A Smart Nation Invests in Itself

Forgiving student loan debt is not charity. It is a nation investing in itself.

Zachary Wright | Contributing Editor

Imagine two hypothetical countries.

Both countries want similar things. They want a strong economy built upon strong job growth, consumer spending, and technological advancement. They want a powerful military with the most up to date capabilities. In short, both countries want to become wealthier, smarter, and stronger.

However, while both countries want similar things, they differ strongly on how to go about attaining these things.

One country understands that a necessary ingredient to a growing economy, military, and technologically advanced society is investing in itself through the development of its citizens. This country therefore incentivizes and invests deeply in the education of its people. As such, vocational education, as well as so-called higher education classrooms, swell with ambitious young people eager to begin their careers, develop their crafts, widen their knowledge base and ready themselves to either be a valuable highly skilled worker or create the new innovation the country needs to maintain its prosperity and position in the world. 

The other country views the education of its citizenry not as an investment to maximize, but as a wasteful expenditure to minimize. This country’s citizens, without the incentivizing support of their government, either shoulder the economic burden of education, or forgo education altogether. The result is an overall lower level of educated citizenry: it’s a combination of those that are educated either saddled with crippling debt, thus inhibiting their ability to stimulate further economic growth, and those that are not educated. The latter are incapable of either competing for highly skilled work or creating the new innovation the country needs to maintain its prosperity and position in the world. 

Now, consider. In twenty years time, which country will be wealthier, smarter, and stronger? 

The one that invests in itself.

The United States of America is, infuriatingly, the latter of the two countries described above. Consider the following data points from the Education Data Initiative. 

• Forty-three million Americans have student loan debt — that's one in 8 Americans (12.9 percent) 

• The average federal student loan debt is $36,510 per borrower

• Private student loan debt averages $54,921 per borrower

• 20 years after entering school, half of student borrowers still owe $20,000 each on outstanding loan balances.

This is not what a smart nation does. A smart nation does not dis-incentivize its citizens from educating themselves by saddling them with debt that further prevents them from contributing their wealth to the larger national economy. It just doesn’t make sense.

Think of it another way. According to the NY Times …

[T]he Education Department is functionally the country’s largest consumer bank, holding more in loans than Americans owe on any consumer debt other than mortgages.

This is precisely the root of the problem: the commoditization of education in America has warped how we view the purpose of education. 

When a nation views education not as an investment in its citizens, and therefore in its own long term future, but rather as a marketable good to be sold to its citizens to fill that nation’s treasury, it will not be long before that nation ceases growing, stagnates, and declines.

Forgiving student loan debt is not charity. It is a nation investing in itself.

It is what a smart nation does.