By Guy Page
Senator Bernie Sanders says America has a student debt crisis. He’s right about that. Forty-three million Americans owe student loans. About 76,000 Vermonters have them. Many borrowers are struggling, and some face higher monthly payments starting tomorrow, July 1 as changes to federal repayment programs take effect.
Sanders recently held a Senate roundtable featuring borrowers from Vermont, New York, Ohio and Pennsylvania. He argued, “In the richest country in the history of the world, people… should not be saddled with a lifetime of debt or be pushed into default because they can’t afford their payments. We can do better. We must do better.”
The first minute or so of this video from the roundtable gives you an idea of how Sanders sees this situation. The first person he speaks with is a low-earning para-educator named Sarah Bundy.
The other stories were equally compelling. Jordan Imhoff of Hyde Park, a veteran, husband, father of two, and mental health provider, described the uncertainty facing borrowers. Nurse Alex Watts worried that larger loan bills would make it harder to provide for his family. Geraldine Hawkins, now 71, said she’s still paying for her education decades later.
Those are real people facing real financial stress. Their stories deserve empathy. But public policy isn’t made on emotion alone.
And it’s important to note that Sanders – here anyway – isn’t talking about total loan forgiveness. He’s outraged about a subsidized repayment plan called the SAVE plan that was cut out of the One Big Beautiful bill. Anyone currently enrolled in the SAVE plan will need to take immediate steps to enroll in another student loan repayment plan by July 1. After tomorrow, SAVE borrowers will have limited time in which to switch plans, and will have fewer repayment options.
Looking beyond the narrow political focus that Sanders is just shilling for college student and graduate votes to get Maine Senator Graham Platner elected, this issue really is about a national spending policy that’s fair to everyone.
But here’s where many Vermonters part company with Sanders.
Because the question isn’t whether some borrowers are struggling. The question is whether taxpayers who never borrowed for college—or who worked multiple jobs to pay their own tuition, or who already sacrificed to repay their loans—should now be asked to pay someone else’s bills.
Nearly two-thirds of Americans do not hold a bachelor’s degree. Many are electricians, truck drivers, mechanics, factory workers, farmers, and small business owners. Should they be taxed to reduce or even forgive debts held disproportionately by people who, statistically speaking, will earn hundreds of thousands—or even millions—more over their lifetimes because of their college education?
That’s one reason critics call mass student loan subsidies regressive. Higher-income households generally hold more student debt because they attended college and graduate school in greater numbers. Much of the financial benefit would flow to people with the greatest lifetime earning potential.
Then there’s the price tag. Depending on the proposal, broad student debt reduction could cost taxpayers anywhere from hundreds of billions to well over a trillion dollars. That’s money that would either increase the national debt or require higher taxes.
And what about the colleges? If students and universities believe loans will eventually be forgiven, what incentive is there to control tuition? Sanders isn’t talking about that – no wonder because college educators are some of his biggest supporters. Critics argue that repeated bailouts simply encourage colleges to keep raising prices, making the next generation’s debt problem even worse.
But again, the biggest question is fairness.
What do we say to the plumber who never went to college? To the family that saved so their children could graduate debt-free? To the nurse who skipped vacations to finish paying off her loans? Or to the recent graduate who lived frugally to make every payment on time?
Do they get reimbursed? Or are they simply told, hey sucker you made the wrong choice?
Helping borrowers in genuine hardship through targeted repayment plans or bankruptcy reform is worth discussing. But the goal should be making higher education more affordable in the first place—not shifting yesterday’s bills onto today’s taxpayers while doing little to stop tomorrow’s tuition increases.