If you attack student loans, you are accused of putting at risk the only way that a poor and diverse student population can pay for college. How Republican of you! But if you support the availability of student loans, you are mired in a system, created by Democrats, that dumps the poorest and most diverse students onto the street without a degree and overburdened with debt. Democrats want to fix this but cannot pay for it because it will take so much money.
Amid increased discussions about college access, diversity, and affordability, Democrats have been mute on how student loans are actually one of the main culprits. Their proposals only relate to student debt and borrowers’ increased inability to repay. They want to lower interest rates, make income based repayment automatic, grant three months of memorandum of repayment, and introduce more forgiveness clauses, the latest for entrepreneurs. It is as though they made a tacit agreement that those who criticize the student loan program beyond these specific aspects are a threat; if you attack the student loan program for issues other than inability to repay, Democrats think that you are criticizing the student loan program to actually end it, and would even blame you for wanting to terminate the Pell grants.
The typical response I get when I criticize the student loan program is that without it many students from disadvantaged backgrounds will not be able to attend college. However, my argument is that student loans are actually hurting them. There is increased evidence that financing college through debt perpetuates the existing inequalities. Studies increasingly point to the reality that low-income, Black, and Latino students have higher loan balances, starting their lives at greater financial disadvantage. Higher numbers of low-income and/or minority students have to leave school without receiving a credential due to fears of amassing more debt. Several studies have also established that many students, especially Latinos, give up on college completely as they tend to be culturally more loan averse.
The politicization of the student loan program is only hurting disadvantaged students further. It is preventing healthy discussions on how to fix the perverse incentives built into the program, or how to better design programs that actually increase access, diversity, and affordability.
While the student loan program certainly helps many by closing the gap of unmet financial need, it does not justify the real and long-term damage it is causing elsewhere. While the Bennett hypothesis is an even more politicized proposal, it has increasingly become undeniable that the ease at which student borrow has actually enabled colleges to raise their tuition. In that respect, the student loan program is contributing to the increased unaffordability of college. Meanwhile, states have found it safe to stay disinvested or to disinvest further from higher education, knowing that students can easily borrow to close the gap. These perverse incentives have put now most of the financial burden of college on students and their families.
If we really want low-income and diverse students to go to college, if we really want higher education to be the great equalizer, we have to stop the duck and weave. We as a nation need to pay for it, not loan it. That’s going to cost a great deal of money. Loans are a distraction from the real question of cost. We need cost accountability from colleges. And once we have checks on runaway tuition, we have to man up and pay for it. There is no other way.