We can’t fix student loans without addressing college costs

Billionaire Robert F. Smith’s gift was marvelous, but generosity and new taxes aren’t the solution.

The student loan situation is a mess. We are transforming what should be a liberating process into a system that closes doors instead of opening them. At its worst, the loan system puts debtors into a dreary landscape somewhere between indentured servitude and sharecropping.

At the Morehouse College commencement exercise, the speaker, billionaire Robert F. Smith, surprised the graduating class by telling them he would pay off their student loan debt. When the class of about 400 realized what he had said, they reacted ecstatically. It was as if they had received a new birth of freedom. That is exactly what they got.

Smith is a graduate of Morehouse and his gift is straightforward enough. It is now being parsed, though, and there is a risk that his generosity and its simplicity will be left behind by imprecise notions of what it should have been. We can only hope that common sense prevails, and this wonderful gift is not smothered by hypothetical “what about” and “what if” considerations. We can only hope that someone in authority will stand up and say something like, “for heaven’s sake, it is what it is. Just do it.”

As individuals in this world there are things we can control and things we cannot. No individual, even Mr. Smith, for example, can fix the student loan mess …in part because it has a past that includes a lot of bad decisions by individuals as well as government and academia. Unless science achieves a breakthrough in time travel, neither government nor generous individuals can provide a do-over, which would reverse the bad decisions and twists of fate that have brought pain.

Handwringing in the news media greets any new idea presented to address the debt that trails those who borrow to finance it. In today’s world there are few, if any, “fits all” solutions in higher education. Someone or something is always hurt or left behind. Beefing up science, technology, engineering and mathematics (STEM) subjects, for example, often means a weight-loss diet for liberal arts subjects.

Those who are or feel that they have been left out of Smith’s marvelous gift might console themselves by examining the array of student loan solutions being proposed or favored by the presidential candidates. It is an extensive menu of ideas cooked up in different cuisines — some imaginative, some grounded in reality and others more reflective of wishful thinking.

The proposals are certainly diverse. One analyst drew up a matrix in order to depict the student debt solutions and which candidates supported each program. The real benefit of this matrix, though, was not to identify what your favored candidate proposed. That is easily enough to determine by visiting their websites.

The very dimensions of the matrix, though, tell us just how complex the student debt problem has become. There are 20 rows, of course, because there were just 20 announced candidates for president at the time the matrix was drafted. And there are six columns, each defining a category of solution to the student loan problem.

The six categories are: student loan debt cancellation, federal refinancing, tuition-free college, baby bonds, federal cost-sharing and expansion of forgiveness programs. Within the six categories, of course there are a significant number of variations, as each candidate puts a different spin on a particular aspect of the problem.

The only thing that the proposals have in common is that they will all cost money. Only a few of the candidates have addressed this issue directly. Elizabeth Warren, for example, wants to shift the financing burden to the most successful, wealthiest individuals by way of the tax code. And while not one of the 20 in the matrix, Gov. Jay Inslee’s plans for higher education tuition all have new taxes attached.

The Student Loan Program has been a federal government monopoly since 2010 and its potential losses from default are still substantial — although lower than they were before our economic recovery. It is just part of the overall student loan mess that remains a low priority in Congress.

Most of the Student Loan Program is an example of what happens when you don’t think things through. No one apparently wondered what would happen if busloads of students, pockets bulging with borrowed cash, showed up on higher education’s doorstep. And when college tuitions and other costs went skyward, apparently no one saw any connection to the easy money loans.

Smith saw something that he could control, and his generous gift should be appreciated for what it is: a reflection of our society at its best.

No amount of generosity or taxation, though, can fix the Student Loan Program mess unless we address higher education’s costs — unless we think it through.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

George Montemor poses for a photo in front of his office in Lynnwood, Washington on Tuesday, July 30, 2024.  (Annie Barker / The Herald)
Despite high mortgage rates, Snohomish County home market still competitive

Snohomish County homes priced from $550K to $850K are pulling in multiple offers and selling quickly.

