Student loan debt was accelerated by the Democrats' Health Care and Education Reconciliation Act, which was introduced two weeks after President Obama took office.  The education portion of the legislation kicked private lenders out of the student loan business so social-engineering Democrats at Sallie Mae could provide unlimited student loans, à la Fannie Mae's unlimited mortgage loans.  Private lenders merely service the loans, while Sallie Mae designs the loan criteria and purchases the loans.

Previously, private banks owned the loans and limited them to what they felt the student could repay.  With banks out of the way, there is no cap on tuitions, employee and professorial pay, or retirement pensions.  Under this setup, tuitions grow quickly, and student debt typically exceeds the down payment for their first home.  It may not matter, since such crushing debt is preventing many of them from buying a home.

With resistance to high tuitions from parents out of the way and prudential limitations by banks gone, universities accelerated tuitions dramatically.  From the beginning, the intent was to dip into deep pockets of the taxpayers.  President Obama offered to pay off debt for students that joined the government.  What a scam.

It has left some students indebted for life, while the administrators and professors retire at age fifty-five with an arrogated $120,000 per year pensions.  Now President Biden wishes to pay off most of the debt that the government planned and created.

This is a lose-lose for parents and their children.  Parents pay the higher tax, and there can be no better way to destroy our youth's attitude toward good credit than student loan debt forgiveness.  It is okay to borrow and not pay it back.

For those not blessed with a bailout, the debt-induced delay of purchasing a home with a thirty-year mortgage makes paying off the home a fleeting dream.  This nearly eliminates the opportunity to own their home with no debt — their best chance to escape poverty.

James T. Moodey is a retired entrepreneur, author, and economic essayist.  His recent book, The Ladder Out of Poverty, successfully determined why the poverty rate has not declined since the Great Society promised to end poverty.

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