Student debt forgiveness will widen national divide

Bernie Sanders is now the early 2020 Democratic frontrunner, thanks in no small measure to young voters in Iowa and New Hampshire. But the way Sanders has enticed them to his campaign has the potential to leave us even more polarized than we are now.

In New Hampshire, exit polls revealed that Sanders won a clear majority — 51% — among voters 18-to-29 years old, 31 points better than second place finisher Pete Buttigieg. In Iowa, 24% of Democratic voters were 29 years old or younger, onethird higher than in 2016, and Sanders got nearly half that vote, well ahead of the rest of the field, according to Edison Research, which surveyed caucus goers on the day of the vote.

What is driving these results? Why is a 78-yearold, self-proclaimed socialist doing better with millennial and Generation Z voters than his much-younger rivals?

Under Sanders, all $1.6 trillion in student debt would be forgiven, regardless of the amount borrowed or one’s income level. Since the average graduate leaves college with $30,000 in debt, this proposal is a powerful incentive for a young voter to support Sanders. Elizabeth Warren, by contrast, would cap the amount forgiven at $50,000 and start to phase it out for borrowers who earn more than $100,000 annually.

Sanders proposes a tax on stock market trades to cover the cost, as if only the wealthy buy and sell shares, but aside from the question of how to pay for it is the real issue of fairness.

The obvious victims of the Sanders plan are students and families who have already repaid their loans, worked multiple jobs to get through college or whose families scrimped and saved over many years to avoid borrowing. Maybe a student lowered their sights on where to attend college to save on tuition, or perhaps chose not to attend college at all. And the biggest winners? Those who borrowed beyond their ability to repay.

There is a solution to the student debt crisis that does not create a set of winners and losers. First, colleges need to control their costs at the campus level. No more Taj Mahal dormitories, allyou-can-eat dining halls that serve sushi and lattes, and endless layers of university bureaucrats that contribute little to the academic experience. We will never regain control of skyrocketing tuition until we bring college costs down.

Second, we need to return to the principle of social exchange when it comes to student loan cancellation. If you receive something of value, you must forfeit something of value. It damages society when others are rewarded more for the same costs incurred, or when there is no equity in an exchange.

The College Investor, a personal finance website, lists 80 ways to achieve student loan forgiveness, from employer-based repayment assistance programs for public defenders and health service workers on Native American reservations to various student loan discharge options in return for military service.

The National Guard, for instance, offers loan forgiveness up to $50,000 if you enlist for part-time duty for at least six years.

The American people, even the most vulnerable among us, do not want to live in a society of takers. This is one of the disadvantages of socialism — employees lose their incentive to work and save because it is no longer rewarded.

Already, some young people may be holding off on repaying their student loans, or going deeper into debt, based on the prospect of Sanders or Warren winning the election.

But no one should hold their breath. There is certainly no guarantee that a Democrat will be in the White House a year from now, especially not with the President Trump’s recordlow unemployment, the soaring U.S. stock market and record-high median household incomes. What is clear is that lowering the cost of college and expanding opportunities to exchange debt for some form of community service is the solution to the college debt crisis, not pie-in-the-sky proposals that will leave Americans bitter and divided.