pirate wires #76 // breaking down biden's 300 billion dollar gift to the church of higher education, how we got here, and how to end the student debt crisis — forever
A fast and dirty bonus edition of Pirate Wires on account of the United States is giving 300 billion dollars to sociopathic college administrators responsible for one of the greatest debt crises in American history, and I have thoughts. Chief among them: I would like to suggest, on the other hand, actually ending the debt crisis. By dismantling the system of debt. Call me crazy (just keep calling).
A gift for the gifted. Yesterday, President Biden waved his magic wand, and “erased” $10,000 of federal student loan debt for every borrower making less than $125,000 a year. At least, this is what he promised (it’s still not clear how this is legal). The gesture was almost perfectly-chaotic, managing to infuriate everyone, and solve nothing. In the first place, so paltry a sum as $10,000 awarded to the already-economically advantaged was not even close to enough according to the “give me shit” left, which believes all things — but especially college, which is regarded in sacred, pseudo-religious terms — should be free. The “small” sum was also (surprise) racist. On the other end of the national discourse were politicians from both parties actually committed to the working class, Americans who never went to college, and Americans who already paid off their debt at great personal expense. In this corner, Biden’s debt forgiveness was immediately clocked as deeply, scandalously unfair. Incredibly, actually solving the crisis was not a topic of discussion. My suggestion is we solve the crisis.
Today, about 45 million Americans are slowly chipping away at $1.75 trillion in national student loan debt, almost all of which is held by the federal government. To place the worsening nature of the crisis into some immediate historical perspective, the debt has risen close to 92% since 2009 — dramatically outpacing inflation. Now, with an exorbitant cost-of-living, millions of young people are moving to cities they can’t afford, to find jobs they don’t want, to pay off debt they can’t manage, while deferring parenthood into their thirties and beyond. It is an unmitigated disaster. How did this happen?
Millennials were raised on stories from their Boomer parents who ‘worked their way through college,’ graduated debt-free, and bought a four-bedroom house in a nice neighborhood, an hour from the city, with a down payment scrounged together from change they found between couch cushions. Things, they told their children, while obviously different, were not fundamentally different. This was laughably untrue.
Late last century, as the trend toward college normalized into cultural expectation, the number of Americans with degrees increased. Graduation was no longer much of a feather in your cap, it only meant you weren’t illiterate. The credential — simply having graduated from somewhere — became table stakes for every desk job in the country, reinforcing the trend toward college while reducing the value of a degree. The cost of that degree, on the other hand, skyrocketed, and not only because of demand. Much of the debt crisis is an invention of our government (surprise), which both monopolized lending, and banned discharging student debt in bankruptcy (!!!).
There are many problems with Biden’s decision to cancel a little bit of debt, for a treat. But the only problem worth focusing on is the fact that it changes nothing. A year from now, insurmountable student debt will be inked back onto the federal ledger for a new generation of young people pressured into a system that benefits exactly one class of people: college bureaucrats. My opinion is the college bureaucrats have received enough, and done enough, and they should simply learn to code.
Here’s how we fix the student debt crisis in three easy steps:
Make repayment of all student loans (assumed to the current year only) 100% tax deductible, and retroactively — at least in some part — for people who already paid.
Remove all legal barriers to discharging student loan debt in bankruptcy.
Abolish the institution of federal student loans.
The government doesn’t have to pay a cent. All the government has to do is allow people to redirect their tax dollars to their own education. By allowing some retroactive deduction, we also keep this fair, and if a borrower is so underwater tax deductions can’t save them, guess what? We just legalized bankruptcy. For lenders, a class that will now exclude federal bureaucrats insulated from risk, the threat of bankruptcy also forces sanity back into the market. This is how we save the next generation.
With skin in the game, no one is lending money to people incapable of paying it back, and the class of Americans incapable of paying back hundreds of thousands of dollars for a piece of paper that doesn’t improve their job prospects will include pretty much everyone. Once the irrational lending dries up, the amount of debt the average young person is capable of assuming will plummet, and colleges across the country will be forced to slash costs or make themselves comfortable with matriculating classes of ten or twenty very wealthy idiots.
Many lower-tier colleges, incapable of competing in an environment of greater consumer scrutiny (will you help me get a job yes / no?), will probably close. We love this. Many young people will simply opt out of college. This is more great news.
With declining college enrollment, employers will have to drop the unofficial liberal arts requirement, and the cultural pressure to attend college will deteriorate. But if that doesn’t do the trick? Screw it, you people love laws, just make it illegal to ask a candidate where, or even if, they went to school. Are you interested in helping young people, or are you interested in propping up a bloated jobs program for doctoral candidates in esoteric fields of study, and academic bureaucrats?
There is a way out of this crisis. That we aren’t pursuing the strategy likely has a lot to do with a cultural obsession with college, which, in a godless age, has clearly supplanted the church. But our faith in higher education has crippled an entire generation. It’s time to burn this system down.
Hand me a match.