Student loans

The government should stop providing student loans

Paul F. de Lespinasse

President Joe Biden is considering whether to write off the unmanageable debts owed to the government by students who used them to fund higher education.

It’s unclear what Biden should do with those past loans. But it’s obvious what needs to be done for the future: the government should stop granting extra student loans.

Although these loans have helped some people, they have greatly hurt many others. They encouraged recipients to dig themselves into financial holes. These unfortunates cannot buy houses or do many other things traditionally reserved for young adults.

As the saying goes, when people dig themselves holes, first they have to stop digging.

The loan programs were well-intentioned, but in addition to hurting many of their “beneficiaries”, they have caused the cost of higher education to increase unbelievably.

When I was a student at Willamette University in 1960, tuition at that excellent private school was $600 a year. There has been a lot of inflation since then, but $600 in 1960 would only be $5,680 in 2022 dollars. Tuition in Willamette today is $43,500.

As recently as 1973, undergraduate tuition at Oregon State University, a public institution, was $536 ($3,490 in 2022 dollars) for in-state students. Today it is $12,188 for in-state students and $31,579 for out-of-state students.

In 1963, one of my students wrote an article criticizing the proposals to finance college studies by loans, it was only an idea at the time. He feared that debt would reduce the “marital attractiveness” of young women.

But the debt was not necessary to finance the university at the time. Most students could earn enough money in part-time and summer jobs to fund their education, perhaps with some modest family support. At today’s tuition level, this is impossible.

Probably one of the main reasons state governments drastically reduced taxpayer support for public universities was that the loans allowed students to pay much higher tuition. Private colleges were able to raise tuition for the same reason.

Although I enjoyed teaching at the college level, I am happy to have retired 22 years ago. It seems to me that higher education is moving towards a system in which students and faculty are increasingly exploited for the benefit of administrative empire builders.

Increasingly, college education is provided by poorly paid part-timers. Tenure-track professorships are becoming increasingly rare.

And too many students, living on borrowed money, party too hard and generally live stoned. When we had to pay tuition and living expenses with real money, we were more careful about our expenses. I thought twice before buying a Coke once or twice a month.

It is not in the public interest for the government to encourage these developments, which the continuation of its student loan programs would do.

Many loan recipients never graduated. And even many graduates find it harder to find jobs based on what they learned in college, making college a more dubious economic investment and making it harder to repay their loans.

On the PBS News Hour, pundits recently argued that the student loan program should be reformed. But it is the very existence of these programs which is at the root of the problems which push these experts to call for reforms. It would make more sense to eliminate federal loan programs altogether.

Students for whom higher education remains a good economic investment could borrow from private banks. Those for whom higher education would be too risky for a bank loan would do better to consider apprenticeship programs, special training programs, or on-the-job training. They could then begin adult life without going into debt.

Some of the federal money no longer needed for loan programs could allow for increased support for hands-on education at local community colleges.

And maybe higher education could find a way to weed out overpaid administrative racketeers, cut out the frills, and bring tuition down to a reasonable level. There is always hope!

Paul F. deLespinasse is Emeritus Professor of Political Science and Computer Science at Adrian College. He can be reached at [email protected].