There Is No Such Thing as Student Loan ‘Cancellation’
This week, Elizabeth Warren unveiled a plan to “cancel” billions of dollars worth of student loans without involving Congress. She believes a legal loophole may allow her to erase the debt with the stroke of her pen, no questions asked.
The most obvious problem with exploiting this loophole is that it probably doesn’t actually exist. The next most obvious problem is that this would represent a seismic expansion of executive power, which would be ironic given all of the concern among Democrats that Trump wants to be a dictator.
But there are two even larger and more fundamental issues with any plan to cancel student loans. First, there is no such thing as “canceling” student loans. What various Democratic candidates have proposed are plans to transfer, not cancel, the outstanding debt of millions of college graduates. They wish to remove the burden of the loans from the people who agreed to the loans and have received their degrees in exchange for it, and place that burden on the shoulders of people who did not agree to the loan and did not receive anything in exchange for it. Student debt will still be paid; we would just be taking the funds from someone else’s pocket.
Even under Warren’s magic wand proposal, the debt will still certainly land at someone’s doorstep and become their problem. If you think the federal government would ever in a million years choose, out of the kindness of its heart, to simply eat a $1.5 trillion dollar loss without recouping the funds elsewhere, I’ve got an invisible unicorn to sell you. The taxpayers will be footing the bill, one way or another. Of that much we can be sure.
The more feasible plans would supposedly see the loans transferred from college graduates to the dreaded “ultra rich.” I’ve got another unicorn to sell if you think the government is going to recover that full amount solely from billionaire CEOs. Anyone who has been paying attention knows that an initiative of this scope and size will inevitably involve tax hikes on everyone, no matter what they tell us now. But even putting that aside, rich people are still people, last I checked. We still have to deal, ethically, with the fact that we’d be requiring private citizens to pay back loans they didn’t take out, for a product they didn’t purchase. Defend that morally dubious model all you want, but don’t call it cancellation or forgiveness. Nothing at all is being forgiven. We are just forcing someone else to do the atoning. (Read more from “There Is No Such Thing as Student Loan ‘Cancellation’” HERE)
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