Student debt has skyrocketed 400 percent in the last 30 years to where it now equals nearly 8 percent of the domestic output. The new debt burden is causing this generation to put off getting …
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Student debt has skyrocketed 400 percent in the last 30 years to where it now equals nearly 8 percent of the domestic output. The new debt burden is causing this generation to put off getting married, buying houses, and starting new business, Jack Kroll, regent-at-large for the University of Colorado, said in a news release.
That's going to have a huge cost to society down the road.
Kroll will join a panel of four experts Jan. 26 to debate “Get Rid of Student Debt!” in Wheat Ridge. He will argue for government funding and regulation to bring debt loads back down to 1990s level.
Joining him will be Democratic strategist JoyAnn Ruscha.
“Congress thought it appropriate to charge students astronomical interest rates while doing nothing to stop the increasing costs of college,” Ruscha said in the release. “Imagine if student-loan borrowers had a SuperPAC like Wall Street. Congress would have solved their debt problems years ago.”
Not so fast, says Dr. Paul Prentice, who will speak against such largess. Drawing upon his expertise as an economist who is a senior fellow of the Independence Institute and a fellow of the Centennial Institute at Colorado Christian University, Prentice asks, “Where did the student problem come from?”
He sees government funding for higher education as a primary cause. Over the past decades, the government has poured money into college and universities, and that flood of cash predictably allowed the colleges to dramatically raise their prices. “More spending doesn't necessarily translate into better outcomes,” he says. Higher prices just force people to borrow more, bringing more cash into the system and leading to a vicious feedback cycle.
Jimmy Sengenberger, Dr. Prentice' s partner in opposing simple forgiveness, takes this point even further. Sengenberger is a Denver radio talk show host and the founder of the Millennial Policy Center.
“It's going to cost trillions to forgive the debt,” he says. “If you're trying to help millennials, remember who it is that will have to pay off that hit to the national debt — the very same millennials you're trying to help.”
However, Ruscha argues, “Half of student loan debt borrowers aren't millennials at all. It's not unusual to see families struggling with multiple student loan debts or a Social Security recipient see their benefits garnished because of loans they took out for their children.”
“The complexity of the student debt problem is exactly why the debate's motion advocates government funding and regulation,” Kroll says. “We must see the debt problem as a part of a larger crisis in higher education.”
Public support for training the next generation is disappearing just as the complexity of the world demands two or four years of post-secondary education just to be functional in the workplace. Is the right solution something less radical than complete forgiveness? Why not redirect tax cuts to incrementally reduce students' outstanding loans, as proposed by Colorado governor Polis during the 2018 campaign?
“Cancelling the debt is necessary for our economic health,” says Ruscha, pointing to economic models that suggest simple forgiveness will produce many positive impacts such as boosting real GDP by $80B to $100 billion per year and adding 1.2 to 1.5 million new jobs per annually. “An aggressive student loan forgiveness program should be part of a 21st century new deal.”
Sengenberger thinks he has a better approach than just giving away money. Why not revisit the bankruptcy laws to allow people who fall too far behind to discharge student loans like any other debt?
“Then they'll still have some skin in the game” due to the appreciable downside of declaring bankruptcy. His Millennial Policy Center also advocates further reforms in the area of accreditation and stipends, all relying on conservative notions such as competition and limited public spending to make college more affordable.
The event is hosted by the Jefferson County chapter of the American Humanist Association, a secular education-and-action nonprofit dedicated to improving society through rational, evidence-based thinking and policies, has organized this contest.
There will be a small admission fee. The price is lower for tickets purchased in advance. Information about the sponsor, the debate, and tickets can be found at www.JeffersonHumanists.org.
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