I sacrificed to pay off my student loans. That now looks like a foolish plan.

By Matthew Gagnon

Let’s start with the obvious: absolutely no one is happy about the current state of college affordability, and no one is happy with America’s student loan racket. 

No one. 

I don’t care what your political affiliation is, our system is broken and we all recognize it as such. When I left college nearly 20 years ago, I had accumulated roughly $25,000 ($37,925.76 in 2022 dollars) in student loan debt, which is, all things considered, fairly low.

When I started my career, I had moved to a very expensive region of the country and I made next to nothing at first. In my first several years, I took advantage of forbearance and put off repaying my loans for as long as I could. Once I did start repaying them my meager salary only allowed me to pay the minimum balance. 

Years went by, and even as my career grew more successful, I never really prioritized upping my payments. I always had other, more important priorities: saving for a home, paying for my children’s activities, getting a better and more reliable car, and ironically trying to save for my oldest child’s college education. I always made my payments, but I didn’t choose to pay more than I really had to. 

Each year that would go by, the amount that I owed moved very little, if at all. As of a couple of years ago, my balance was still $20,000, even after well over a decade of repayment.

Now that is, of course, my fault. I delayed paying them back for years, and interest accumulated. Once I started, I paid the minimums. That kind of “strategy,” whether it is with student loans or credit cards, does nothing more than pile up interest and keep a person paying back balances for decades. 

That said, there really is something insidious about the idea that having paid on the loan for well over a decade, one’s balance would barely move. 

If you want to talk about a solid reform to the student loan system, build a universal zero-interest loan program or set a predetermined total interest amount to service the loan. That would do more good for the system than virtually any other idea I can think of.

In any event, my circumstances have changed slowly as I got older, and in recent years I have finally had the financial capacity to seriously tackle that debt. Through much sacrifice and planning, I’ve retired most of it. 

Instead of saving more money, I paid down debt. Instead of putting my extra money into my retirement fund, I paid. Instead of making investments that could gain me considerable income, I sunk what I could into loan repayment. Instead of going back to school, I spent my time paying back the debt I had from the first go-round. 

And now I find out that all my hard work and sacrifice was foolish, because President Joe Biden is canceling $10,000 of student loan debt for many people. Tough luck, Matt, you shouldn’t have tried to make good on your financial obligation, and instead should’ve spent all that money on other things.

The plan is, of course, terribly unfair. If you did what I did and responsibly sunk everything you could to finally make good on paying your bill, you look like a sucker now while others who chose not to do the same are rewarded. Citizens who made irrational and oftentimes insane financial decisions, like spending north of six figures for a degree that leaves you without marketable skills or job prospects, are getting partially rescued from their own terrible choices. 

And, if you are a taxpayer who never went to college, you are now paying for someone else’s college bill, even if they never even got their degree in the end. It turns out that according to a recent study by the National Student Clearinghouse Research Center, just 58 percent of students who started college in the fall of 2012 had earned any degree six years later. Yet all are eligible for forgiveness.

Worst of all, nothing about this plan for student loan forgiveness addresses the real elephant in the room: the ever-rising cost of college, and the government’s complicity in that trend. The current problem we have has not been solved, but has instead been left to fester.

Which begs a question: as this problem keeps getting worse, are we going to make this kind of forgiveness a habit? And if so, why should anyone, anywhere bother to try to make good on the debt they themselves agreed to repay?

Gagnon of Yarmouth is the chief executive officer of the Maine Policy Institute, a free market policy think tank based in Portland. A Hampden native, he previously served as a senior strategist for the Republican Governors Association in Washington, D.C.