Townhall
Obama's Deficient Student Loan Plan
Steve Chapman
Jun 22, 2014

The government normally doesn't care whether you or I accumulate large bills for home improvement, a new car or exotic vacations. But Barack Obama feels no hesitation in concluding that the cost of higher education has placed "too big a debt load on too many young people." Therefore, something must be done.

The problem with Obama's analysis is defining "too big." Compared to what? Most of these young people, often in conjunction with their parents, have voluntarily shouldered student loans to pursue their studies. If they thought the burden was too heavy, they didn't have to take it on.

They have done so not because they are careless wastrels, but because they place an accurate value on higher education. They comprehend that it is very likely to pay for itself and that forgoing it would be the most costly option of all.

The president says the debt burden makes it hard for these people "to start a family, buy a home, launch a business or save for retirement." But they would most likely have even less money for those purposes had they avoided borrowing by avoiding college.

That's because people with bachelor's degrees make more money than people without -- nearly twice as much, on average. Not only that, but the value of higher education has risen substantially. Over the past 50 years, the real value of a degree has tripled.

Some perspective is in order. Though some students acquire huge debts, two-thirds graduate owing $10,000 or less, and only 2 percent owe more than $50,000. Not all of the latter need to worry. A newly minted doctor, lawyer or MBA from a good school can expect an income more than adequate to the need...

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