Many recent college graduates are having a hard time breaking into the job markets of their choice because those markets are becoming more and more competitive. As a result, millions of college graduates have to settle for lower-paying jobs that do not earn enough to pay their massive college loans.
In the United States today, there are 40 million college graduates who owe a combined $1.2 trillion in student loans. Some people are proposing we forgive these debts and provide these former students with a fresh start.
Unfortunately, the benefits of debt forgiveness are overshadowed by its drawbacks. Wiping out student debt would be a temporary solution. A college debt bailout today may compel future students to choose majors that are not as likely to provide the most in-demand job skills.
Also, debt forgiveness may encourage more sky-high loans with no intention of payback. And remember, government college loan programs use taxpayer dollars. Even taxpayers who do not attend college. Forgiving this debt really hurts all taxpayers… twice.
So the next time you hear someone suggesting college debt forgiveness… remember massive, government-provided student debt relief is, at best, a short-term solution that would only help those with outstanding loans.
At worst, it would be a financial burden for the rest of the country adding to our national debt while doing nothing to stop rising tuition costs or improve employment.