CARMEL –  Wha, wha, wha! The sounds from Millennials are deafening. The chants of baristas with philosophy degrees and anthropologists with whatever those degrees are called can be heard across this great land, “Pay off my student loans, wha, wha, wha!”

Your cries have been heard by our Comforter-in-Chief, President Joe Biden and his merry band of “let’s give away cash” socialists in the United States Congress.  

President Biden and Congressional leadership would love to find some legal way to cancel the student loan debt of nearly 45 million Americans. With a prospective ugly election fate at the mid-term elections staring them in the face, what better way for Democrats to get many in their base who are disenchanted with $5 a gallon gasoline and 9.5% inflation back on board the Biden choo choo?

Two years ago in this publication, I warned about the exploding student debt problem and the many challenges that it presents. I identified runaway college tuitions with no market controls, easy money loan access to students who either shouldn’t be borrowing money to pursue a five-year college major in navel lint picking and the protection against bankruptcy afforded to student loan lending organizations by the generosity and opportunism of Congress as the major causes of the problem. I noted that if something wasn’t done soon to deal with the growing problem, there would be serious societal and economic problems.  

I will admit that I didn’t expect students to quit borrowing money or to be any wiser with their choice of majors. I also did not expect colleges to eliminate the bureaucratic bloating and financial mismanagement that has served to drive up tuition costs. I seriously never anticipated Congress to take the one step necessary to end the problem for all time, eliminating bankruptcy protection from the student lenders. This is all just a nice way of saying that I expected the problem to continue and get worse and it has!

I work as a financial consultant, and I would like to tell you some of the stories that I have heard in the course of my day-to-day duties. There is the young married couple, both employed, who signed up for college classes, took out maximum loans for tuition and room and board and then canceled their classes and pocketed the refund to use as a down payment on a starter home.  

There were the parents of a daughter who had just earned a degree in paleontology who told me that she had just borrowed the maximum to pay for a master’s degree in the same subject and living expenses in Africa where she had to pay to dig in the dirt. There was also an engineering graduate who borrowed money all four years to pay for spring break each year. These are just a few examples of how the outstanding student loan debt grew to $1.6 trillion.

The truth is that for every low paid teacher struggling under the burden of student debt, there are several attorneys, doctors, engineers and businesspeople making very nice incomes who are managing the student loan debt just fine. Let’s not forget that for every American who has student debt, there are at least seven who have none.

I realize that the typical Democratic Socialist believes that money does grow on trees, or at least in a printing press, and that it should be Christmas every day of the year. But there are plenty of good reasons why President Biden or Congress should not cancel student debt.  Here are a few:

Executive orders should not be the way to get things done when Congress won’t pass legislation. It is the ultimate governmental shortcut and nothing but a Constitutional end run.

The benefits of student loan forgiveness are highly regressive. The top 20% of households hold $3 in loans for every $1 held by the bottom 20%. Those with graduate degrees make more money as a rule and much debt is used to finance great paying advanced degrees. You might think that poor children borrow more to pay for college.  Rich families tend to borrow more than poor families. They like to send their kids to colleges where their classmates are named Biff, Buffy and Chatsworth Osborne III. Those schools cost a lot more than IVTC, Ball State or Maurice’s School of Cosmetology.

Spending government money to bail out those with college debt will not dramatically improve the economy. During the COVID-19 pandemic citizens with only a high school degree had an unemployment rate nearly double the unemployment rate of those with a college degree.  

Student debt forgiveness at this time is merely a one-trick pony that is immensely unfair to all of those who have previously paid off their loan debt and for the generations to come who will immediately take on student debt as soon as existing debt is canceled.  

I asked one of my daughters this morning what she would think if Biden canceled all student debt after she worked so hard for the last decade to pay hers off. She dug deep into her barrister vocabulary book and responded, “It stinks!” No, paying off student loan debt for only those that have debt now makes as much sense as putting a tourniquet on a head wound. It would only serve to perversely incentivize students to borrow even more in the hopes that some future president struggling in the polls would come to their financial rescue.

Our tax code clearly discriminates against classes of people in a manner that I believe is grossly unfair, if not unconstitutional. What’s next after student loan forgiveness? Forgiving those with home improvement loans? Forgiving mortgage indebtedness? Writing off credit card debt? You start singling out groups of people for extraordinary financial treatment and you just don’t know where it stops.

I’ve already told you a few stories about some of my clients. Here are a couple of happy ones. One of my 21-year-old clients decided to go to welding school instead of college. He graduated after one year and started with a salary of $112,000. Another client dropped out of a major state university where he was studying engineering. He now works as a plumber for a salary of over $100,000 and loves it. There are alternatives to college for our young people.

I have already stated what I believe is needed to correct the long-term problem with student loans. Education inflation must be contained and to do that the free flow of money coming from student loans must be controlled by sensible lending which will drive educational institutions to focus on degrees that offer the economic ability to repay loans. Sensible lending will come when government guarantees end and students are allowed the protection of our bankruptcy laws.

If society wants to incentivize certain lower paying degrees such as social work, education or ancient Zoroastrianism, then it can create programs to gradually cancel debt for years of service.

Just as our society offers equal opportunity for success but not equal outcomes, educational and occupational choices should only offer equal opportunity but not government-backed insurance against making a bad choice. 

Dunn is the former Howard County Republican chairman.