The White House is bracing for another installment in its endless debate over whether to forgive some student loans. The self-imposed deadline for a decision is August 31, and some reports suggest the president is considering wiping out up to $10,000 in student loan balances for those earning up to $150,000 a year.
There are numerous ways we could make college loan repayments less of a burden for those who took them out, such as: B. Programs that tie repayment to household income. But conservatives should avoid misplaced sympathy. It is a politically popular and prudent stance to take a strong stance against executive branch action to forgive student loan debt.
It’s easy to find mainstream media recounting of difficult stories that offer some sort of family-friendly plea for foreclosure on student loans (many journalists are likely to themselves have six-figure debts they incurred with the worthless cartel, the journalism school). There are many profiles of grads like Nick and Megan who live in New York and have postponed marriage until Megan’s student loans are paid off. Richard Williamson, who dropped out of college with about $19,000 in loans, told CNBC he probably would have married his wife sooner and had children if it hadn’t been for the albatross of debt.
Some Conservatives have also had their hearts broken, and they are concerned that loan debt is preventing young college graduates from affording children or buying houses. The possibility of using executive action to remove obstacles to marriage or fertility may tempt some to make a populist plea for a family-friendly student loan waiver.
But they should resist the bait. The evidence shows that student loan debt has a relatively modest impact on marriage rates and not much impact at all on the likelihood of having a child. Making family life more attainable and affordable is a worthy goal, but it should be pursued broadly — not by paying off debt for those pursuing higher education.
As a 2021 paper one of us authored for the Joint Economic Committee shows, women with high college debt tend to have slightly lower marriage rates — but that’s likely due to their decision to put off starting a family to pursue more years of education first of all. And the literature on student debt and fertility suggests an even weaker association — a multitude of studies suggest that for students attending four-year colleges, “student loans are not significantly associated with the transition to parenthood.”
Reducing the Cost of Obtaining a Professional Degree or Ph.D. would not make these women more likely to marry, while targeted support for married, pregnant, or caring graduate students, as the University of Notre Dame has attempted, would be more meaningful support in juggling the responsibilities of academics and family life.
So the family-friendly case for student loan forgiveness is largely contradicted by the evidence. Because a select few borrowers have amassed large sums of money, the average student loan balance has grown much faster than the amount held by a typical person. The fastest increase is seen among participants in the graduate program. As the JEC reporting paper noted, there is slight evidence that the recent spike in debt may have limited fertility among those pursuing college degrees, but the kind of people who choose to become doctors or lawyers might be the kind by people interested in delaying fertility until they are professionally established.
A Brookings study found that the five degrees responsible for most college debt are MBAs, JDs, BAs in business administration, BS in nursing and MDs, and that the top fifth of earners owe 35 percent of all college debts. There may actually be recent MBAs, recent attorneys, and resident doctors who eat ramen noodles to make ends meet. But a point-in-time analysis of their financial situation ignores their far higher earning potential down the road.
Colleges and universities have found a gullible demographic of people willing to borrow an average of $77,000 to obtain professional degrees in social work, counseling, and community health services. As American Compass’s Oren Cass pointed out, forgiving student debt without addressing the structural incentives would only worsen the problem and set a precedent for future handouts to the managerial class and the schools that serve them.
And there are sensible reforms we could pursue to make student loans less of a burden on families. Many people who took out loans to go to night schools like Corinthian College really do deserve compensation. Rep. Vicky Hartzler of Missouri has proposed a sensible bill to eliminate a marriage penalty in the treatment of student loan interest. Currently, single parents are allowed to deduct $2,500 in interest paid, while couples are limited to the same amount. Doubling the allowable amount to $5,000 for married applicants would eliminate a penalty in the tax code and give a little help to married couples with student loan debt.
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Another solution is to streamline the income-based repayment process, which links the payment owed to a household’s income. These programs offer a meaningful way to unburden low- and middle-income households through student loans. But they can sometimes be tougher on married couples, since higher income can mean a higher proportion of their income goes towards paying off student loans. This could be addressed by ideas such as offering a grace period for newlywed households or treating households with children more generously.
But conservatives who would counterintuitively defend student loan forgiveness as some sort of populist move are betraying a misplaced sense of empathy. Conservatives who attended expensive college may have a skewed idea of how prevalent student loans are — two-thirds of Millennials have no student loans at all.
Only 20 percent of young adults end up more than 100 miles from where they were born, and even fewer attend expensive Ivy League schools or extortionate graduate programs. The better way to help prospective parents get married and have children is to pursue policies that lower the cost of parenting across the board, such as: B. more affordable housing. But when it comes to student loan forgiveness, standing by principle is a more solid, conservative way of advocating for young adults from all walks of life.