Why Student Loans Aren’t the Problem

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Posted: Sep 13, 2022 11:39 AM

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The so-called student debt crisis can be fairly easily solved through loan forgiveness as long as the government is prepared to continue forgiving student debt long-term. To put it differently, Biden’s reforms alleviate a pain point rather than addressing the core problem of rising higher education costs. Rather than politicizing a measure intended to assist those hindered by student loan debt, Americans should view the Biden administration’s forgiveness of student loans as the climax of America’s higher education story. Whether or not you agree with the forgiveness of student loans is less crucial than recognizing that forgiving student loans highlights the deep brokenness of the higher education industry and demands broader reform. My concern is that student loan forgiveness will only exacerbate the higher education cost problem due, in part, to three contributing factors: (1) schools are sentimental, (2) schools tend to operate without external competitors, and (3) schools have little accountability, particularly fiscal accountability, to the public, despite federal funding.SentimentalityOver the years, I have had the pleasure of working as a consultant with higher education institutions who worked hard to keep their costs low and to minimize student debt through disciplined financial management. Other establishments have …