A Grand Bargain On Student Debt: Loan Forgiveness For Ending Federal Student Lending

The system is creating a peasant class. It’s time to end it.

There are few more salient winning issues for Republicans than taking on the problem of higher education head on. But their reluctance reveals everything that’s still wrong with the party. President Donald Trump and new coalition on the right could change that.

The Real Problem

First, we must acknowledge that the root of the problem is not procedural or financial, but curricular: Our institutions of higher education are not teaching what they ought to be, but they continue to survive in a government-supported system that allows them to avoid the consequences of their failure. While they promise to provide students both a liberal arts education — to teach them how to think — and a practical education that will give them career skills and enable them to obtain gainful employment, many institutions give students neither.

In other words, our colleges and universities are failing to achieve their central purpose. And our politics and culture are paying dearly for it. Observers on all sides frequently acknowledge something is deeply wrong in America, even if they disagree on what, exactly. But the cause of the rot is obvious: Our institutions of higher education do not teach Americans to love and respect their country nor about its laws and Constitution. They produce ignorant citizens often prejudiced against their own nation.

This is now a regime-level problem for America because we cannot produce leaders who understand and love their country. In fact, young people on the right and left question what little they know about the very form and framework of our Constitution and political system, just as they have been systematically taught to do. In failing to produce good citizens, many of our educational institutions are the root of our political problems today. They have effectively become enemies of the republic.

It’s Time to Act

A regime-level problem requires a regime-level solution.

We will not change higher education by pleading or argumentation. It has been nearly 70 years since William F. Buckley practically launched the conservative movement by publishing “God and Man at Yale,” in which he castigated the atheism and flirtations with communism at his alma mater, and in the intervening years conservatives have written many more books decrying the failings of higher education. But while the problem has only grown worse, donors on the right still send their dollars — and their children — to their decaying alma maters.

In the past decade, however, something has changed: Americans are expressing dramatically increased opposition and distrust towards institutions of higher education. While this opposition arises partially out of political and cultural concerns, it is mainly caused by the way in which higher education is failing to provide students with careers and putting large sectors of the American people into exorbitant debt. Rising generations are becoming indentured servants, understandably reluctant to have children and unable to buy homes.

This presents a new political opportunity to combat one of the major sources of enmity to the right while solving the structural problem. But while Democratic presidential candidates gain ground by directly addressing the problem average Americans are increasingly facing, Republicans are failing to understand — never mind act upon — the American public’s growing and righteous indignation.

System Failure

At one time, post-World War II, it may have made practical sense to help more Americans go to college by setting up a system of federally backed education loans. The sort of jobs a “college kid” might be hired for right after graduation were manifestly better in terms of higher wages and social respect and prestige. As time went on, however, and more and more people went to college, it grew in influence as a social requirement for admittance into respectable company, as well as a general pass into the job market even as its actual value for most people dropped significantly.

Thus, the entire thrust of modern culture and political life has pushed generations of K-12 students and their parents in one direction, telling them that everyone must go to college and follow their dreams to achieve a meaningful life and a desirable social status. Educational institutions spend enormous sums marketing this message in attempts to recruit students and then help sign 18-year-old kids up for loans that would often be unthinkable in any other context. Everyone makes money except, increasingly, the students.

But Americans have begun to question the entire suicidal system. Regardless of what one thinks about the past, anyone familiar with present day reality knows that the system no longer works. There can be no disputing the basic facts: tuition has skyrocketed far past the rate of inflation. The ranks of university administrators have swelled while professors have increasingly become badly paid, part-time employees. Trillions of dollars have flowed freely to colleges and universities by means of a byzantine financial complex that preys upon the perceived needs and propagandized dreams of the people.

The system is monopolistic: If everyone thinks they have to attend anyway in order to live a meaningful life, student satisfaction as well as the ranking system become more important than particular graduates finding actual employment, never mind actually learning how to think. A supposedly fun and significant “life experience” takes the place of rigorous liberal arts education or intensive training for career skills. Never mind the self-replicating cadre of intellectuals teaching the students willing to listen to despise their country, the heritage and history of the western world, and the Christian religion. And Uncle Sam allows it all to happen by means of continued federal education loan programs.

All the talk in response about the “personal responsibility” of individual students and parents conveniently avoids the fact that the system is predatory. The American Founders often opposed free and easy credit because people — especially the poor and vulnerable most in need of it — will inevitably abuse it. They knew that easy credit encourages a spiral of bad habits and harmful societal consequences, as opposed to the virtue of personal responsibility. This is why political debates are — or should be — about the shape we allow the market to take in accordance with law and policy.

