Joe Biden continues wiping out student debt. I could talk about the legality of his actions but something more fascinating has happened in the last few days that caught me off guard. This action has created more debate by those who favor it and those who do not that I have seen from almost any other issue.

Every time the concept of cancelling student debt has been brought up, those who oppose it have been fairly vocal. The majority of comments are something along the lines of why should someone else pay for your student loan or my mortgage identifies as a student loan or let's cancel medical debt first. This time, those who will benefit from the program have been quite vocal in responding. It has revealed their ignorance in many cases but also a great of relief at having their financial burden eased.

I understand the feeling of having this that hanging over your head being reduced or removed completely. I have had conversations with several people who are normally support individual responsibility on these types of issues but because they benefit directly, they are making an exception. Some do so knowing the negative consequences to our economy, while others don't believe there are any consequences. Maybe those in the latter category should ask for their money back as their institution of choice failed to educate them.

Let's be clear, you made the choice, you should bear the consequences. That is a principle that can often be difficult to adhere to but nonetheless it's a principle that should guide your life and those decisions that you make. If others want to help you soften the negative or difficult effects of that decision, they can make that choice. But maybe you should have been more aware or thought more about the consequences of your actions before signing on the dotted line.

I have heard too many people say that no one else is going to pay for the debt that is erased. Clearly they were never taught about the economic principle of TANSTAFL: there ain't no such thing as a free lunch. Since the federal government now finances the student loan program, the $300 billion price tag will add to the federal deficit and must be financed by selling bonds, bills, or notes. The universities certainly aren't going to return any of the money they charged. So the American taxpayer will have to pay off the money the federal government has to borrow. That means that we the taxpayers will be the ones repaying the debt.

I have even had half a dozen people tell me that no one has to pay this off because all the federal government has to do is print more money. They believe that if the government just prints the money it has no negative effect upon the economy and that you and I don't have to pay back any federal debt. If you point out the current state of our economy, including runaway inflation, due in large part to the federal government printing money and using it for stimulus, they don't seem to see the connection. Erasing this debt is akin to the government pumping money into the economy which will increase inflation. That means we will be paying back more than what was borrowed and owed.

Someone close to me even made the comment that "if you think the $4000 I owe is going to break the bank, then you aren't paying attention." No, you are not paying attention to the bigger picture. When you add everything together this is a $300 billion payment that the American people will be forced to pay. It doesn't matter if you owe $4000 or $400,000, what matters is how much is on the tab at the end of the day.

What most people are ignoring, as usual, are the underlying causes of the massive amount of student loan debt—The federal government takeover of the program and the colleges and universities that continually raised tuition because of the availability of "easy money."

Prior to the government mandating terms of student loans, which began under Bill Clinton's watch and was ramped up by the Obama administration, students could go into the private market and get a loan on what were very favorable terms. Many students were charged between 1 to 2% interest while they were attending school or had their deferment after graduating. Upon graduating, the bank increased the interest rate to be more in line with current market rates and taking into account the borrower's creditworthiness.

After the federal government began mandating equality in all aspects of the student loan program, interest rates begin to increase. There was still a lower interest rate while you were in school, but it was more along the lines of three to 5% interest. After the Obama administration completely changed the program, students are now being charged 8% or more and the rate while they are in school is not less than the rate after they graduate, in most cases. That means the interest on the amount borrowed builds much more quickly.

Turning to the universities and colleges, market forces were taken out of the equation. Certainly, students are more willing to pay for an education that they perceive to be of a higher quality or in a field that will allow them to earn a higher salary upon graduation. But all things being equal, once the availability of student loans became virtually unlimited, the educational institutions began raising the cost of getting an education exponentially.

The cost of a college education, a four-year degree, is 37 times higher now than it was in 1963. For the decade from the year 2000 to 2010, that cost increased 4.63% per year. Inflation over that same time in the general economy grew at an average rate of 2.59%. From 2010 to 2020, the cost of a four year education across all types of institutions grew at an average rate of 7.8%. Again, the inflation rate over that same period was 2.59%.

All of that money pumped into the pockets of the students, although it was never in their pockets for long, caused universities to increase tuition. We saw the same phenomenon right after the Inflation Reduction Act provided tax breaks for the purchase of certain EVs. Ford and General Motors immediately increased the price of all EVs under $55,000, making it more expensive to purchase a lower end EV. In fact, Ford raised the price of their less expensive EVs by $8000, offsetting the $7000 tax credit in the bill.

It is obvious, this move is being made to attract voters back to the Democrat party. It's also obvious that the federal government will not do anything to help ease the burden or cost of a college education. Many of them, like Elizabeth Warren, benefit from universities being able to pay someone $300,000 a year to teach a 3 hour class once a week. What we have to hope for is what we are hoping for almost every week when I write this column: the American people wake up and vote out the career politicians.