On the issue of student loan forgiveness.

 
I don't mean to wade into the whole big question about student loan forgiveness in general. I'd have to say a lot more than I plan to now. I will say that I think a lot of folks are getting ripped off by excessive tuition and loans, education is too expensive no matter who is paying, and society would be better off if there was less burden carried by genuine seekers of personal advancement who make good choices. So I agree there is a problem and it merits a fix.

But on the narrow question of specific circumstances of who should get a government bailout, below is an example of where it's clear to me that this scenario does not merit a wealth transfer, and shows how we risk engendering legitimate resentment from non-beneficiaries of a loan forgiveness program.

The quote and then my reaction:

Kaylea Weiler, 36, partner at a law firm
Chicago

I’m an attorney who owes $125,000 in student loans. That’s after making consistent payments during the 10 years I’ve been out of school and paying $25,000 during the interest-free pause over the last two years. Prior to the pause, my required minimum payment was $1,800 per month. I know that as a partner at a law firm now, I make more money than the average borrower, but I feel buried in debt without options.

I’m a new mom and would love to be able to spend my little ones’ infant and toddler years at home with them, but I can’t afford not to keep working. I had to take out loans because I’m one of six children, and my parents could not afford to pay for law school or to support me financially while I attended.

Ten thousand dollars would barely put a dent in what I owe. I feel conflicted even writing this; there are others far worse off than me. But this is my situation, and I know I’m not alone.

The quote is from here: https://www.cnbc.com/2022/06/05/cnbc-readers-react-to-chance-of-10000-in-student-loan-forgiveness-.html

This person went to a high-quality undergraduate program. Then they went to four years of law school, followed by three more years of a master's program in intellectual property. My comments below presume that the majority of the debt is from the post-graduate work; I may have a different option if it's mostly undergraduate debt, which could have caused a treadmill pressure to do the graduate work and dig a deeper hole. Since I don't mean to pick on this particular person, you can assume my comments are about a hypothetical person who has a six-figure debt and it's mostly from post-graduate work.

These are adult decisions, made eyes wide open, about pursuing advanced professional credentials in hope of a higher earning opportunity or perhaps just the chance to work in a field one prefers for various reasons of lifestyle or personal passion.

The value proposition is clear going in. And this person isn't doing some kind of government or NGO work or otherwise failing to get market remuneration due to contributing to some social good at below market rate. A lawyer working as a public defender or representing poor tenants might merit a special subsidy program.

Furthermore, if the income is insufficient for the desired lifestyle, including paying off debt or being able to take time off from work, a person of this intelligence and level of skill and social savvy can elect to do what they may find to be less appealing work, but for higher compensation. As an example, the reason investment bankers make so much money isn't because it's so difficult, it's because so few people are willing to put themselves through the grind.

And even if that's all wrong, it's just an honest case of a bad personal investment, where it turns out the earning capacity one attempted to purchase via the student loans didn't materialize, that wasn't the result of any external circumstances. It's not like a 17-year-old who seemed to be dead-ended in options and was induced by high school counselors and tv ads to go to a mediocre beauty school for $30k and now can't get a job; such a person might well have been victimized by government loan programs and ought to get a bailout. That doesn't apply to a lawyer who can't generate enough free cash flow to meet their aspirations.

I do think we ought to do a lot more as a society to support the integration of work and family time, so I am sympathetic to the issue about wanting to take a break from work for kids, and I think it's a moral and social good to fix that. I am supportive of companies and firms that facilitate this time off, and I think the US should do this more, as is common in much of Europe. But I think that's a separate issue and shouldn't get backdoored into the student loan matter.