The White House is preparing for another installment in its never-ending debate over whether to forgive some student loans. His self-imposed deadline for a decision is August 31, and some reports suggest the president is considering eliminating up to $10,000 in student loan balances for those earning up to $150,000 a year.
There are many ways we can make repaying college loans less burdensome for borrowers, such as programs that link repayment to household income. But conservatives must avoid misplaced compassion. Holding a firm line against executive action to write off student loan debt is the politically popular and prudent stance to take.
It’s easy to find narratives in the mainstream media of hard stories making a sort of case for the family for student loan cancellation (many figures themselves have potentially six-figure debts incurred on the worthless cartel that is the school of journalism). Profiles abound of recent graduates like Nick and Megan, who live in New York and have put off marriage until Megan’s student loans are paid off. Richard Williamson, who dropped out of college with about $19,000 in loans, told CNBC that he likely would have married his wife and had kids sooner if not for the albatross of debt.
Some conservatives have also taken heart and worry that recent college graduates can’t afford to have children or buy homes because of loan debt. The prospect of using executive action to ease barriers to marriage or fertility might tempt some to make a populist case for family-friendly student loan forgiveness.
But they should hold the hook. The evidence shows that student loan debt has a relatively modest impact on marriage rates, and doesn’t have much of an impact on the likelihood of having a child. Making family life more achievable and affordable is a worthwhile goal, but it should be pursued across the board, not by eliminating debt for those who went to college.
As an article one of us wrote for the Joint Economic Committee in 2021 shows, women with high student debt tend to have somewhat lower marriage rates, but that’s probably due to their decision to put off starting a family to look for years. additional. of education in the first place. And the literature on student debt and fertility suggests an even lesser relationship: A variety of studies suggest that for students attending four-year colleges, “student loans are not significantly associated with the transition to parenthood.”
Reduce the cost of obtaining a professional degree or Ph.D. would not make those women more likely to marry, while providing targeted support to graduate students who are married, pregnant or with children, as the University of Notre Dame has tried to do, would provide more significant help in juggling life’s responsibilities. academic and family.
Thus, the evidence largely belies the family’s case for student loan forgiveness. Because a select few borrowers have built up large balances, the average student loan balance has grown much faster than the amount the typical individual has. The fastest increase has been among those attending graduate programs. As the JEC report found, there is slight evidence that the recent rise in debt may have reduced fertility among those seeking graduate degrees, but the kind of people who choose to become doctors or lawyers may be the kind of people interested in delaying fertility until they are professionally established.
A Brookings study found that the five degrees responsible for the most student debt are MBAs, JDs, BAs in business, BS in nursing, and MDs, with the top fifth of earners owing 35 percent of all student debt. In fact, there may be recent MBA graduates, newly appointed lawyers, and doctor-in-residence eating ramen noodles to make ends meet. But a close look at your financial situation ignores your potential for much higher earnings in the future.
Colleges and universities have found a gullible demographic in people willing to take on an average of $77,000 in debt to pursue professional degrees in social work, counseling, and health social services. As Oren Cass of American Compass pointed out, forgiving student debt without addressing structural incentives would only make the problem worse, setting a precedent for future handouts to the management class and the schools that serve them.
And there are strong reforms we could undertake to make student loans less burdensome for families. Many people who borrowed money to go to passing schools, like Corinthian College, really deserve compensation. Rep. Vicky Hartzler of Missouri has proposed a common sense bill to eliminate a marriage penalty in the treatment of student loan interest. Currently, single filers can deduct $2,500 in interest paid, while couples are limited to deducting the same amount. Doubling the allowable amount to $5,000 for married taxpayers would eliminate a penalty in the tax code and give married couples with student loan debt a little relief.
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Another solution is the streamlining of the income-based payment process, which links the payment due to a household’s income. These programs offer a sensible path to help ease the burden of student loans on low- and middle-income households. But sometimes they can treat married couples more harshly, as a higher income can mean a higher fraction of their income goes toward paying off student loans. This could be addressed with ideas like offering a grace period for newlywed households or giving more generous treatment to households with children.
But conservatives who would attempt a counterintuitive defense of student loan forgiveness as a populist move betray a misguided sense of empathy. Conservatives who attended high-cost colleges may have a skewed idea of how common student loan debt is: Two-thirds of Millennials have no student loan debt at all.
Only 20 percent of young adults end up more than 100 miles from where they grew up, and even fewer attend high-cost Ivy League schools or exorbitant graduate programs. The best way to help prospective parents marry and have children is to pursue policies that lower the cost of parenthood across the board, such as making housing more affordable. But when it comes to student loan forgiveness, standing up for principle is a stronger, more conservative way to stand up for young adults from all walks of life.