As posted on usdebtclock.org and explained here, the federal debt is nearing $32 trillion while Democrats and Republicans in Washington argue about what to do about it and a new debt ceiling crisis is nearing.
Nevertheless, on May 9 the US Department of Education (DOE) announced “Today, to mark Public Service Recognition Week, the U.S. Department of Education announced it has approved nearly 616,000 borrowers nationwide for approximately $42 billion in Public Service Loan Forgiveness (PSLF) since October 2021.” Specifically, the DOE added: “More than 20,000 student loan borrowers in Virginia [have been] approved for Public Service Loan Forgiveness.”
To be fair, the government has long used tuition reduction and other incentives to influence student behavior.
A friend of mine from William and Mary got a tuition break from what was then MCV (now VCU) by agreeing to serve as a physician in a “medically-underserved” community in the Old Dominion after earning his M.D.
A few years earlier, when we were students at W&M and I was preparing for a career in education, the State of Virginia had a shortage of foreign language teachers (among several fields) so they created a program to encourage graduates to get certified and teach those subjects.
Since that all happened in the 1980s, my memory is spotty as to the details. As I remember it, though, applicants got a $1,000 or $2,000 tuition break if they committed to serve for a certain time at a public school in the Commonwealth, which I did by teaching German for two years in Henrico County. (Although a couple of thousand dollars may sound like a pittance compared to college costs today, the 1980s were the same decade when our nation, with a Republican president, racked up its first $1 trillion in national debt. So, you can see how deficit spending and wild creation of money makes money worth less and drives up prices. As one can see here and here, at least The Roanoke Star is doing its part to raise awareness of this disaster.)
But back to the recent DOE announcement. It continues: “PSLF covers public employees—such as teachers, firefighters, and members of law enforcement, as well as those who work for a non-profit organization—in a variety of fields by forgiving the remaining federal student loan balance for those who make the required 120 qualifying monthly payments(….)”
- “Between October 2021 and May 2023, the Department has approved more than 20,000 borrowers in Virginia for more than $1.3 billion in loan forgiveness under temporary changes the Biden-Harris Administration made to the PSLF Program. That’s more than $66,000 per borrower!
- “While hundreds of thousands of Virginia borrowers already have benefited from PSLF, more will benefit as the program continues(….)
“Public Service Recognition Week celebrates individuals who serve the United States and local communities as employees of federal, state, local, or tribal government.”
While I’m happy for those who got their student loans cancelled, this does bring up several questions:
- The DOE claims this is to celebrate those “serve the US and local communities,” and of course teachers, firefighters, and others do. But in that sense, what job does not serve the community? As explained by Adam Smith in The Wealth of Nations, what drives capitalism is the wish for employees to make money and consumers to want a good or service at a high quality and low price. Looking at it that way, doctors, lawn care guys, babysitters, waitresses…all serve the community by performing services.
- What message does this send to teachers and others who did not incur any student debt? Or who have since worked hard to pay it off? Sucker!?
- The Biden Administration especially likes to “fight discrimination,” but isn’t this whole program kind of state-sponsored discrimination? The government picks the winners and losers.
- Can we keep going as a society if we keep cancelling debt and spending money we don’t have? It recalls the old saying, “Government rewards failure and punishes success.”