Doesn’t someone have to pay in the long run?
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In the short term, probably not much. In the long term, much more.
So the argument that the taxpayer needs to pay for all the money the Fed doles out to pay for this isn’t completely true. The US prints money and increases the money supply for a lot of things (almost everything) and people are good with it. We could pay for this too. There are down sides to increasing the money supply TOO MUCH, or TOO quickly, but the student debt costs are pretty small in the grand scheme of things.
The real problem is, as the Fed starts paying off student debt, two things happen:
1) Because the cost of collage becomes cheaper (with the Fed picking up some of the bill), collages can raise prices! If you will go to collage for 100k, even if you cannot afford it because you take out loans. ANd someone comes and says “hey, I will pay off the first 100k of your loans” then the collages will say: “If I charge 200k, then those people will STILL go to collage, 100k in loans and 100k in US funding!” And the price of schools will continue to go up. There will be no market pressure to keep costs low. This is a HUGE problem. When the government starts paying for a service, the only way to keep the costs from spiraling out of control is to impose const controls. That is a slippery slope. Yeah, maybe we should do it for health care, and education, and housing, and gas and and and… and.. . Countries do this, it leads to everyone being hopelessly poor.
2) It makes voters who save for school or otherwise paid for it very mad. Lots of people can pay for school, or have worked really hard to save and pay for it. Its not very good when everyone gets a free hand out but you.
In the end, this is one of the socialism v capitalism arguments. What things should society pay for and what things should people be required to pay for if its valuble enough for them. Where do you draw the line? How much government regulation do you want? Do you want the government to set the price for all schools? (thats how the state school systems work – you could go there) but many people don’t, they want to go to private schools, but they want the cost fixed by the state schools. Further, people don’t like paying state taxes, so they want the fed to pick it up because the Fed can print money. Tough call.
Further there is an argument that society would be better off if some people didn’t go to collage. There are some majors where there are literally no jobs to be had. Funding people to study these things in great numbers means less productive people. Honestly, I would love to get a PHD in philosophy. Do you want to pay for it for me? Might only take me 8 years. While I am there you could pay my room and board too. Maybe when I am done I will try something else.
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