Better Alternatives to Student Debt Cancellation
President Biden appears to be dithering on his college debt cancellation plan. He is supposedly ready to forgive $10,000 in student loans for households earning less than $300,000 per year. Democrats hope such a jubilee will reverse the president’s plummeting polls and bolster their chances of a midterm election. Still, Biden has not officially announced the plan. Politico a chalked the delay of the “deliberative” process of the president.
You don’t have to deliberate long on this topic to realize that debt forgiveness is regressive and unfair, and better solutions are found in charter schools and high-quality apprenticeships to reverse runaway college debt.
Canceling student debt does nothing to solve the underlying problem that caused it in the first place: skyrocketing tuition and fees, which have increased by 180% over the past 20 years. Canceling these loans rewards universities’ aggressive and opaque pricing practices at the expense of taxpayers, which exacerbates college unaffordability.
Debt cancellation also plays fools those who have worked hard to repay their loans. Taxpayer forgiveness of student debt transfers wealth from the working class to the college-educated upper class. This incentivizes current students to take on more debt to fund their education, assuming it will be forgiven.
“In the long history of the global debt cancellation debate”, write economists Phil Gramm and Mike Solon in the Wall Street Journal, “few have ever had a weaker case than America’s student loan debtors.”
A better way to deal with outrageous student debt is to make it unnecessary in the first place by providing young Americans with viable alternatives to the traditional college system. If teens and young adults can gain the knowledge and skills to succeed in the economy, they won’t need to take on massive college debt as a prerequisite for working. Alternatives are especially needed given that so many students graduate from college without marketable qualifications.
Many charter schools, which are usually publicly funded but run by alternatives to public schools, offer demanding programs that prepare students for college or work once they graduate. secondary. Charter school graduates can choose to continue their education, and often do, but they don’t have to. And they certainly don’t need to go into debt tens of thousands of dollars for liberal arts degrees of limited value.
The educational benefits of high quality charter schools are clear. The school choice movement in Florida, for example, has transformed the state from a national public education laggard to a leader. Unfortunately, since charter schools are a threat to powerful teachers’ unions, Democrats on their payroll are pushing hard for regulation of their growth. For example, the Biden administration recently released new rules making it more difficult to open charter schools.
Another effective solution to help young Americans succeed in the job market without needing to go to college is industry-led apprenticeship programs that educate entry-level employees on the job. Apprenticeships eliminate the need for expensive college degrees that require years of study. Apprenticeships generate secure employment, early financial independence and tangible skills that make workers highly valued commodities. Rather than entry-level $15-an-hour jobs, apprenticeship programs can easily lead to $50,000-a-year careers that project young workers into the middle class.
US policymakers can reinforce learning by holding the private sector accountable. Unfortunately, last year the Biden administration repealed a decree released by President Donald Trump that expanded industry-led apprenticeships and removed unnecessary red tape preventing entry-level workers from gaining access. Instead, Biden doubled down on the bureaucratic big-work, big-government approach that has been inadequate for generations of young working Americans.
Given that Biden hasn’t officially announced his college debt relief plan, there’s still time for more sensible solutions like expanding charter schools and apprenticeship programs to prevail. They offer a significant advantage to entry-level workers over unfair and counterproductive student debt forgiveness. The fact that they also provide a college loan crush loophole is an added bonus.
Erika Donalds is the President and CEO of Optima Foundationa non-profit organization that supports the creation and expansion of quality charter schools, and a member of the Job Creators Network.