School may be out for the summer, but the Student Loan Industrial Complex (SLIC) chugs along no matter what time of the year it is.
More than 42.5 million owe $1.8 trillion in student loans, with millions delinquent on their payments. Perhaps their strategy is to wait for all debts to be paid by Uncle Sam, who has no business being their SLIC daddy. Eight million of those are enrolled in the Saving on a Valuable Education plan that will start accruing interest again on August 1. Payments will remain paused until September, but the interest-free honeymoon has come to an end.
Over the last two generations, SLIC has become the de facto comptroller of our universities by issuing endless loans for hollow degrees that leave indebted students, thanks to financing from their Uncle Sam. Once the federal government took SLIC as a willing hostage and set the amount it would lend each year, college tuition and those ubiquitous fees followed suit, increasing yearly. It doesn’t take an economist to figure out that colleges can and will charge what they desire, knowing students can always borrow from their Uncle Sam, who is assisted by an overzealous army of willing collegiate “financial aid advisers.”
Colleges get off scot-free while raking in prodigious amounts of money at a much greater rate than the general percentage of inflation. According to the Consumer Price Index, from 1980 to 2021, the cost of living went up by 219 percent. However, inflation was nothing when juxtaposed with the increase in college tuition and fees during that period, which increased by almost 1,200 percent, according to the National Center for Educational Statistics.
Colleges are government-funded monopolies. Colleges that take students’ money with no regard for the quality or relevance of their instruction and education impoverish the student, the nation and leave in its wake very little value.
Colleges have no incentive to address this issue, as student loans have become their lifeblood with little to no accountability. Many students, who had never written a check in their lives, signed up for multiple loans worth tens of thousands of dollars. If one didn’t understand what they were signing up for, they have no business being in college.
The system is broken, leaving a plethora of indebted students and their parents.
Given the size and scope of the SLIC quagmire, something must give, and the cracks are beginning to show.
President Trump’s “Big, Beautiful Bill” will overhaul student loans by 2028, replacing current plans with a stricter Repayment Assistance Plan. Unlike SAVE, RAP bases payments on gross income and requires minimum monthly payments, even for those with no income. Moreover, overhauling the Public Service Loan Forgiveness program, which allows teachers, government and nonprofit workers to have their loans canceled after making payments for 10 years, will end.
If a student needs to borrow money, loans should be financed by banks and the colleges themselves. Federal loans should end altogether. This would force universities to shrink administrative bloat and their politicized departments.
Some collegiate endowments are in the hundreds of millions of dollars; others, such as in the Ivy League, are worth billions. Let them finance their student body. With the massive endowments of many colleges, there is no excuse for them not to offer generous aid packages to those academically qualified.
Since 1984, Hillsdale College has succeeded without federal monies. If Hillsdale can do it, so can everyone else. Endowments should fund loans that give them a return on investment.
Students should honor their debts and not expect their loans to be forgiven. Is the moral obligation to take care of one’s debts too obvious to mention, or is it no longer relevant? No taxpayer should be on the hook for another’s financial obligations. Absolving the debtor from their responsibility is no longer relevant.
If so, perhaps it’s time for home mortgages to be identified as student loans, while those who paid for their children’s education receive reparations.
Student loan forgiveness is nothing but a political bribe.
Buying votes is the only excuse for such an inequitable and undeserved handout of taxpayer money. Uncle Sam’s relationship with Uncle SLIC must end. There is no other way.