Cal Thomas: Student loan reckoning

MYRNA BROWN, HOST: Today is Thursday, May 8th. Good morning! This is The World and Everything in It from listener-supported WORLD Radio. I’m Myrna Brown.

MARY REICHARD, HOST: And I’m Mary Reichard. It used to mean something when an individual had “good credit.” Here’s WORLD commentator Cal Thomas.

CAL THOMAS: Back in the day of telephone books, the Washington, D.C. Yellow Pages contained more than a dozen pages of “associations,” a code word for lobbyists. They included associations for tort reform, one for buses, and even an association for snack food.

I don’t recall an association that would lobby for students who refused to pay back their college loans. But there’s one now. It’s called “The Student Borrower Protection Center.” Its goal is what the name says: protecting students from an obligation to repay their part of an estimated $1.7 trillion dollars in student loan debt.

After a five-year suspension initiated by President Trump during COVID, the second Trump Administration has re-started the requirement that loans be repaid. The administration is also pressuring colleges and universities to persuade graduates and former students to repay their loans, saying if they don't, future students might not receive any loans.

The Wall Street Journal reports: “A far bigger group of schools is now at risk because so many students never resumed paying back their loans after a pandemic pause. [The Education Department says] nearly 10 million borrowers are either already in default or on the cusp… Within a few months, roughly a quarter of borrowers nationwide could be in default, meaning they are at least nine months behind on payments.”

If you are in default on a car payment, you risk repossession of the car. It’s the same with a mortgage payment. If you are late paying the IRS, it levies penalties, including wage garnishments and the seizure of property. Only when it comes to student loans are some people lobbying for so-called “forgiveness.” The Supreme Court ruled 6-3 that the Biden Administration did not have the constitutional authority to unilaterally forgive student debt. He tried anyway.

The Journal also reports that the Education Department has begun putting defaulted student loans in collections. Say that “almost 200,000 defaulted student-loan borrowers have begun getting notices that tax refunds and federal benefits could be withheld to pay back their debt as soon as a month from now.”

Presumably graduates are now working at jobs that pay enough for them to contribute at least token amounts to their debt. They could possibly work out a payment deal with the government. Even the IRS allows for such things, though it charges interest and penalties.

As the Trump administration and the Education Department get serious about student loans, many families are exploring non-traditional options for their highschool graduates. The high cost of higher education, along with the all too common one-sided liberal worldview, are two other reasons more are considering online courses. Distance learning programs spiked during the pandemic, but remain high. It’s safe to predict that those numbers could continue to rise.

“Good credit” used to mean paying bills on time, meeting obligations, and living within one’s means. It was an important measure of someone’s character. In our entitlement age, people who sign agreements when taking out a loan are effectively being told they shouldn’t be expected to keep their promises. What other responsibilities do they think they should be able to shirk? This is what happens when standards no longer matter.

I’m Cal Thomas.

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.