A brief confrontation between Elizabeth Warren and the father of a daughter in college highlights a problem with Warren’s plan for canceling student debt. Here’s how the conversation went:
Father: My daughter’s getting out of school. I’ve saved all my money, she doesn’t have any student loans.
Warren: [inaudible but the tone sounds supportive]
Father: Am I going to get my money back?
Warren: Of course not.
Father: So you’re going to pay for people who didn’t save any money and those of us who did the right thing get screwed?
Warren: [inaudible-shaking her head no]
Father: Of course we did. My buddy had fun, bought a car. He went on vacations. I saved my money. He made more than I did. I worked a double-shift, worked for extra money. [unclear but sounds like ‘Did all this work since she’s ten’ or possibly ‘Daughter’s worked since she’s ten.’] So you’re laughing.
Warren: I’m not laughing.
Father: Yeah, that’s exactly what you’re doing. We did the right thing and we get screwed.
At that point Warren starts to reply but the father says, “Nah, that’s alright” and walks off.
The man makes a good point and frankly, it’s one I relate to on a personal level. My oldest daughter is now in college. My wife and I realized years ago, when she was only a few years old, that paying for college was going to be a challenge. We set a financial goal for ourselves that would make it possible for her to go to school without taking out a lot of debt.
At the time, we had a 30-year mortgage with payments we could afford. Instead of coasting, we took out a 15 year mortgage and, as rates continued to drop a 10 year mortgage just a couple years later. As our salaries improved, we began paying extra money every month until we were paying substantially more than the actual payment.
The result of all of this was we were able to pay off our house. In fact, we paid it off exactly one month before my daughter started college last year. And that has made it possible for us to pay her tuition as we go rather than take out lots of debt.
I recognize that not everyone is in a position to do this even if they want to, but that doesn’t change the fact that plenty of people in our neighborhood and tax bracket didn’t make the same choices we made more than a decade ago. And frankly, there are lots of things we could have done over the past 10-12 years with all the money we spent on the mortgage, but like the dad in this clip we made a lot of short-term sacrifices for the long term.
If Warren wins that will turn out to have been foolish because she has promised to grant families $50,000 of debt relief on day one of her tenure in office. That’s a significant amount of money and a real incentive for people facing that debt to consider voting for her. I’m sure a lot of my neighbors will be dancing a jig if Warren wins. But for people like the father in the clip below, it turns out good planning and responsibility were poor choices.