National & Minnesota Report
As the US Supreme Court hears the case against the Biden administration student debt program to forgive up to $20,000 for recipients of Pell Grants, it creates an aspect of generational equity with the Millennials of Generation X and Generation Y. The fulfillment of this Biden campaign promise, will seal the deal between President Joe Biden (D) and younger generations, but the ultimate power rests in the hands of the judicial branch.
If this direct support to these young cohorts fails to occur, while at the same time changes to the Social Security program are on the table and will likely result in lower benefits and increased age limits yes will be a double slap in the face to these younger groups. This sets up a pitting war between seniors & their grand and great grant children.
Starting in the post WWII era, higher education was seen as the principal means for societal advancement and became the primary means to climb up the rungs of the ladder of success and as a pathway out of poverty. The problem is the advancement came at a substantial cost, with an ever-increasing financial burden with required the creation of sizable debt to achieve the change in position. The greater participation in higher education resulted in larger institutions, more administration, more faculty and higher costs, which were passed on directly to the student population as higher tuition & fees, which for those without an ability to pay upfront were able to pay via loans.
The question about the structure of this system warrants a significant course correction. If we maintain the misguided belief of a more educated workforce is only beneficial to the individual and not the broader society, we are wrongly-headed. Our society and economy benefits from a more informed and educated workforce and our GDP reflects it.
The creation of student debt is a societal flaw. By creating a financial and structural obligation, we adversely affect other aspects of our economy. Instead of a person’s first mortgage being on a home which generates wealth and economic stability, we have created a debtor class with their first obligation to pay off their student debt. This in turn has delayed the entrance of younger people into the housing market, and is emblematic in the number of people who still live at home with their parents. To some, it appears Baby Boomers climbed up the ladder of success, and pulled it up after they got to the top.
This system was also exasperated in institutions like the University of Minnesota, which homogenized their tuition rates and effectively forced students with lower cost instructional programs to subsidize students in higher cost programs. Meaning a student seeking a liberal arts degree was not just paying for the students receiving advanced degrees in their own programs but also those getting degrees in law, medicine, engineering and computer science. If a student were to be paying for their own cost if instruction that is one thing, but to be forced to carry the additional burden of students of whom will have career prospects with higher income post-graduation, seems highly unfair.
We doubt this issue will be a part of the discussion before the court, but it should be.