Debt Babies

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).

-Solana

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:  

1. 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.

2. Remove all legal barriers to discharging student loan debt in bankruptcy.

3. 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.

-SOLANA