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Billionaire Offer to Pay Off Student Debt Doesn’t Fix the Student Loan Crisis

How to Fix the Student Debt Crisis

Written by Jeff Siegel
Posted May 20, 2019

It was a beautiful gesture, and one that will not be forgotten anytime soon.

Billionaire investor Robert Smith, while delivering his commencement address at Morehouse College, announced that he would cover the college loan debts of all the graduating students.

Can you imagine that?

Can you imagine the huge collective sigh of relief that came over the crowd after Smith made that announcement?

I’m happy for those students, as I know that not having to carry tens of thousands or hundreds of thousands of dollars in debt, right after graduation, will help them in immeasurable ways.

But the reality is that, despite this selfless act, there are more than 44 million student loan borrowers in the US. that owe, collectively, more than $1.5 trillion. And this number isn’t declining.

In 2019, student loan debt is higher than it’s ever been. And quite a few of these students are going to default on these loans. Certainly this creates a huge burden for graduates, but it also creates a huge burden on our economy.

Make no mistake: This is an economic crisis. And it needs to be addressed yesterday.

Some lawmakers, like Elizabeth Warren, for instance, are proposing a tax on rich people so college becomes “free.”

Of course, nothing is free, and such a solution is a mockery of all that which is rational.

While I don’t believe Warren’s intentions are particularly dishonorable, this idea of free college and debt forgiveness is based on the assumption that it’s OK to steal from some people so that others can have free stuff.

Her suggestion is one that is based on theft. There’s no other way to put it.

And make no mistake: debt forgiveness is just another way of saying, “you don’t have to pay your debts.” That’s not a good lesson to teach teenagers. It’s bad enough that we have a sitting president who subscribes this line of thinking.

While I don’t know how to fix the student debt crisis, I do know that not every student needs to go to college. Some kids should learn a trade, some should take a year off to figure out what they want to do. Hell, some kids should just go to a community college for the first year or two in an effort to save money and figure out what they want to pursue as a career, but without having to pay $50k for that opportunity.

Understand, I maintain that what Robert Smith did is a beautiful thing. He’s a good man and should be recognized for his selfless act of charity. But not every college student will be blessed with such a gift. And if we don’t stop pushing all of our kids to go right into college – regardless of the price – this student debt crisis is just going to get worse. And it won’t just be the students that get screwed over when they default.

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