As of the publication of this post, I have $81,411.15 in student loan debt, courtesy of the Art Institute of Colorado (whose parent organization, Education Management Corporation, has settled at least one large lawsuit alleging student loan fraud.) The debt paid for two years of tuition, supplies, room and board at a private, for-profit art school and was supplemented a bit by grants and scholarships. My back-of-an-envelope calculations suggest that a four-year degree at a state University would cost a similar amount. A student attending an in-state public University and living with their parents would spend about $36,000. A student living in a dorm at an out-of-state public University could spend upward of $135,000¹. So $80,000 does not represent an atypical debt for a student graduating within the last five years. I therefore consider myself well situated to talk about this topic.
It might be expected that I would be all for any plan to forgive student debt. Who wouldn't want $80,000 added to their net worth in one swell foop? The trouble is that such a move is just moving beans from one bowl to another. It relieves borrowers of their responsibility for their choices (bad, in my opinion) and potentially serves to increase the federal budget deficit (bad, in almost everyone's opinion). It would also spur an even bigger money grab by certain Universities. It's a bad idea, and not one that I see ever making it through the legislature, even if the Democrats had locked away the election.
I think, however, that there are some very fair ways of helping to reduce the burden on students.Continue reading →