The Federalist: Why Biden’s Planned Student Loan Bailout Is Completely Unfair
Dr. John Lott has a new op-ed at The Federalist on a different type of topic than what he normally writes on.
The Federalist summary: Because we saved up and behaved responsibly, President Joe Biden will punish us. Nor is his plan fair to those who don’t go to college.
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We put five children through college (one is still attending). We saved up. We never took out any loans, as we didn’t want our kids burdened with debt. Our kids went to William & Mary, Mary Washington, Dartmouth, Johns Hopkins, and the University of Pennsylvania. So far, the total costs for these colleges have been well over $600,000.
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Last week, Biden forgave nearly $6 billion in federal student loans for 560,000 borrowers. News stories this week announced that the decision on loan forgiveness for others appears delayed until closer to the election at the end of the summer. While some debt is likely to be forgiven, Democrats will likely keep other borrowers locked in politically by continuing to freeze repayments and warning that Republicans will end that.
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Should we have just borrowed all of this money and sent our kids to public universities? If so, we could have had $600,000 to spend on all sorts of other things — nicer cars, nicer houses, or fun trips. Or it is money that we could have given our children and grandchildren when we die. We always purchased used cars that were a year old. My Ford Taurus lasted for 16 years and had more than 225,000 miles. My wife’s Pontiac Transport lasted almost as long before rust meant that it could no longer pass the state’s yearly safety check.
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Unfair to Financially Responsible
But we didn’t complain. We promised our children that if they worked hard and got into a good college, we would figure out a way to pay for them to go there. We were proud of our children’s hard work, and we thought that going to a top university was important for their success in life.
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So, because we saved up and behaved responsibly, President Joe Biden will punish us. Those who didn’t save or work 80- to -90-hour weeks, who spent their money on nice things, now get us and other taxpayers to pick up the tab for their kids’ education.
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How exactly is that fair?
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Nor is it fair to those who don’t go to college. The people who go to college generally tend to be the future wealthy in the country. Why should those who didn’t go to college and are relatively poorer end up giving large amounts of money to those who did go and are going to be wealthy?
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Making Our Country Poorer
Has anyone thought about the impact that these policies will have on people’s behavior? It tells people that they don’t need to save up to send their kids to college. That they don’t need to save up to buy their first homes. If Biden wins and enacts his programs, Americans will surely reduce their already low savings rates. That will make our country poorer.
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Biden’s rhetoric keeps on discussing preferential treatment for public universities, and could be the death knell for many private schools, which already have a hard time competing against heavily taxpayer-subsidized public universities. The Obama administration put private, for-profit colleges out of business, and a Biden administration will finish the job with many nonprofit private colleges.
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Student debt has ballooned over the last decade, but the cause is rather ironic. At the beginning of the Obama administration, the government took over student loans from banks. But the government was much less concerned than banks were about getting their money back. It just kept giving out loans, even if it looked like the student would never be able to pay it back. So now we have a situation in which the government lends out too much money to some people who went into fields that don’t pay enough.
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Biden and the Democrats are outright buying votes. Promising tens or even hundreds of thousands of dollars to young people is nothing short of bribery. And to do so, they are using my family’s money and the money of other families that made sacrifices for their children.
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Lott is the president of the Crime Prevention Research Center.