Bold Solutions

For any savvy politician or policy wonk without their head in the sand, this imploding bubble presents several angles of approach to reform the entire American educational system. There are two obvious areas of opportunity: the federal loan spigot must be turned off, and to the extent the federal government retains power over higher education, it must use that power to ensure it is truly educating Americans to know, love, and serve America. Anyone who was serious about changing or saving America would seize control of education, just as the contemporary Left did long ago.

This latter point will sound Orwellian to anyone still deluded by the fiction of “viewpoint neutrality” in our schools, but without acting to achieve it, we will soon lose our nation, if we have not already. Besides, the federal government already demands a lot of nonsense from higher education as it is. Regulations concerning discrimination and diversity and accreditation standards must be changed so as to demand curriculum and administration ordered to the nation’s real and present needs.

The more immediate political opportunity, however, is to begin to dismantle the usurious federal loan system and save future generations of Americans from indebted peasantry. Education loans must be made dischargeable by bankruptcy like most other loans, and institutions of higher learning and the banks alike must be forced to put their own “skin in the game” and be held accountable for failed outcomes, making it harder to borrow money. Ultimately, however, the Republican Party should be explicitly seeking to get rid of federal educational loans entirely or to completely restructure the way in which they operate.

The difficulty is that the higher education and banking lobby is powerful, and it will push the Left and many on the Right to argue that abandoning the failed policies of the past will prevent the poor and middle class from being able to attend college. The fact that taxpayers and the government are already funding and enabling a failed system that hurt the poor and middle class won’t matter; for decades large sectors of the American public and generations of politicians have bought into what are now meaningless platitudes.

Trump should therefore propose a grand bargain: a one-time student loan forgiveness program in exchange for shutting down the federal educational loan program. Close down the spigot of free and unaccountable money to the colleges and universities, which inflates prices and allows our educated class to incubate the ideas that are destroying America, in exchange for some kind of forgiveness program. Both sides of the compromise could be gradual in implementation.

Increasing numbers of intelligent people of good will on the Right see the political wisdom of such a daring move, which might actually make ending federal education loans politically feasible. Yet they are often reluctant to say so out loud because of the very real fear that it might lead to loan forgiveness without eradicating the loans. But this is politically foolish and ridiculously shortsighted — the Left’s presidential candidates are already adopting loan forgiveness as part their platforms. Steal their thunder!

At least, we should publicly acknowledge that if such a trade was guaranteed, we should gladly take it. If the Right had the good sense to even begin to publicly consider the nuclear option, it might win over many in a new generation and begin to cut off the flow of money to its greatest domestic enemies at the same time.

Higher education would drastically change, but it would survive. Those institutions that are already hedge funds with universities attached will be fine. Those that are not will have to transition to a different model and increasingly prove their worth. But no more scams and fraudulent or effectively worthless degrees.

Ultimately such a reform might mean fewer people go to college. But such a reshaping of education would also force businesses to use better judgement and more specific criteria in hiring and ultimately make it easier to match potential employees with jobs. Any responsible political party in today’s economic and social environment would seek to force a major shift to vocational education and would break the entire shameful accreditation and credentialing system. It would create the conditions in which certification, specific skills training programs, and apprenticeships reappear. They are far more efficient than our reigning paradigm, in which all that matters is obtaining a broad set of degrees from broad sets of ranked institutions.

Lincoln was a lawyer without law school. Let’s get back to that.

Any form of loan forgiveness, no matter how restricted, will cost a lot, to be sure — perhaps as much as a sizable fraction of a small war in the Middle East. But turning off the flow of federal loans — free and unaccountable trillions to the internal enemies of the republic — will save generations of Americans from crushing debt and make the educational system accountable again. Some kind of structured buy out of the loans of those living now is a small price to pay for forcing the entire system to evolve for the better.

At some point American elites are going to have to publicly acknowledge that the content of our educational system, outside of certain technical skills and research, is largely vacuous and ruinously miseducating our youth. It may ultimately take the death of the boomers to get to this point. But it is now inevitable. Increasingly half the nation rejects the authority of the ranking system. The system can no longer produce leaders who can connect and lead the people anymore. It is virtually incapable of doing so.

A prudent statesman would push for bold reform now, while it is still possible.

Matthew Peterson is vice president of education at The Claremont Institute.

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The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller or Conservative Daily News.

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