Page 12 - November 2022 Issue.indd

DOLLARS AND SENSE by Tolbert Rowe

Forgiving Student Loan Debt (part 2)

As I write this in Mid-October President of a recession, and unemployment will with their hands in manufacturing and
Biden’s student loan forgiveness plan surely increase. When that happens it agricultural jobs that required little, if

discussed in last month’s article does really will be difficult for everyone to any, formal education beyond learning

not appear to be a sure thing. Multiple make payments. a trade, and, like legacy graduates, they

lawsuits have been filed in Federal Court often followed in their parent’s footsteps.

Instead of addressing the effects of

asserting that the Heroes Act of 2003 The GI Bill afforded veterans from all
student loan debt through forbearance
does not give the Secretary of Education economic backgrounds the opportunity
of payments and loan forgiveness, there
the authority to discharge student loan to work with their head instead of their
should be a focus on addressing the
debt. hands.
root cause of this disaster of $1.7 trillion

Under that 2003 law, the administration in educational debt. The root cause of Tuition at colleges and universities was

can grant the relief to borrowers America’s belief that to be successful relatively affordable for many Americans
who have “suffered direct economic in life you needed a college degree is well into the 60’s and 70’s. In 1978,
hardship” due to a national emergency. grounded in K-12 education that started economic conditions in our county
COVID-19, it argues, is “an ongoing after World War II. began to change the dynamic of higher

national emergency that, after more than education funding. Stagflation, (high

About 5% of adults had earned a

two years, has left no aspect of daily life unemployment with high inflation)
bachelor’s degrees prior to World War
untouched.” I respectfully disagree. began to impact college applications
II and a signifi cant percentage of them
and admissions.
If I were in court, I would argue against were children of college graduates,
this since the forbearance from payments known as “legacy” graduates. The GI Harvard University, arguably the top
since April of 2020 more than offset Bill provided veterans who served for of Ivy League schools, decided to
any direct economic hardship student at least nine months of active duty the implement a policy of “Higher Tuition/
loan borrowers could have suffered. benefit of a fully paid college education Higher Aid.” Having a high percentage

Plus, as I have pointed out numerous to include tuition, books, and a generous of wealthy “legacy” students (family of
times, unemployment has been near allowance for living expenses. So many alumni) willing to pay whatever tuition
historically low levels for more than a vets signed up to go to college that half of cost was necessary, Harvard increased
year with two available jobs for every the two million undergraduates enrolled tuition 18% in 1979 and continued to
unemployed person. in the fall of 1946 were veterans using increase tuition on average $840 for the
their educational benefi t. next decade. This was radical in relation

Instead of arguing that the pandemic
to the economic conditions at the time.
is an ongoing national emergency, Going to college prior to World War II
President Biden, and his administration, was a benefit to the upper and upper To offset the shock of higher tuition
should argue for student loan forgiveness middle class of society who could aff ord to lower income students, aid was

because we are in the beginning stages it. Middle class families tended to work increased. The aid was paid for primarily
by college’s growing endowments which
received a lot of donations from alumni.
With the success of this dynamic other
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private schools began to do the same.
Purchase or Refinance The wealthy are willing to pay full tuition

and their graduates (alumni) continue
the cycle by their contributions to the
college.
Public colleges and universities were
unable to duplicate the High Tuition/
115 E Dover St. Ste 3 - Easton, MD
High Aid model because their core
tolbert@baycapitalmortgage.com C. Tolbert Rowe, mission was to provide an affordable
www.baycapitalmortgage.com NMLS Vice President/Lending higher education for residents of
182844
their state. Much of their support
410-819-3005 / cell 410-310-3520 depended on taxpayers and elected
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