MCViewPoint

Opinion from a Libertarian ViewPoint

Biden’s Student Loan Scheme Benefits the Ruling Class (Again)

Posted by M. C. on August 31, 2022

As the provost and I discussed the prospects of this new program, he smiled and said, “We hope this lottery passes. Then we can raise tuition by $3,000.”

https://mises.org/wire/bidens-student-loan-scheme-benefits-ruling-class-again

William L. Anderson

When I interviewed for a teaching job at private college in Alabama more than twenty years ago, the recently elected governor had won partly on a platform in which the state would install a lottery system that would give students a $3,000 grant for college. As the provost and I discussed the prospects of this new program, he smiled and said, “We hope this lottery passes. Then we can raise tuition by $3,000.”

(The Alabama legislature, despite being controlled at the time by members of the governor’s party, failed to pass and implement the lottery.)

In the aftermath of President Joe Biden’s announcement that the government will forgive up to $20,000 of student loan debt for qualifying borrowers, the responses are following the political ideology of the commentators. For example, columnist Tressie McMillan Cottom of the New York Times declared it a “win,” although she then demanded even more loan forgiveness.

Betsy DeVos, who was secretary of education under Donald Trump, took the opposite position, declaring the loan forgiveness to be “illegal.” Responses elsewhere ranged from comparing Biden’s loan forgiveness program to Jesus Christ dying for the sins of the world and the loan forgiveness during the year of jubilee outlined in the Hebrew scriptures to the entire program being little more than a wealth transfer to those fortunate to go to college from those who didn’t have that privilege.

College Loans Have Helped Drive Up Higher Education Costs

While government officials are implying this is a one-time thing, we know that the political system will not put this to rest. After all, the forgiveness is being applied to student loans taken out in the past, yet college students continue to take out new loans for the coming academic year—and beyond. In fact, Biden’s loan forgiveness is going to have the same effect that my interviewer hoped would be the case if Alabama implemented a state lottery: higher prices for a college education.

That higher education costs have skyrocketed is a given. As Forbes explains:

See the rest here

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