Imagine a state government with the worst credit rating in the country borrowing money to pay off the personal debts of individuals with six-figure incomes who buy homes that cost up to $ 500,000.
Two years ago, Illinois lawmakers passed the $ 45 billion Illinois Reconstruction Capital Plan. It was a bipartisan proposal negotiated behind closed doors and designed to pay for highway repairs, bridge construction and public building construction. But the plan also set aside $ 25 million to write off student loan debt.
The SmartBuy program earns up to $ 40,000 in student loans if the debtor purchases a house in Illinois and keeps it for three years. Another $ 5,000 is available as an interest-free loan for a down payment or closing costs.
The student loan forgiveness sounds magnanimous until you realize that it really means that people who haven’t gone to college or have already paid for college will end up footing someone’s college bill. one else.
“The last time I checked, two-thirds of Americans are unlicensed. It is not fair to expect them to pay for the college education of those who are better educated and often better off than them, ”said Lindsey Burke, director of educational policy at the Heritage Foundation.
In case you think the Illinois program is targeting tough cases struggling to survive under crushing debt, think again.
People who earn $ 109,200 per year are eligible for loan forgiveness.
That’s 65% higher than the median Illinois household income of just under $ 66,000.
The program is expected to repay the debts of around 1,000 people. But former state representative Jeanne Ives notes that about 2 million Illinois have outstanding student loans.
That means the other 1.99 million Illinois taxpayers with student debt are paying not just for their own college education – but for someone else.
It’s not fair to them or to students who worked in college, got scholarships, went to the military, chose cheaper schools, or whose parents sacrificed themselves to send them. .
I contacted Kristin Faust, executive director of the Illinois Housing Development Authority, which administers the SmartBuy program. But neither she nor her staff immediately responded.
Let me admit that a ridiculous amount of debt is incurred to pay for college education.
But who are the bad guys in this mix? Well, college administrators.
According to the United States Bureau of Labor Statistics, the average price of tuition has increased 31% over the past decade.
But this is not the case in all schools.
For example, Purdue University has not increased its tuition fees for 10 years. Not only has tuition fees remained stable, but room and board rates have fallen over that timeframe, from the second in the Big Ten to the most affordable.
But most university presidents have not followed the example of boilermakers,
After all, students can borrow and pay for what schools ask for. Thus, colleges maximize their income by pushing those they are supposed to serve deeper into debt.
And colleges are using a lot of that money to create more administrative positions. Since 2001, administrative positions on college campuses have grown at a 50% faster rate than teaching positions, Burke said.
“It’s also important to remember that colleges compete with each other to recruit students. They feel the need to add more flourishes and amenities like climbing walls, lazy rivers, and more beautiful buildings. And that also increases costs, ”added Neal McCluskey, education policy analyst at the Cato Institute.
Our current student loan system is like giving 18 year olds credit cards and telling them to charge what they want and worry about how to pay later.
And as long as this blank check mindset is not resolved, our young people will be getting more and more into debt.
Scott Reeder is a veteran Statehouse reporter. Contact him at [email protected]