Every presidential campaign contains a share of pandering drivel. One idea that currently fits that bill is the idea of cancelling the roughly $1.6 trillion of outstanding college debt. I will explain why this is a bad idea, and outline some of the real problems underlying college costs. However, I must begin by noting that this is a ridiculously absurd and frankly immoral notion. In a marginally better world, its proponents would be laughed out of public life. Alas, this horrendously bad piece of public policy is at least moderately good politics. That is where I must begin.

Student loan debt comprises only 2.2 percent of all private debt in the United States. This is still a large number, some $1.6 trillion. Families who earn $100,000 or more owe more than one-third of all this debt. This fact alone frames both the absurdity and immorality of the issue. I am sure kids do not like to hear this, but every American college student is firmly in the global 1 percent, at least in terms of consumption. Moreover, a college degree confers an average of more than a million-dollar-lifetime wage premium to its recipient. As an individual financial investment, there is nothing even remotely as good as a college degree. People with college debt are almost exclusively rich or well on their way towards being rich. 

It is easy to find an anecdote of an unemployed and heavily indebted graduate with a master’s degree in puppetry. Poor judgment among college-aged students is neither a novelty, nor is it cause for a massive transfer of wealth from poor to relatively affluent citizens. In any other context, this proposal would be viewed as an immorally regressive tax, which it is. But, affluent college students vote, so burdening someone else’s children with their college loans is good politics, as surely as it is offensively immoral public policy. 

The discussion about cancelling student debt is also unproductive in that it masks some of the real problems that surround education policy in the United States. There are three big ones worth covering.

The first is that too few young people go to college. This is especially true for students from poorer households who go to college at a much lower rate than equally talented kids from richer families. Poor kids are unlikely to benefit from the forgiveness of college debts. To expand college access, we need to make it less expensive up front, which requires more public investment at the front end of the college experience.

The second problem is that most of the increase in college costs is not tuition, but fees, room and board. Competition for a smaller number of students has left colleges and universities scrambling to provide luxurious amenities. Some readers might be surprised to learn that both Purdue and IU have dorms with granite countertops, and sushi is available at most of Indiana’s state university dining facilities. The simple fact is that most student loans subsidize lifestyle, not learning. Without subsidized loans, college dorms and dining facilities would be a lot more austere, which just might increase time to graduation. 

Third, most of the tuition increases at American universities are due to decreased state spending on universities. In inflation-adjusted dollars, Indiana spends less on higher education now than in 2010. This has helped reduce the share of Hoosier kids heading to college, which will punish our economy for decades to come. Lower state spending also incentivizes universities to change their admissions focus away from in-state students to out-of-state students. Indiana schools are especially good at this. In the decade ending in 2016, 73 percent of Indiana’s college students were in-state. This dropped by five full percentage points in a decade. By 2030, less than two thirds of all college students in Indiana will be Hoosier kids. Today, for every 100 students Indiana sends to out-of-state schools, we import 260 students. This is the result of deliberate disinvestment in education. 

Finally, it is worth noting there is plenty wrong with higher education. Faithful readers will recall I condemned tenure while an untenured professor. Eliminating college debt will not fix any of the problems of higher education; it will enrich those least at need of public support. In fact, it is a ludicrously bad idea that should embarrass anyone who once thought it a good idea. That we are even talking about it is a deep condemnation of the current slate of candidates for the presidency. In a world full of tangible challenges, the last thing we need is a presidential election between pandering demagogues, and an electorate that absorbs their nonsense.