The Conservative Case for Canceling Student Loans

Trillions would be injected into the economy. No appropriation required. Nothing added to the national debt.

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This is a big-government, nationally threatening, and now failed lending system that no true conservative should support. The Department of Education, if it were a private bank, would be the largest bank on earth.

The greatest outrage: roughly since the last financial crisis, the colleges have been building up slush-funds (University of Virginia Rector Helen Dragas’ words, not mine)- completely separate from their endowments. We are talking hundreds of billions, here, cumulatively.

As a practical matter: The Department of Education just isn’t going to recover more than twenty cents on the dollar for this portfolio no matter how long, hard, and viciously they try over the next couple of decades, nor how many tens of millions of lives they ruin in the process. Far better to kill it now, call it stimulus, and move on.

Claims that loan cancellation would unfairly benefit people who don’t need it, and even increase the wealth gap are nonsensical. All federal student loan borrowers are determined to be financially needy as a prerequisite for receiving the loans, and the likely 80% default rate (or higher) that we can expect from the current borrowing pool speaks for itself, as well as the aforementioned fact that over 40% never graduated. What is more: the most financially successful borrowers tend to refinance their loans out of the federal program at lower interest rates in the private market. These absurd claims are shameful, frankly, and tend to be written by critics with histories of fighting for the perpetuation of the lending system rather than the good of the borrowers or the country.

The so-called conservatives making false statements that canceling the loans isn’t fair, is not needed, won’t stimulate the economy, and even that the President cannot cancel the loans should be ashamed of themselves. Their outrageous claims and divisive rhetoric only serves to perpetuate the worst big-government lending scam in U.S. history, and enrich the very colleges that they claim to oppose.

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Written by

I am Founder of StudentLoanJustice.Org, author of The Student Loan Scam (Beacon Press), and creator of the petition Change.Org/CancelStudentLoans

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