At a time when college graduates are awash in student loan debt, Barack Obama just signed a presidential memorandum easing their burden by transferring some of their debt to the American taxpayer. He called his act a “no-brainer.” Actually the memorandum is a no-brainer if you happen to be an embattled president desperate to buy enough votes to prevent a disaster for your party in the upcoming mid-term Congressional elections. It must be difficult for a man with an ego the size of Barack Obama’s to know that his ill-advised policies and destructive decisions have made him a liability to his own party. Consequently, he is anxious to do something—make that anything—to clean up his tarnished image. Hence, his memorandum capping student loan payments at ten percent of income. The difference between ten percent and what is actually owed, of course, will be paid by American taxpayers—many of whom never even had an opportunity to go to college.
The Democrat Party has been hurt in the eyes of the American public by a series of scandals that have plagued the Obama administration of late: Benghazi, IRS attacks on conservatives, the Guantanamo Five/Bergdahl releases, Obamacare’s false promises, and the VA travesty to name just a few. As a result, President Obama is desperate to find ways to rescue his party or, at least mitigate the damage has done to it. Predictably, he is using the only tactic liberals know: spending taxpayer dollars to pander to a targeted audience—in this case college graduates and dropouts who, because of the mess Obama has made of the economy, are struggling to re-pay their student loans.
People who are struggling to repay their student loans or simply don’t want to repay them will certainly be moved by Obama’s latest political ploy to vote for Democrats. American voters can be bought, a fact Democrats have proven in the last two presidential elections. Obama’s student loan memorandum might prove to be good politics for the Democrats but it is bad economics for Americans—including those who think they are benefitting from the act. Loading taxpayers up with expenses they did not incur and do not benefit from as a cynical political strategy for buying the votes of those who borrowed the money and now cannot or will not pay it back is shameful.
The president’s student loan forgiveness memorandum could more accurately be called the institutionalization of irresponsibility act. A fundamental principle of human nature is this: When dealing with people you get more of what you reward. Allowing college students to take out government guaranteed loans and then excusing them from making the payments they originally agreed to is rewarding and, in turn, encouraging irresponsibility. There is no other way to look at it: taking out student loans and then failing to repay them is irresponsible. By rewarding this form of irresponsibility, President Obama is guaranteeing that more college students will behave irresponsibly when it comes to student loans.
I can hear students talking about this right now. Student A to Student B: “Why are you working when you could just take out a student loan and have some fun in college?” Student B to Student A: “Because I don’t want to incur debt that I will have to struggle to repay after college. I don’t know if I will even be able to find a job when I graduate.” Student A to Student B: “Are you kidding? Why worry? Nobody repays student loans. The government will forgive your debt. Take out a loan and enjoy your college years—you have the rest of your life to work.” By the way, I heard versions of this very conversation numerous times during my years as a college professor and administrator.
Reinforcing and, in turn, encouraging financial irresponsibility is an unconscionable act on the part of an American president. This is just what America needs—more irresponsible people who refuse to pay their debts. What’s next on the president’s list of vote buying strategies: forgiveness of credit card debt, car payments, or home mortgages? Any one of these would certainly win votes for Democrats, but of course they it also drive another nail in the coffin of the American economy. In drafting policy and making decisions, it appears that Barack Obama looks no farther down the road than the end of his administration. It appears that the president does not even care what happens to our country after he steps down as long as he is able to get through his second term before our economy crashes and burns.
There is one and only one valid reason for the federal government to underwrite a loan for a college student. That reason is this: the student is majoring in a field that is critically needed in the United States—a high-value career field in which demand typically exceeds supply. In today’s circumstances such fields fall into the broad category of the STEM disciplines (Science, Technology, Engineering, and Math). Someone explain to me why students should be allowed to use taxpayer dollars to finance a college education in fields that are not needed in the marketplace and will not provide a sufficient income to allow students to repay their loans? No bank would provide a loan to students under these circumstances. Why then do so many banks make student loans? Because they don’t care if the students repay them—the loans are backed by the federal government, meaning you and me. The banks will get their money because you and I will end up paying it.
Don’t get me wrong. I believe that college students should be free to major in the field of their choice; even if that field has no market potential. However, in such cases the students should pay for their own education and not expect the government/American taxpayer to underwrite the cost. If a college student wants to make a questionable career decision, that is his or her business—with the caveat that colleges and universities should be called on the carpet for offering a proliferation of useless degrees—but the American taxpayer should not be expected to pay the enormous lifelong costs of such a decision. The cost of the college education—if it can be called that—is really the least of the costs in this situation.
Students who spend four or more years in college majoring in fields with no market potential will cost the American taxpayer for the rest of their lives in unemployment and government entitlement expenses. My message to college students is simple: If you want to major in some easy but useless degree program so you can spend four or more years hedonistically enjoying the college experience, do it on your own dime. Further, if you take out loans to finance four or more years of partying, don’t ask me to pay the loans back for you.