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Student Loan Forgiveness - The five stages of THIEF?

"Robbing selected Peter to pay for collective Paul" – Rudyard Kipling


I have heard or read versions of that idiom many times, but Mr. Kipling certainly put it in the correct perspective to describe what may happen with Student Loan Forgiveness. For starters, let’s agree on a couple things:

  • The government will not be forgiving these loans - the “Selected” will. Keep in mind that the only means by which government collects money is through confiscation. I know confiscation has a negative context, and I am not against paying taxes, I am merely pointing out the obvious. The “Selected” are the confiscate-”es” - the taxpayers.

  • Each and every person who has a student loan has executed a contract with the loaning entity. No refunds, no exchanges, all sales final. No exceptions!

Being a simple man, the contractual obligation has always been enough for me to make a decision on whether student loans should be forgiven. So why have so many arguments been put forth to convince a simpleton like me that I am on the wrong side?



Disclaimer: In four and a half years of college, I amassed student loan debt, which at the time, seemed insurmountable. It wasn’t - although I took every deferment possible, I fulfilled my contractual obligation and paid it off in full. Then, when it came time for my 2 daughters to make the transition to higher education, my wife and I agreed to pay for every credit hour, with only two caveats. Number one (and this was primarily from me) - they could not attend Texas A&M - no way, no how. Number two - they had to use the credits toward a degree that would allow them to earn a comfortable living while also providing a service to society. Seemed quite reasonable and both quickly accepted. Tangentially related to this topic, I was one of the unfortunate pawns (bondholders) during the GM bankruptcy in 2009. What our government did seemed like an impossibility given our justice system, but it wasn’t (GM bondholders take it in the shorts). But don’t feel bad for me - what used to be my GM bonds matured in March 2021, and I received one hundredth of one penny on the dollar. For non-Math majors, that’s a whopping 0.01%.


If you’ve read this far, you most certainly know where I stand when it comes to this topic. What you may not know, is how I got here, and how it has shaped my analysis of potential solutions. (A little teaser to get subscriptions)


Denial

The very first time I heard the words “student loan forgiveness”, they were being uttered by any number of politicians in the leadup to the 2020 election. I’m surprised I actually heard the words, because a weird thing happens when I listen to politicians, of either stripe. After 30 seconds or so, I am suddenly Charlie Brown sitting in a classroom with those bad acoustics that make his teacher sound like she is talking through a slide trombone. By the way, have you noticed that the terms always change, almost as if they are being poll tested? Student “debt cancellation” was quickly replaced with student “loan forgiveness”.

Loan forgiveness or debt cancellation - it didn’t matter to me, as I knew they were only pandering for votes. What politician follows through on anything? This could never happen?


Anger

It’s early 2022, and what the hell? The likes of AOC and Elizabeth Warren actually think President Biden will follow through! President Biden, for his part, placed a moratorium on student debt payments, going even as far as extending it beyond the impact of the pandemic. But, apparently not good enough. And George is getting upset.




Bargaining

OK, maybe I was wrong about this whole student loan forgiveness thing. Let me keep an open mind. Let me listen to the “nuanced” arguments, take them in, let them marinate. Maybe I will have a change of heart. How can I call myself a critical thinker if I completely shout out all other voices? To the Google machine I went.

As I already had a strong opinion, there was no need to confirm my bias – only arguments, and I use that term loosely, in favor of this theft. The tone and tenor of the arguments were rather organic in nature, starting out with the ever-popular fairness argument. Notwithstanding my history with student loans, the fairness argument has never really carried much weight with me. Who hasn’t heard the ”life’s not fair” trope? It is true, though.

After the fairness angle was batted down with relative ease, on to the economics angle, which actually had legs. Most people, however, don’t drill into economics enough, so hearing that young folks having more money to spend would stimulate the economy, sounded like a good thing. But with inflation raging, regular folks have begun to understand the effects stimulus has on our economy. It’s really quite simple – too much money chasing too few goods is not a recipe for a happy populace.

It’s desperation time. The SLF Warriors were facing a real jam. Clinging to a 1 run lead in the 9th, bases loaded, 2 outs, facing the opponent’s best hitter – a short meeting on the mound. Manager’s mind is racing -What do we do? Can’t walk him or pitch around him – its mano y mano time. Or is it? What if the pitcher pretends to toe the rubber, while the 3rd baseman…? You know the rest – the hidden ball trick. Major downside of this approach is you only get one try and you must absolutely sell the fact that you are not quite “playing by the rules”. Enter statistics into the student loan debate. My feed rolled by no fewer than a dozen articles citing every statistic that existed, from the % of minorities holding student loans to the impact that forgiving these loans would have on the GDP. While perusing one of the articles, I found out that 63% of student loan debt was held by people of color or minorities who attended at least 2 years of college. Intrigued, I couldn’t wait for conclusion – imagine my surprise when there wasn’t one. But there was the inference, and we all know what it was. Statistic after statistic was offered, just like the pitcher staring into the catcher, foot just off the rubber, waving off sign after sign, hoping the runner strays far enough off third. I never did.


Depression

Is it cheating the process if you skip a stage? Oh well, just didn’t seem too much here to be depressed about. Being a boomer, I have long been jaded to the fact that some things are beyond my control - ahem… General Motors.



And then depression set in. Not really, I just love that movie.


Acceptance

It is said acceptance does not necessarily mean that we no longer experience pain or loss, we merely give in to the reality and stop trying to change it. As the event in this case hasn’t even happened, I can deal with this phase rather loosely. I am also a little too stubborn to let this go and just more than a bit peeved at the statistical fallacies used in attempts at critical thinking. Before I can check off this phase, I will need some real arguments … PLEASE. As Tracy Chapman pleaded in her 1997 Grammy award winning song - “Give me one reason to stay here…”. Seriously, I am looking for logical arguments in favor of student loan forgiveness, debt cancellation, whatever!

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