Biden has decreed that student-loan debtors won’t have to repay most of what they owe. A very bad, lawless move, but we’ve come to expect that from Biden.
As Professor Bryan Caplan points out in this post, however, most student debtors haven’t been paying anything on their balances for quite a while (thanks to the Covid “emergency” moratorium) and are unlikely to start paying again even if the moratorium should be lifted. His argument is that there will be safety in large numbers: So many of the student debtors will not resume paying that the government will choose to let everyone slide.
Caplan is probably right. This is how the Left will get its wish for “free college.”
What should be done? I like his radical thinking: Get the government out of student lending. “First and foremost” he writes, “this is a perfect time to end government-supported student loans forever. To say, ‘We thought we could avoid the slippery slope from subsidized loans to free college for all. We were utterly wrong, so we’re killing the program.’ At minimum, this is a great time to drastically raise the interest rate to compensate taxpayers for much higher repayment risk going forward.”
Yes. Government lending for college is one of the greatest blunders the United States has ever made, right alongside Social Security, the federal income tax, and fiat money. We ought to end government lending for college. In fact, we ought to end government lending for everything.