Why the Student Loan Forgiveness Plan Was Rejected and How Loans Work

This post is meant to be apolitical. I'm actually being critical of Higher Ed here. I'm trying to leave emotion and politics out of it. And, granted, it's a very short summary. We need to be able to talk about these things rationally and realistically

On student loan forgiveness, it was struck down because spending has to start in the Legislative Branch. I've been saying this for months, Congress can fund the loan program debts, but they'd have to find and name the source of funding and put their names on it. The Executive Branch cannot just declare spending it is not given by the Legislative Branch.

So, the ruling yesterday doesn't end the possibility of loan forgiveness, it simply puts the responsibility back on Congress where it belongs. They can pass a spending bill today if they want.

In 2017 increases in tuition, fees, etc. were frozen. Historically college costs have risen with increases in loan availability. In 2017 there was a freeze in cost increases because there was a cap put on the loan programs. No more loan money available, colleges froze costs.

For reference: Higher Ed costs have risen over 400% over the last three decades. When they unfroze and increased availability and amounts in the 2019 budget, guess what Higher Ed did? In some ways, Higher Ed is a predatory lender. Colleges push for more loan money available so they can get more money and leave students with higher debt. It's not quite that simple, but pretty close.

You raise loan availability (student debt), we raise costs. Higher Ed wins, students lose.

Colleges are not stupid. You guarantee more loans, they're going to make sure they get all that money (just imagine if there were guaranteed auto loans). Costs will rise accordingly. Colleges know how much people are willing to shell out-of-pocket and how much they'll borrow. For those who borrow for all expenses, raising the amount available just allows them to increase costs. It's really simple.

In regard to auto loans, when the tax credit for ECs was passed, the price of an electric car immediately went up. You can understand why. Things don't happen in a vacuum.

This is not a critique or criticism of the idea, just a reminder of how the market responds to spending incentives and how government spending is designed in the Constitution. If anything, Higher Ed is really to blame here. I have to explain these things to PhDs.

"Having an advanced degree in Medieval Folklore and Mythology does not make one an expert on everything, Doctor."