Henry M. Jackson High School’s robotic team, Jack in the Bot, shake hands at the 2024 Indiana Robotics Invitational.(Henry M. Jackson High School)
Mill Creek robotics team — Jack in the Bot — wins big

Henry M. Jackson High School students took first place at the Indiana Robotic Invitational for the second year in a row.

The computer science and robotics and artificial intelligence department faculty includes (left to right) faculty department head Allison Obourn; Dean Carey Schroyer; Ishaani Priyadarshini; ROBAI department head Sirine Maalej and Charlene Lugli. PHOTO: Arutyun Sargsyan / Edmonds College.
Edmonds College to offer 2 new four-year degree programs

The college is accepting applications for bachelor programs in computer science as well as robotics and artificial intelligence.

FILE — Boeing 737 MAX8 airplanes on the assembly line at the Boeing plant in Renton, Wash., on March 27, 2019. Boeing said on Wednesday, Feb. 21, 2024, that it was shaking up the leadership in its commercial airplanes unit after a harrowing incident last month during which a piece fell off a 737 Max 9 jet in flight. (Ruth Fremson/The New York Times)
Federal judge rejects Boeing’s guilty plea related to 737 Max crashes

The plea agreement included a fine of up to $487 million and three years of probation.

Neetha Hsu practices a command with Marley, left, and Andie Holsten practices with Oshie, right, during a puppy training class at The Everett Zoom Room in Everett, Washington on Wednesday, July 3, 2024. (Annie Barker / The Herald)
Tricks of the trade: New Everett dog training gym is a people-pleaser

Everett Zoom Room offers training for puppies, dogs and their owners: “We don’t train dogs, we train the people who love them.”

Andy Bronson/ The Herald 

Everett mayor Ray Stephenson looks over the city on Tuesday, Jan. 5, 2015 in Everett, Wa. Stephanson sees  Utah’s “housing first” model – dealing with homelessness first before tackling related issues – is one Everett and Snohomish County should adopt.

Local:issuesStephanson

Shot on: 1/5/16
Economic Alliance taps former Everett mayor as CEO

Ray Stephanson will serve as the interim leader of the Snohomish County group.

Molbak's Garden + Home in Woodinville, Washington will close on Jan. 28. (Photo courtesy of Molbak's)
After tumultuous year, Molbak’s is being demolished in Woodinville

The beloved garden store closed in January. And a fundraising initiative to revitalize the space fell short.

Everett Mayor Cassie Franklin, Advanced Manufacturing Skills Center executive director Larry Cluphf, Boeing Director of manufacturing and safety Cameron Myers, Edmonds College President Amit Singh, U.S. Rep. Rick Larsen, and Snohomish County Executive Dave Somers participate in a ribbon-cutting ceremony on Tuesday, July 2 celebrating the opening of a new fuselage training lab at Paine Field. Credit: Arutyun Sargsyan / Edmonds College
‘Magic happens’: Paine Field aerospace center dedicates new hands-on lab

Last month, Edmonds College officials cut the ribbon on a new training lab — a section of a 12-ton Boeing 767 tanker.

Gov. Jay Inslee presents CEO Fredrik Hellstrom with the Swedish flag during a grand opening ceremony for Sweden-based Echandia on Tuesday, July 30, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Swedish battery maker opens first U.S. facility in Marysville

Echandia’s marine battery systems power everything from tug boats to passenger and car ferries.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion’s 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
State grants Everett-based Helion a fusion energy license

The permit allows Helion to use radioactive materials to operate the company’s fusion generator.

People walk past the new J.sweets storefront in Alderwood Mall on Thursday, July 25, 2024, in Lynnwood, Washington. (Olivia Vanni / The Herald)
New Japanese-style sweets shop to open in Lynnwood

J. Sweets, offering traditional Japanese and western style treats opens, could open by early August at the Alderwood mall.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.