The higher education-student loan complex is in desperate need of more transparency and accountability—not more bailouts. A prudent first step would be for creditors, whether public or (ideally) private, to present clear information about salaries and career paths for graduating high school seniors to consider before they commit to taking out hundreds of thousands of dollars in loans to major in “ethnic studies.” The worst possible thing we could do would be a mass bailout of this nature, which would initiate a vicious, never-ending cycle of tuition spikes, more indebtedness and more bailouts. It is a quintessential exercise in trying to apply a Band-Aid to a grievously slit artery.
Think the moral hazard problems associated with the 2008 bank bailouts were bad? Wait until you see where this irresponsible experiment could end.
Numerous other problems abound. Such a bailout is inherently regressive, as it would disproportionately benefit woke children who decided they could afford four years of the decadent ivory tower wasteland, and disproportionately harm taxpayers who themselves did not go to college. Such a bailout would also be manifestly unfair to those graduates who have diligently worked to pay off their loans in earnest—even if it meant forsaking jobs they otherwise would have preferred to take in favor of jobs that pay more. In other words, such a bailout would inculcate the worst lessons in fiscal imprudence and recklessness—all while letting the universities off the hook for their running what amounts to one sustained racket.