One-Upping Warren: This is the Right Way to Forgive Student Loans

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It was one of those silly socialist ideas that normally come from the mouth of Bernie Sanders. No one took it very seriously in 2016 when the then 74-year-old Vermont Senator tried to win the (we now know rigged) Democrat nomination from Hillary Clinton. He proudly declared “free college for everyone!” The kids loved it. The adults giggled.

The Clinton establishment knew this kind of talk wouldn’t fly in fly-over country (hint: that’s us). It was too radical. Too impractical. Too communist. So they laughed at Bernie and encouraged him to say what he said.

Little did we know.

Andrew Cuomo, with a watchful eye on his own 2020 political ambitions, decided to see Bernie’s idea through. With the State Assembly and Senate his willing accomplices, he offered “free tuition*” to anyone interested in playing along. (For more about the asterisk, read “Cuomo’s ‘Free’ Tuition Plan Reveals His Techno-Ignorance,” Mendon-Honeoye Falls-Lima Sentinel, January 12, 2017, one of several award-winning editorials on New York State politics published by the Sentinel that year).

The rest of America chalked it up as “just another Blue State thing.”

Little did they know.

Not long after Cuomo’s gambit with taxpayer money, an unknown bartender in her twenties defeated an incumbent to win the Democrat nomination in a congressional district no Republican dare run. She brought with her an enthusiasm on par with the combined hysteria of a 2016 Sanders rally. Along with that, she become an icon of vitality for the idealist ramblings of the only avowed socialist ever to be elected to the U.S. Senate.

It wasn’t crazy Bernie anymore, the “Independent” that nearly won the presidential primary in a party he wasn’t registered in. Now it was “AOC” leading a new crusade of the young, following in the footsteps of their septuagenarian Pied Piper.

She speaks the same extreme ideas as Sanders, with one important difference: in 2019 these ideas aren’t considered extreme anymore.

OK, let’s take a step back. They are extreme and there’s a civil war going on in the Democrat party over them. It’s going to be a tug-of-war between now and the 2020 nominating convention. Only then will we know which side has won the right to lead the Democrat party against incumbent President Donald Trump.

Whether or not these ideas are “extreme,” there’s no question they have been honored with serious consideration by the mainstream media. This open discussion only makes matters worse for establishment Democrats. It hurts their ability to corral their party’s Young Turks. It legitimizes a brand positioning that only impresses already deep blue states and takes the Democrat Party further away from the vast middle ground of the heartland. Ironically, this land represents the ideological center where most true (unlike Bernie Sanders) “Independents” reside.

Give Cuomo credit where credit is due. The New York governor saw a bidding war coming and decided to place the first bet. I’m sure he’s got plenty more of these aces up his sleeve, but as long as he’s not formally in the race, others have the soapbox.

Enter Elizabeth Warren, yet another aged New England Senator with a tendency towards the outlier end of the political spectrum. Yet, whether it’s because of her age, the results of her now infamous DNA test, or the fact she really hasn’t earned her stripes, she’s not part of the Cool Kids in the Democrat Party.

What do you do if you’re not “in” and you want to sit at their same lunch table? You think of something that raises the ante, something that proves you’re just as sincere as the popular crowd.

Bernie Sanders and Andrew Cuomo want to give away free tuition to all students in the future? Elizabeth Warren one-ups them by offering to give away free tuition to all students in the past. (At least those students who weren’t responsible enough to have fulfilled their promise to pay for their own tuition.) That’s right. With one swish of her magic hand, she will forgive the debts of all college graduates still laden with loans.

No one is laughing this time. Sure, some are righteously indignant. This is, after all, a terrible idea. It’s unfair. It’s impractical. It’s unwise.

But, now stay with me on this one, it may be one of the most brilliant ideas to have come out of a politician’s mouth in a long while – if only it is done the right way.

Little did Warren know.

Consider the following guidelines for enacting Warren’s wish to waive all existing student debt:

Any debtor’s college loan will be immediately forgiven if the following steps are taken:

  1. The debtor’s college where the loan was incurred now becomes responsible for repaying the delinquent loan.
  2. The debtor’s college then has the option to rescind any degrees earned or class credits received for breach of contract on the part of the debtor since the debtor has failed to live up to promise to pay the tuition & board bills. (This is precisely what happens now – colleges will withhold conferring the degree if the student has an unpaid balance.)
  3. A new (preferably private) agency (think what Morningstar does for mutual funds) will require colleges to submit an annual report electronically that details:
    • Average time (in years) it takes students to fully repay their loans.
    • Number of students with outstanding loans 5 years after graduation.
    • Number of students with outstanding loans 10 years after graduation.
    • Number of students who have defaulted on their loans.
    • Number of degrees rescinded after graduation.
  4. Defaulted debtors will be listed in this same database indicating:
    • College attended.
    • If they completed enough courses to earn a degree.
    • The students intended major and whether that coursework was completed.
    • Year the degree was rescinded (if awarded).
    • The stated reason for the loan default.
  5. The above data will be available in an easily searchable format to the public so that:
    • Prospective students can assess the viability of the colleges they will be applying to.
    • Prospective employers can conduct an appropriate background check on potential employees.

No one should have their loans forgiven without reasonable and fair penalty. No college should fail to assume responsibility for producing a product incapable of repaying its debt.

Quite frankly, solving the student debt crisis shouldn’t fall on the shoulders of the lenders, be those lenders the government (and by “government” I mean the taxpayer) or the banks. They’re only receiving the fair market-rate compensation.

The true (and outsized) beneficiaries of student loans are the students and the colleges. Therefore, defaulted students and their colleges should be the ones who suffer the most from loan forgiveness. Hmm, strike that. The colleges should suffer the most because a case can be made they tricked the students.

Be careful what you wish for Elizabeth Warren. You may just get it.

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