Goldsmith is a former law partner, adjunct law professor, Superior Court judge, San Diego city attorney, California state legislator and mayor of Poway. He lives in San Diego.
About one in five Americans have federal student loan debt, which is the largest amount of non-mortgage debt in the country. At $1.6 trillion, the federal student loan debt is about 6.5 percent of the U.S. gross domestic product and sures the gross domestic product of Australia, New Zealand and Ireland combined.
The 43 million student borrowers owe an average of $37,500 when leaving school. Fifteen years ago, that average was about $19,000.
Some point to this data showing the enormous size of student loan debt and argue we face a crisis.
I disagree. Its size shows the program has been popular.
Others argue so much debt at such an early age can be debilitating.
I agree. Student loans are opportunities to invest in one’s life. As with any investment, sometimes they work out and sometimes they do not. A big difference from most investments, however, is that student loans are investing in the borrower who is able to affect the level of risk by making good choices and working hard.
It is indisputable that student borrowers, like all borrowers, can experience difficult personal impacts.
When my wife and I completed schooling in 1976, we were allowed student loans of $10,000 each. Although $20,000 does not seem like a lot in comparison to current student loan averages, back in the 1970s costs were lower, as were salaries. The median household income in 1976 was only $15,000. Today it is nearly $79,000.
As with many student loan borrowers, we felt pressure to find work, hold our jobs and build our financial lives quickly. That was made more difficult due to the tough economic times we faced in the mid-1970s.
There were some sleepless nights, no vacations to celebrate graduation and no new cars. The old 1966 Volkswagen Beetle we had needed repairs we could not afford, but still ran as long as we parked on a hill to roll and get it started.
We worked, saved and paid down our loans. And we counted the months until we would be free of them.
It took us 10 years, but they were paid off. The feeling of achievement in paying those loans off is indescribable.
Although it was tough, I never viewed my student loans as a crisis. I viewed them as an opportunity. Like many, I could not have had the career of my choice and enjoyed the American dream without them.
I remain grateful.
However, it was not the loans that made us successful. They only helped give us a chance. It was our hard work and good choices.
Today, the student loan program is under attack. The current movement to “cancel” student loans is wrong and undermines the program.
Although it may be difficult for some to recognize, the fact is there is no such thing as “cancelling” debts. They do not evaporate. They become a negative number which must be made up by other people contributing more.
Here, those others are taxpayers.
People who planned their lives differently question why they should bear the costs through their taxes of other people’s college education. For example, many went into trades instead of college at lower-paid apprentice jobs and worked up the ladder for years.
There are graduates who worked their way through college to avoid having to obtain student loans. Why should they be forced through taxes to pay off other students’ loans?
Those who have paid off their loans question why they are not receiving refunds.
And what about mortgages, credit card debt and car loans that also place pressure on borrowers?
Finally, there are those who question the values we are promoting by simply relieving people from their agreed-upon loans and forcing others to bear the costs. Those who agreed to pay the loans and received the benefits, they say, should meet their obligations.
These are compelling points.
Those who cannot make current payments on their student loans have options. They can extend the and rework the payments or refinance to reduce the pressure.
But the one thing the student loan borrowers should not be able to do is shift the burden to other taxpayers.
Over the years, the student loan program has given millions of Americans the opportunity to pursue their dreams. Those who benefitted should pay their obligations and ensure the program remains viable to give future students that same opportunity.
