Chris Powell: Forget student loan relief; finance nonprofits better
Student loan debt rose from $480.1 billion (3.5% GDP) in Q1 2006 to $1,683 billion (7.8% GDP) in Q1 2020.
MANCHESTER, Conn.
Count on Connecticut state government to misdiagnose a problem if doing so can facilitate rewarding an influential interest group.
That is what is happening again with the student loan debt problem, as illustrated the other day bya report from the Connecticut Mirror.
The report focused on a single woman with two young children who is employed by a nonprofit organization and pursuing a master's degree in social work at the University of Connecticut. She anticipates she will have student loan debt of $100,000 upon her graduation in May and doesn't know how she'll ever repay it if she sticks with social work at a nonprofit organization as she wants to do.
Rather than question the woman's life choices and those of others in her situation, state legislators have submitted several bills addressing student loan debt. One would have state government reimburse $5,000 in debt payments every year for employees of nonprofit organizations dealing with health care or human services. The debt would have to have been incurred by attending a college in the state.
A more direct solution might result from recognizing why employees of nonprofit social-service groups in Connecticut are so stressed even without student loan debt. It is because state government finances the nonprofits so poorly even as they do most of state government's social work for half the cost of state government's own employees.
But why pay the nonprofit employees more if the money can be diverted to educators, a special interest comprising a big part of the army of Connecticut's majority political party? For that's what student loans are: a subsidy not to students but to educators.
Student loan debt is a burden only if the education for which the debt was undertaken does not enable the borrower to repay. Student loan debt may be a great investment for people pursuing highly paid careers, like medicine, engineering, science, and technology. But otherwise student loan debt is often a disaster, as millions of young people have discovered.
Many retail clerks, taxi drivers, telemarketers, waiters, and child care workers have student loan debt that, while unnecessary to their employment, is keeping them from forming families and acquiring housing.
That doesn't mean that higher education is useless and did not give those people a greater appreciation of life. It means the cost is too high, even as educators in Connecticut tend to be highly paid themselves, far better paid than the working-class people struggling with student loan debt. That's not fair.
Neither is student loan debt relief fair to the many people who worked and saved to pay their way through college without incurring debt. Debt relief makes them suckers, and still President Biden is considering debt relief on a national scale.
The clamor for student loan debt relief is doubly mistaken because the country's overwhelming problem in education is not higher education but lower education, where social promotion graduates most high school students without requiring them to master high school work. That policy is also a great subsidy to educators, since their jobs are much easier when student performance doesn't matter
Chris Powell is a columnist for the Journal Inquirer, in Manchester.