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Local Column

Olson: Total debt forgiveness not right approach

Students make their way around campus Friday, April 6 at Northern Illinois University in DeKalb.
Mark Busch -
Students make their way around campus Friday, April 6 at Northern Illinois University in DeKalb. Mark Busch -

People do a lot of things to earn a college degree. They take out loans. They join the armed forces. They work nights. I had a roommate who would sell a couple of dairy cows every school year.

Only one of those groups would benefit from forgiving all student loan debt: The group who borrowed, and have yet to repay their debt.

Is that fair? Probably not, really – unless we can turn back time and give Daisy back to my roommate, who could probably use her on his farm these days.

The cost of going to college has increased since I was a student in the late 1990s, and too much. As a result, America’s collective student debt load has grown to $1.6 trillion. As there’s no way to repossess a college education, student loans are the only debt that can not be discharged through bankruptcy.

Whether we served our country, sold our cows or took out loans, statistically, college was and remains a good investment.

According to the Social Security Administration, men with a bachelor’s degree earn on average $900,000 more in their lifetimes than those with a high school diploma. Women earn $630,000 more. (That looks like a wage gap to me, but I digress.)
The SSA says that statistically, if you borrow less than $250,000 for an undergraduate degree, it’s money well-spent in the long run. That assumes you complete school, get a job and have a career.
Few people have $250,000 in student debt, although many of us aren’t carrying a light load. More than 45 million people have some student debt, and the average borrower owes more than $35,000. Student loan debt nationwide has more than doubled since 2009.
But these are people who invested in themselves, and in many cases, they’ve been rewarded with significantly higher incomes than if they’d entered the workforce after high school, or not gone on to earn a postgraduate degree.
There are definitely debt-burdened college grads out there. There also are a lot of people with six-figure incomes carrying student loan debt, which they took on willingly in order to further their career ambitions. We don’t need to subsidize them.
It’s difficult to turn back time and make things equitable for everyone. Sure, people would have more disposable income if we canceled all $1.6 trillion worth of loans – but that wouldn’t exactly be stealing from the rich on Wall Street to give it to the poor.
It’d be giving it to a lot of middle class and upper-middle class people, who might not need the help. If you decide people of a certain income level are excluded from debt relief, they could end up paying taxes to cover someone else’s debt while still paying their own out of pocket, too.
People made life decisions about paying for college based on the rules at the time. Retroactively changing the rules by canceling all student loans punishes people who may have scrimped and saved, or spent years risking their lives to get that diploma.
We might not be able to turn back time and fix past mistakes in an equitable way, but we should make college more affordable for future students and their families.
Illinois’ public universities already have been pushed in that direction, in part because students increasingly are choosing out-of-state schools, and in many cases, enrollment is dropping.
After years of tuition hikes as high as 9.5% a year, Northern Illinois University officials have kept tuition flat since the 2015-16 school year. They’ve increased the focus on student career success, and there are plans for new research facilities to prepare students for future industries.
Enrollment also has been declining at NIU, which is attributable to a number of factors, but cost is one of them. People are scared of all the loans they have to take these days.
At some level, people should have some personal stake in paying for their education. Making college free to all might grow enrollment, but many of those students might not be a good fit, or they might not take it seriously.
We can’t forgive debts that already have been paid, and it’s hard to see how to equitably address the tremendous amount of debt that remains.
But we can and should recognize the problems created by the high cost of college in our country and work to correct them, through increased government funding, including for scholarships and financial aid, better budgeting and focus on ensuring that students who graduate from college are ready and able to function in the workforce.

• Eric Olson is general manger of the Daily Chronicle in DeKalb County, a part of Shaw Media Illinois. Reach him at 815-756-4841, ext. 2257, email, or follow him on Twitter @DC_Editor.

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