116 3rd St SE
Cedar Rapids, Iowa 52401
A lot of people are agitated at President Joe Biden’s decision to forgive up to $20,000 in student loan debt. Republicans assailed the plan as an unwarranted gift to lazy college grads who took out loans to major in, as Colorado Rep. Lauren Boebert put it, “lesbian dance theory.”
Some progressives argued it doesn’t go far enough. Some Democrats tried to gingerly tap dance around the controversy. Others pointed out that Biden’s action does nothing to address the underlying issues that make college so ridiculously expensive. They’re right.
My loans were paid off by the United States of Mom and Dad. I was lucky, and am in no position to judge people who lack those resources. Besides, I’ve covered economic development for much of my career. When the government hands out money for some sort of desired economic outcome, I don’t get too worked up.
Local and state government in Iowa routinely hand out pricey incentives to Iowa businesses looking to expand, new businesses considering moving in and development projects aimed at providing jobs, housing or entertainment amenities.
There are tax breaks and credits and forgivable loans. If the business or developer lives up to their promises of job creation, etc., the loans go away. Sometimes the goal posts are moved if the business or developer runs into unforeseen problems. Regardless, the deck is stacked in their favor. There are corporate tax credits that never go away.
Iowa is also a state where agriculture is the beneficiary of many government actions meant to keep farming profitable, or at least stable. The state provides generous sales tax breaks on products farmers need to farm, not to mention shielding farmers from environmental rules. The degradation of water quality is a bill we all pay.
The federal government subsidizes crop insurance and has created a mandated market for corn-based ethanol. Companies pitching carbon capture and storage pipelines to boost ethanol’s reputation as a green fuel are counting on billions of dollars’ worth of federal tax credits.
So against that backdrop of government giveaways, I see student loan forgiveness as micro economic development. Students are receiving government aid to make their own economic expansion project, namely their lives, more affordable, potentially profitable and stable. That’s what we do for large companies, developers and farmers.
What Iowa isn’t investing in is higher education. Iowa’s three state universities have been receiving stagnant state funding for years. The University of Iowa, for example, is getting less state money for its operating budget now than it did in 1998. In 1981, state bucks accounted for 77 percent of general university funding while tuition made up 21 percent. Now, state funding makes up 34 percent with tuition covering 60 percent. Tuition increases have made college less affordable.
Republicans who chide Biden for doing nothing about the core issues behind college debt might try investing in our state universities to lessen some of the pressure on tuition costs.
But that doesn’t fit the narrative. The GOP is determined to portray this as good working people having to pay for the misguided academic dalliances of woke libs. Universities and colleges are the enemy. The truth is some of the hardest working people took on lots of college debt, nurses, teachers, entrepreneurs and, yes, farmers. And debt is holding them back.
Sure, helping them won’t allow any politicians to pose with a shovel or with an enormous pair of scissors. But it’s an economic development investment just the same. Biden’s plan has flaws, but we’ve thrown public money at far worse ideas.
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