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Student Loan Debt Continues To Grow

Despite Falling Enrollment, Student Loan Debt is Soaring

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According to data from the Federal Reserve, student loan balances grew by $23 billion from the second to the third quarter. SchiffGold reported that 45 million Americans owe $1.7 trillion in total student loan debt. The total outstanding loan balance has grown by $54 billion during the past year.

What is interesting is how enrollment in colleges and universities plummeted by over 231,000 students to 17.97 million from 2018 and 2019. The trend of falling university enrollment has been present for some time. In 2011, for example, there were 20.14 million students enrolled at colleges and universities. From that point until the present, enrollment fell by 10.8 percent.

The SchiffGold piece explained why student loan debt continues to increase despite the decline college enrollment:

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One of the reasons student loan debt continues to increase despite falling college enrollment is the glut of student loan money pushed up the cost of a college education. The federal government pushed the widespread availability of student loans. It was supposed to make it possible for everybody to go to college. But there was an unintended consequence. It made a university education unaffordable and ended up saddling millions of Americans with crushing levels of debt.  Studies have shown the influx of government-backed student loan money into the university system is directly linked to the surging cost of a college education.

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Additionally, student loan balances continue growing due to borrowers being delinquent on their loan principal payments, which SchiffGold noted:

Another reason student loan balances continue to surge upward is that borrowers aren’t making payments on their loan principal. This was a trend before the pandemic that has accelerated in the year. Many student loans were moved into automatic forbearance as the coronavirus economic chaos unfolded. President Trump signed an executive order extending interest-free federal student loan forbearance through Dec. 31, 2020.

Over 1 in 4 student loan borrowers have been either delinquent or have defaulted on their loan payments.

While campaigning, Democrat presidential candidate Joe Biden vowed to implement student loan relief. Under Biden’s plan, $10,000 of outstanding student loan debt would be forgiven for all borrowers. In sum, Biden’s plan would only wipe out roughly ⅓ of total student loan debt. On top of that, the presumptive president-elect’s plan would slash the repayment percentage from 10 percent to 5 percent of discretionary income for individuals making $25,000 annually or more and would also defer payments interest-free for low-income earners — individuals making $25,000 and lower.

We should always be skeptical of government programs that sound too good to be true. None of these plans are “free” in the way that many progressives market them as. SchiffGold spells out what the real costs of student loan forgiveness entails:

It’s important to remember that student loan forgiveness doesn’t mean Joe Biden just waves a magic wand and erases the debt. The federal government backs these loans, but private lenders actually made them. The lenders will get their money – courtesy of Uncle Sam. In effect, the federal government will have to borrow the trillions of dollars necessary for student loan forgiveness and add it to its $27 trillion debt. In other words, the debt will simply be transferred from the student-borrower to the American taxpayer.

This is relevant at a time when a number of elected officials such as congresswoman Alexandria Ocasio-Cortez are pushing for student loan forgiveness, with other Democrats jumping in to set the agenda straight in the first few months of a presumptive Biden administration. Such a policy would be a subsidy to colleges and put many hard-working Americans on the hook for the decisions of people who likely did not exercise prudence when selecting a major.

Student loans are just another in the long line of spending items that the U.S. government splurges on. The consequences of such irresponsible behavior are far-reaching and could generate a massive fiscal crisis. With the U.S.’s easy money system already in place, another large spending program will only accelerate America’s fiscal and monetary demise. Other alternatives such as seizing and taxing university endowments, make more sense than bailing out universities and students who chose questionable majors. However, politicians will likely ignore these tough policy alternatives.

Immigration

Mara Elvira Salazar is No Friend of America First Nationalism

Republican leaders would be wise to ignore all of her political advice.

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If there’s one Republican leader that young activists should never listen to, it’s Florida Congresswoman Maria Elvira Salazar. 

Salazar, who is a Cuban American, has been an outspoken advocate of loosening U.S. immigration laws. In fact, she even confronted known immigration hawk and key Trump adviser Stephen Miller at a Republican Study Committee weekly lunch on February 24, 2021. She specifically criticized Trump’s immigration message and demanded that the GOP be more inclusive in its outreach.

“I told him [Miller] that the GOP needs to attract the browns,” stated Salazar. “We, for the last 30 years since Ronald Reagan, have not sent the right message to the browns,” she continued. “Reagan was the last guy who gave a path to citizenship to 3 million people … 35 years ago. It’s time for us to do the same thing that Reagan did.”

Salazar doubled down on her pro-immigration message when she went on Larry Kudlow’s show on March 2 and declared that former President Donald Trump would have done better with Hispanics by advocating for looser immigration. Journalist Ryan Girdusky noted how some of Trump’s advisers were already pushing for amnesty lite policies:

Girdusky added that Salazar was rather unhinged in her criticism of Miller’s vision for the GOP:

Salazar made a lot of noise about the Hispanic vote, despite ignoring how Trump improved his Hispanic numbers between 2016 and his re-election bid in 2020 from 28% to 32%. And he did so without much Hispandering or campaigning on passing amnesty. 

The unsavory fact that the GOP consultant class and the likes of Salazar refuse to acknowledge is that the Black Lives Matter unrest alone likely pushed significant segments of the Hispanic population into the Democrats’ arms. BLM radicalism alienated Americans of all backgrounds., but Hispanics were not having any of this kind of ruckus. Even Hispanic Democrats, of all groups, largely supported strong military action during the riots.

In reality, Hispanic support for Trump is largely based on his bluster and political bluntness, which many minority groups find comfort in. 

However, Republicans like Salazar gets it all wrong by thinking that expanding immigration both legal and illegal is a key to the Republican Party success. The Republican Party will have to concede that they can make gains with Hispanics at the margins but they cannot expect to win the majority of the Hispanic vote due to Hispanics’ propensity to support many causes ranging from gun control to more government involvement in healthcare. Data from the Pew Research Center demonstrates these beliefs among Hispanics. Nevertheless, there are some avenues for outreach with this demographic  but they must be done right. 

The key for Republican success is the white working class voters, which played a crucial role in putting Trump over the top in the Midwest back in 2016. These voters are not the most reliable in terms of turnout, but they comprise a vast segment of the American electorate. Any candidate who can activate them could potentially build a hegemonic electoral coalition for years to come. The goal for a sane Republican campaign is to maximize turnout and support among the WWC. 

Such inroads with WWC voters are more important than meeting a diversity quota the likes of Salazar and naive Republican strategists would like the party to pursue. Any nationalist campaign worth its salt would be promoting the following: Infrastructure projects targeting the Midwest, the restriction of both illegal and legal immigration, and re-shoring programs to bring jobs back. 

On the other hand, following Salazar’s program is the way that the GOP will become irrelevant and alienate many WWC voters who are already on the fence with regards to the Republican Party. These voters are not going to gravitate towards Republicans just because of the “R” next to their name. They still must be catered to and pushing for amnesty is one way to turn working class voters off.

Under Salazar’s watch, the GOP will simply be going back to the politically correct ways of the Bush administration. To tap into the sleeping giants that is the WWC, Republican leaders should ignore everything Salazar has to say and get fully behind nationalist policies such as immigration restriction, infrastructure development, and re-shoring. 

 

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