Student Loans

A quick glance at a chart of student loan debt helps explain why this will certainly be a topic of political campaigns and political discussions. One chart at the National Center for Education Statistics shows a startling increase in student loan debt. One report estimates that the average college graduate will be responsible for repaying an average of $33,000. That amounted has tripled in just 20 years.

The increase is due to many factors, but let me mention two important ones. Government involvement in the student loan program has created an atmosphere of easy credit. Students (and their parents) are taking on more debt than they should. A second factor is related to the first: rising tuition costs. More students going to college using more debt to finance college make it easy for colleges to continue to raise tuition. Tuition is rising faster than medical costs, food costs, housing costs, or any other item on a family’s budget.

It is easy to see, therefore, why student loan debt will be the next political football. Already we have the president working to expand student loan forgiveness with the current “Pay-As-You-Earn” program. Students who qualify need only pay 10 percent of their discretionary income for a maximum of 20 years. Some critics have run the numbers and found that it is possible that some students (with high debt and low paying jobs) would not even pay off part of their student loan debt. Their payments wouldn’t even cover the interest on their student loans due during those 20 years.

To put it bluntly, American taxpayers are already paying off the student loans of some students. If this trend continues, it is likely we taxpayers will be paying off other student loans in the future. Is that fair? Students voluntarily entered into these loans. No one forced them. Many of the American taxpayers who will be forced to pay off these loans did not go to college. Is it fair that they should have to pay off student loans?

Soon we will be hearing about the student loan debt crisis. These are some questions that should be added to the debate.

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