Just a little math...
There's about $900 billion in US student loan debt outstanding. So to forgive it all and not crater banks and holders of student loans, the government (taxpayers) will need to pick up the tab. If enacted next year, it does nothing for the $95 billion of student loans that will be made each year thereafter. So to make those "free" as well, we're talking about another entitlement program roughly a quarter the size of medicare. Not to mention, since Obama and Co. have nationalized the student loan industry (directly causing about ten thousand job losses with one swoop of the pen), you will have a single funder of college tuition. Not that it bothers me to see the liberal bastions of miseducation hurt by the deal, but it's not capitalistic, and therefore not optimally efficient. The government will put caps on what Harvard, Yale, etc., can charge kids, which in turn will decrease the amount of capitalism and funding for colleges. This will lead to a decrease in quality. Further, if education is free and guaranteed, there will be more enrollment pressure creating a demand for more teachers that cannot be paid because of caps on tuition. Like public schools, you'll then have the lowest qualified citizens signing up to be college professors. Money for research, which used to be footed by the capital markets, will be decreased when provided by government, which will no doubt have to triple or quadruple the size of the DOE to manage such a program. Could be looking at an entitlement program half the size of medicare by the time you're all finished. Genius.
By forgiving all current student loans, a dozen or so extremely large companies and 1,000 or so medium and small businesses will go under immediately, because all they do is student loans. Add a few thousand jobs from collection agencies that collect student loans from students who don't repay. Call it an easy 40,000 people unemployed on day one. Even if these companies are reimbursed for the forgiven loans, most all of this money would flow through to the investors (who are in large part big banks) because most student loan companies finance student loans with term debt.
Then there are the investors and non-bondholding creditors in these companies. They bought stock in SLMA, for example and SLMA stock will essentially go away (what's left of it anyway).
More enrollment pressure means people will attend college that have no business attending college. This is a waste of resources. To me, there's nothing wrong with being a welder or electrician. If you work hard at those professions, opportunity currently exists to still make a lot of money (and there's 100s or 1,000s other professions that don't require a college degree that provide this type of opportunity to someone willing to work very hard).
These people simply want their debt forgiven and I can guarantee you they don't give a flying rat's ass about future students or the taxpayers and job losses that would result. It shows how absolutely selfish these people are, how stupid they are, and how they completely lack any forethought or broader consideration ability.
