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. 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 near perfectly-chaotic, managing to infuriate almost 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 language — 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, for whom 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, both 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, which both monopolized lending, and effectively 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 we should simply burn this system to the ground.
Here’s how we fix the student debt crisis in three easy steps:
Make repayment of all student loan debt (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.
With skin in the game, no one is lending money to people incapable of paying it back. This will naturally force greater scrutiny of degree choice, which will in turn . The amount of debt the average young person will be able to assume will therefore immediately plummet, and colleges across the country will be forced to lower their cost of admission. A lot of lower-tier colleges will probably also close. We love this.
In a system of constrained lending, higher education will become more immediately elusive for students interested in low-value degrees (most of the liberal arts, including especially all of the really crazy grievance studies shit that will probably cease to exist). But the average student debt burden will evaporate. Probably many more people will 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. Because the average desk job doesn’t require a “higher” education. Very few jobs do.
There is a strategy out of this crisis. That we aren’t pursuing the strategy likely has a lot to do with a cultural obsession with college, and the political left’s obsession in particular, which, in a godless age, has obviously supplanted the Church. For many, it doesn’t matter where a kid goes to school, or what they study, it only matters that they go — somewhere — and “study” — anything. But this thinking has crippled an entire generation. And I’m over it!
$300 billion dollars for higher education? I don’t even care about the money. It would be worth five times that much to burn the whole thing down. Fortunately, we can do it for free.
Hand me a match.
You got me fired up with this one!
Totally agree with you on the solution. The college system needs a huge bucket of cold water splashed over its head. There are so many people you talk to and their whole job seems to be explaining to you a list of things that aren’t their responsibility. Whole areas of study exist that aren’t real in any genuine sense because they don’t make any falsifiable claims and they don’t provide any sort of risk mitigation strategies that make anyone’s lives better and seem to be sustained mostly because people half fake statistics or make up nonsensical jargon languages and sort of just Wiley Coyote over the void. If schools were doing a good job of teaching kids about compound interest and job markets they’d nope right out of the whole conversation.
I roofed houses, worked in sawmills, and drilling rigs to pay for school so I wouldn’t have debt. Always thought it was kind of an absurd thing to pretend that someone talking in a room, splitting costs across hundreds of kids, generates the same economic value as those jobs. I would trip pipe for twelve hours a day, in the desert, during electrical storms, with no lunch or break but maybe a piece of venison, then in the Fall have to talk to the Vice President of Student Stupendousness who was making six figures so he could perform his one job of making sure I was really interested in organic chemistry. There was just this whole fairy tale apparatus built around a guy doing math on a whiteboard and then me doing math on a piece of paper and showing it to that guy that just kind of boiled my blood. Whenever you bring up something simple like “What if we actually tracked actions to their consequences and figured out how good of a job you’re doing at providing value to the society?” people look at you like you have three heads.
I know everyone likes to pick on Jason Stanley (who I strangely think is probably a pretty kind person) but like… am I supposed to pretend he’s really a professor? There are so many people like that where their expertise is really asking me to do a favor and pretend I don’t have any sense. If I were in some kind of mortal contest where I needed someone with me who was really competent and on top of things would I ever say “And I’ll tell you one thing, thank God that Jason Stanley was there” under any circumstances? The thing that should make someone an expert worthy of public trust is that they can show up somewhere and start talking and everyone goes “fuck, that dude is right! I understand the world better now!” or they do something that other people can’t do but increasingly it seems to be something like “Well, he filled out form 11-J, that’s the form for expert status. Expertise isn’t really about being able to understand things well enough to say what will happen in the future it’s really about existing in a state of Eleventy-Jayness and making sure you never get into a situation where you might be tested.”
It reminds me of that McDojo account where fake Karate experts meet guys who actually know how to fight.
God this shit fires me up.
Making student debt repayment tax deductible is not a good idea. It will not put downward pressure on tuition at all, which is the root cause of the student debt crisis to begin with. The best approach in my opinion, is to make the schools the lender, and have them perform the credit review on the perspective student. If the schools make a bad loan, they take the hit. It will eliminate degrees that have no value in the market place as well as knock out 40% of the students that have no business going to college in the first place. It will also reduce the number of schools we have, that are kept afloat by - - student loans.