By Daniel Oliver
May 8th 2014
Student debt is a public-policy issue that will keep on giving—giving problems to the Democrats, who created it, and the opportunity of a lifetime to Republicans, if they have the wit to seize it.
The total student-loan debt is huge, an estimated $1 trillion. Average debt per borrower in 2012 was $24,800. Of the trillion dollars, about $758.5 billion is owed to the federal government. The rest is owed to private lenders.
There are three problems with the student loans, two of which receive some coverage, but one of which is never mentioned by the left-wing press—and that’s where the opportunity for Republicans lies.
The first problem is that the loans encourage students to spend years at an institution from which many of them will derive no benefit, for three reasons.
The first reason is the nature of the curriculum at too many modern universities, where there is likely to be a department of Feminist, Gender & Sexuality Studies, offering courses like Kings, Queens & Queers, or Cross-Dressing in 19th Century Literature (the latter, obviously, is a graduate course).
The second reason is that the nature of work is changing. In a recent column in the Wall Street Journal, William Galston referred to three Canadian economists whose research calls into question the proposition that a college education is the key to a young person’s future. The theory is that information technology tends to make whatever is learned in college, if not the graduates themselves, less valuable. As any parent of a 12-year-old knows, you don’t need a college education to do complex tasks on a computer.
The third reason is that some people simply cannot profit from any college experience. We have to remember that, even in the fifth year of the reign of Obama, half of all students are below average. If they go to college, they will spend their time, except during Sex Week, studying subjects and reading authors they have no particular interest in and insufficient training or sophistication to understand. Many of them would profit from learning a useful trade far more than from spending years at a college.
Only a few days ago, Josh Mandel, the treasurer of Ohio, wrote about a company that was paying sixty of its welders more than $150,000 a year, a salary that puts them in the top 10% of earners. He cited a 2012 Bureau of Labor Statistics report that found that 48% of college graduates are working at jobs that don’t require a four-year college degree. About one-third of the Millennials (people between the ages of 22 and 32) say they should have gotten a job instead of going to college. Flipping hamburgers at McDonald’s may be a great training job for a teenager, but not for a college graduate with $10,000 in student loans and a degree in Women’s Studies. Skilled blue-collar labor has to be more rewarding, financially and emotionally—even if tony liberals look down their long noses at it.
The second problem is that student loans allowed colleges to raise their costs—to feather their nests at students’ expense. College costs have risen much faster than inflation. To take just one example, in 1966, tuition at the University of Southern California was $1,200 a year, which in today’s dollars would be $8,751.59. So how much does a year’s tuition cost today? $42,162! No wonder students have become indentured servants, in hock to the federal government and other lenders till they reach their forties, at which point the lucky ones may have to co-sign their children’s student-loan papers.
From a Huffington Post survey comes this sobering comment: “During college I made an enormous mistake: I accumulated $83,786 in student loan debt, getting a Master of Music in opera performance. . . . In my current circumstances, I cannot pay $1,000 or more per month. I know that I got myself into this situation, but it distresses me that my horrible judgment during one period of my life is likely to impact my life negatively forever.”
What a great society! As banks were said to have lured unsuspecting borrowers into unaffordable housing mortgages before the 2008 crash, so the federal government, and others, have for years lured unwary students into taking out loans that don’t advance their careers. Someone ought to find out where the inventor of federally guaranteed student loans for all, Lyndon Johnson, is hiding and drag him out so he can be horsewhipped.
But it’s the third problem that Republicans ought to pay special attention to. Student loans, and all the other federal aid-to-education programs, are the irrigation for the fever swamps of the Left. The colleges and universities in this country are shills for all the leftist nostrums that afflict us—and it’s the federal government (which means taxpayers) that pays the bills and makes it possible.
The University of California at Los Angeles Higher Education Research Institute surveyed faculty members nationwide and concluded that in 2010–2011 the political breakdown of faculties was: far left—12%; liberal—50%; middle-of-the-road—25%; conservative—11%; and “far right”—0.4%. But we really didn’t need a survey to tell us that.
The Center for Responsive Politics reported in September 22, 2010, that employees at Harvard, Stanford, and Columbia Universities gave at least 75% of their collective political contributions to Democrats. And they should be allowed to go on contributing to Democrats and being as far left as they want—just not on the taxpayers’ dime.
What all this means is that firing an Exocet missile into the heart of the American higher-education establishment should qualify the trigger man for a place on Mount Rushmore.
Here’s the missile: Republicans commit, as part of their 2016 platform, to (1) canceling all student loans owed to the federal government and paying off all loans owed to private institutions and (2) eliminating all federal aid, grants, support, etc. to postsecondary educational institutions. It’s a package deal: no elimination of aid, no cancellation of debts.
Hmm. I wonder how the 38 million people with student-loan debt would vote on that issue. In 2012, 60% of Millennials voted for Obama. It doesn’t have to be that way.
You ask, how can the country possibly afford to cancel (“forgive” sounds too religious, doesn’t it?—might cause it to be overruled by the Supreme Court) a trillion dollars in debt? And how can we afford to do that now, in this time of financial distress? Isn’t that irresponsible?
Actually, it’s not—I wouldn’t have suggested it if it were.
Total federal aid to higher education (if you call courses in human sexuality and women’s studies higher education) is about $99 billion—$34 billion in grants to the students themselves, and an additional $65 billion in “Direct Loans” subsidy allowances. In addition, the federal government pumps about $40 billion into the system for research, at least $10 billion of which, and perhaps more, could be eliminated without serious consequences. (Approximately $600 million goes to Harvard University, which has an endowment now of $30 billion. About $46 million goes to Brandeis University, which reversed its decision to grant an honorary degree to Ayaan Hirsi Ali, for which behavior alone its grants should be cancelled.)
So: if total student debt is a trillion dollars, and annual federal support to higher education that can be eliminated is $109 billion, cancelling both would allow the Treasury to break even in only nine years—and that assumes that if the trillion-dollar debt were not canceled, all of it would eventually be repaid, which it obviously wouldn’t be. The default rate is about 10%.
If federal grants are eliminated, some institutions will collapse, of course, but most of them will be institutions that really aren’t providing any value to their students.
And some of the research, which has exploded in recent decades, is probably worthless. Do we really need one book a week on Shakespeare? Do we need to spend $2.19 billion a year for environmental sciences research, and another billion or two or three for research on political science, psychology, economics, sociology, business management, library science, humanities, law, and social work? The list goes on. Research that is essential will be supported by the market?corporations and rich individuals?as it has been for years.
Students for whom college makes sense will still be able to get loans?from friends, banks, perhaps companies, and the colleges themselves?as long as they can persuade the lenders (e.g., by having decent SAT scores) that they can truly profit from college.
According to the Pew Research Center, Millennials continue to view the Democratic Party more favorably than the Republican Party. But that’s changing. They’re getting older, and they are facing the reality of huge student-debt payments (as well as “membership”—compulsory, of course—in the Social Security Ponzi scheme, which will run out of money before they retire). They are waking up to what liberals have done to them.
This is the moment Republicans have been waiting for. They have a historic opportunity to free the current indentured former students from their debts and open up a brighter future for them, and to prevent another generation of young people—or two generations, or five, or seven—from wasting years at college and going into debt to do it, and then living a life of agony trying to pay off that debt.
Hey, hey, ho, ho, Aid to Ed has got to go!