BIDEN’S DEBT TRANSFER SOLUTION

They Benefit, You Pay

“A rage…for an abolition of debts…or for any other improper or wicked project.”  - James Madison, Federalist #10

(Culled from an excellent article in Epoch Times by Rob Natelson)

Most of us find a way to settle our own debts.  As responsible Americans, it’s what we have to do.  Perhaps we’ve been a bit crazy with shopping and gotten ourselves in trouble.  As adults, it’s our job to pay it off and, more importantly, learn from the experience.

We also look to Congress to control spending.  It’s their job to decide how to spend our tax money, based, presumably, on the needs of their constituents.  However, we have a serious problem now, where the President thinks he has the right to control spending. 

Other People’s Debts

People sometimes do pay other people’s debts, on a voluntary basis.  Parents help kids pay for college or housing.  There are social sites where you can help strangers deal with credit card issues.  But the operative word is “voluntary.” 

And people can declare bankruptcy.  When things get really awful, you can take advantage of the bankruptcy law stated in the Constitution.  Even this isn’t harm-free.  With enough bankruptcy, lenders become more cautious about making loans, and may make the terms less favorable.  Government-backed college loans are already too favorable, subsidized (again) by taxpayers.

Biden continues to try to push student loan forgiveness, which means student debtors never have to declare bankruptcy, which would impact your credit.  Keep in mind, we are funding their very favorable college loan terms.  Cancelling loans is simply transferring a debt to other people.  And those people could have either a. paid their own college debts b. went to a less expensive college than desired to make it affordable or c. never went to college, in many cases because it was unaffordable.  Why should any of these people pay other people’s college debt?  That isn’t “equal representation under the law.”

Examine the Consequences

In their attempt to make college more affordable, flooding the market with government funds only made the tuition go up (and schools started hiring far more administrators, adding little value to the educational proposition.)

Too many politicians jump to a conclusion/solution without asking the most important question – if we do this, what happens next?  In many cases, the result is predictable.  But they like having “solutions,” even if they aren’t the right ones, or the problem isn’t theirs to fix.

A Small, Bright Light

One result of rising college costs is that companies are beginning to ask if a college degree is actually necessary for many jobs.  A perfect example is app developer.  Many apps have been written by young people, too young to be in college anyway.  In many other cases, on-the-job training is enough or, perhaps, an apprenticeship program.

Some young people have discovered that a job in the trades is a fast way to wealth.  A friend of mine has a brother who started by working with a plumber to learn the job, then went on to open first one, then two outlets.  He stopped doing the plumbing himself, and was able to retire comfortably at a reasonable age. 

Do you need college?  With so many online courses available, many free or low-cost, the specific education you might need for a job is available without a four-year degree.  And if we got the feds out of the college loan business, perhaps the prices would start coming down.  Years after you graduation, you will find that the “status” of your college matters little.  And, in fact, too often, you will find yourself in a career that has nothing to do with what you studied in college.

Ask yourself (and challenge your kids)—how much is college actually worth to you?