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The Free-market Solution | Student Debt Crisis

This is the first entry in a series aimed at presenting the difference between the proposals from those on the left, or "Socialists," and those calling for a free market solution. The goal is to state the solution in the simplest way possible, with links to more in-depth articles for more details.

Problem: Student Debt Crisis

Socialist Solution:

“Cancel” all student debt, which is held mostly by the US Government. Roughly $1.6 Trillion. Raise taxes on the wealthy and Corporations to make college “free” to anyone who wishes to attend. 

Free-Market Solution:

Remove taxpayer dollars from the student loan market, and allow private institutions to provide student loans. This will direct students’ money towards other resources such as Technical “Trade” Schools. As more trade schools are established, more students will choose a 6 month, 1 year, or 2 year program that readies them for a specific career path. Likewise, more corporations will offer training programs, sometimes even paying students to learn a skill they would have paid a college to teach them.

Read our article on the Student Debt Crisis. In this article we detail how government funding for student loans has led to the increase in college pricing.

As money is directed away from colleges, colleges will lower prices to attract more students. 

Student debt may not be “canceled.” That is the same thing as raising taxes, or printing 1.6 trillion new dollars.

Printing that much new money leads to inflation, which will lower the value of the dollars the students currently have, or will earn in the future. Hyperinflation of a currency can lead to dyer circumstances for the country as a whole (see: Venezuela, Weimar Republic, Soviet Russia, Zimbabwe).

Taking the money through taxation will inevitably lead to higher consumer prices, hurting the economy, and the students, as a whole. Taxes on "the wealthy" or corporations will create higher expenses, and thus a higher price charged for the services they are offering.

Information on Trade Schools