Vox Day wants a student loan debt jubilee.
Vox is hoping that this is the first step to increased foreignness such as for the unemployed, but he is missing the point, which is that the purpose of this executive order is to generate positive press, but not move the needle much, as that would require actual legislation, which the administration seems incapable of enacting. There’s is not going to be student loan forgiveness for the unemployed or for all military veterans, not that I necessarily support such programs, but let’s not delude ourselves.
The scope of this plan is very limited, if by design. It only benefits the “permanently disabled,” not just the temporarily disabled. A veteran who is permanently disabled would not be able to work and would already be receiving a full suite of benefits. Moreover, a program already exists that cancels student loan debt, the TPD. “If you have federal student loans, are facing long-term disability, and are unable to work, you may be eligible for student loan forgiveness through Total and Permanent Disability Discharge (TPD)” This is probably why it was signed, because it generates positive press and does not involve additional spending because it coexists with a program that cancels debt.
Trump will not expand student loan debt foreignness any further, especially not for the young people. Being perceived as being too soft on ‘snowflake irresponsible millennials’ is not going to play well to his base.
Although Vox is right that it’s technically not a moral hazard, it does not address the most obvious objection, which is that forgiveness is unfair to people have already paid their debts, especially is they paid in a lump sum before forgiveness is ratified. Imagine how much it would suck to write a $20,000 check to pay off your remaining balance, only to have all student loan debt canceled a year later.
Vox is not alone in supporting student loan debt cancellation despite being on the ‘right’. The problem is, Vox Day’s perspective is perhaps distorted by the fact he never had to pay student loans (his dad paid his tuition). A better solution is to deal with the out of control credentialism in the job market, which is why there is so much demand for college in the first place. Student loan forgiveness will just exacerbate this problem.
Here are other approaches I have in mind:
Similar to laws that prevent discrimination based on race, religion, creed, age, etc., it would be illegal for employers to discriminate based on education unless employers demonstrate that the degree is directly applicable to the job. So that means a college degree cannot be required to be a secretary, for example, unless it can be demonstrated that having a college degree is necessary for the job. Or applicants with degrees cannot be prioritized over applicants who lack degrees, unless a degree is necessary.
Educational standards should be changed so that prerequisite courses are not required, hence fewer courses and credits are required, and thus less debt. Math majors, for example, would not need to to take anthropology, composition, history, etc. to get a ‘degree’ in math.
Relax disparate impact laws to make it easier for employers to find cheaper, faster methods of screening, than requiring a degree, which is expensive and time-consuming.
A special ‘college’ that’s sole purpose is to administer an IQ test or suitable proxy, and the degree or transcript is the score. It would be essentially free besides the test-taking fee. Because many employers rely on degrees to screen for intelligence and competence, this could be a way to create a cheap and quick signal while also bypassing some disparate impact laws, because the college is administering the test, not the employer.