availability of loans has since saturated the market).
But it’s not about what’s fair. It’s not about whether our young professionals deserve to have their loans cancelled, even in part. It’s about the long-term, big-picture implications for the United States when our young professionals are saddled with substantial debt.
How is this generation’s behavior altered by their debt burdens? The most obvious impact, and one that should especially concern conservatives, is on fertility. Fertility is cratering; we all know that. But there is an indefensible tendency on the right to attribute this to cultural shifts, to the dominance of liberalism and the social breakdown of the family. The assumption is not borne out by reality. Evidence shows overwhelmingly that Americans are foregoing parenthood primarily because of material and economic conditions, not because of shifts in culture, tectonic though they may be.
There are a number of ways this hardship can (and must) be alleviated at lower socioeconomic strata, but for college graduates the obvious route is to tackle student debt—even graduates with relatively high incomes are far less likely to have kids with tens of thousands of dollars of debt hanging over their heads. And that category is set to include more of the population than ever before; as of 2019, over 66 percent of high school graduates aged 16-24 were enrolled in college.
Maybe we wind up in the best case scenario, and they’re all paid off by 35. But 35 is just too late for the vast majority of a generation to settle down—to feel financially secure, to start to look for a house, to start to think about children. The common objection, again, is one of choice. Even with substantial debt, these people could start families if they wanted to. This is true—it would just require a little scrimping. But it’s not the point. Yes, theoretically, the debt-burdened could start families. But they won’t. They aren’t. We need to do away with the hypotheticals and start to reckon with the social costs of a body of student debt that totals 5% of our GDP.
There is a great deal of speculation that, if Joe Biden wins the 2020 election, he will take executive action on student debt. Chuck Schumer has requested that he cancel up to $50,000 via executive order. Critics on the right have pointed out that this is an unfair policy, that it will overwhelmingly benefit those who have borrowed heavily and now have decent economic prospects if historical trends hold. But just because it is an unfair policy does not inherently make it a bad policy. There are better ways to go about it, to be sure—certainly more modest ones. But at the end of the day, I will take an unfair subsidy to big-dollar borrowers over a long-term collapse in the American population and economy.
The real risk, and the place no conservative can follow, is to make this permanent policy. The long-term solution is to take an axe to the government-university cartel. The vast majority of government funding to colleges—including federal loans—must be cut, and mustn’t be replaced with anything. Take the carrot away, and let the masses of young people drawn to college by Uncle Sam’s siren song filter back into productive work, reinvigorating their communities in the process. Take the government money from the schools, and watch the bloat shrivel.
That is the only way to ensure that the next generation of Americans don’t find themselves in this situation to begin with. But if something drastic is not done now to change their parents‘ behavior, there won’t be much of a generation to speak of.