Yesterday kicked off the first of the Democratic debates.  How many are seeking the nomination?  Might be better to ask who isn’t.  Lots of folks on that stage last night.

Anyway…a major plank in the platform is student loan forgiveness.  Presumed frontrunners Elizabeth Warren and Bernie Sanders are pledging to forgive 75% and 100% respectively.

There’s no doubt the growing level of student debt is a burden but forgiving it won’t make it disappear.  It will transfer it to the American taxpayer.  That’s privatizing the benefit (students receive free/discounted education) and publicizing the cost (taxpayers are stuck with the tab).  Isn’t this the very same thing the Democrats railed against when they demonized the banks who received TARP money?  People who live in glass houses…

The U.S. debt currently sits at ~ $22 trillion.  Shifting the burden of student debt via loan ‘forgiveness’ would increase it by another $1.6 trillion.

And who would pay?  Taxpayers who don’t have student debt.  That includes:

  • 98.5 million who did not go to college
  • 106 million who went to college but didn’t take out student loans or have paid them off

Debt forgiveness punishes those who made sacrifices, made smart financial decisions and chose to live in a financially rational manner.  Debt-free graduates would end up paying someone else’s tuition.  It also punishes those who did not attend college.  It rewards those who assumed massive debt levels and chose not to make the financial decisions necessary to pay off that debt.

Debt forgiveness is a means of winning votes.  It does nothing to alleviate the debt burden to society.  It merely transfers the obligation to taxpayers.