Among the many reasons Democrats give for why people should have voted for Kamala or should vote for Bernie and AOC in the next election is the push for government student loan forgiveness—a prime example of how socialist policies end up being incredibly destructive and ultimately hurt the very people they claim to help. These loans aren’t truly “forgiven”—they’re simply shifted onto the backs of taxpayers, including those who couldn’t afford college in the first place or who already paid their own way through school.
The federal government began issuing student loans in 1965 and grants in 1972. At the time, average tuition at a public university was just $243 per year. By 1975, tuition had more than doubled to $510. Rather than making education more affordable, the surge in federal funding fueled massive price inflation and left future generations burdened with debt. Today, average tuition stands at $10,940 per year for in-state public universities and $39,400 for private colleges. The average student now graduates with $38,375 in debt.
As of early 2025, total outstanding student loan debt in the United States stands at approximately $1.77 trillion, including both federal and private loans. Leftist candidates—whether Biden/Harris, Sanders/AOC, or Tim Walz and any other socialist combination—want U.S. taxpayers to foot the bill for this massive debt. They argue that canceling student loans will help struggling graduates, but the real winners in this scheme are the banks.
Many Americans mistakenly believe that federal student loans come directly from the government. In reality, much of this debt originates from private, profit-driven banks, with the government simply guaranteeing repayment. These banks earn billions each year not only from interest—typically ranging from 4.99% to over 7.5%—but also from servicing fees. Estimates suggest that banks and loan servicers make over $10 billion annually from federally backed student loans.
In a functioning market, banks charge interest to offset the risk of default. But in this case, the risk is eliminated—absorbed by the government. This creates a massive distortion in the capitalist system, where banks are incentivized to issue as many loans as possible with no downside. Instead of evaluating credit risk, banks team up with “concerned” parents and “struggling” students to lobby the government for program expansion—so they can issue more loans, make more money, and pretend they’re the good guys with a heart.
Only select, government-approved banks can participate in this system, riding the federal gravy train. While the left frequently uses the word “fascist” as a slur, this setup closely resembles actual fascism: a system in which private corporations remain for-profit entities, but operate under government direction and benefit from state favoritism—so long as they comply with official policies.
This corporatist model also extends to universities. To remain eligible for student loan funding, colleges must comply with government-imposed standards on Diversity, Equity, and Inclusion (DEI) and other ideological criteria. In return, they receive a steady stream of federally backed student dollars. Since students are borrowing rather than paying out of pocket, they aren’t price-sensitive—allowing universities to raise tuition without consequence. The result? Tuition has skyrocketed, quality has declined, and both students and educators are worse off—while banks and universities rake in the cash.
Ironically, many teachers and professors—who tend to be left-leaning Democrats—support the very system that exploits them. College tuition economics simply don’t add up, and the university lecturers advocating for this model are often its biggest victims. The average annual tuition in the U.S. is $10,940 for in-state public universities and $39,400 for private colleges. Yet more than half of all college instructors are part-time employees with no benefits, earning just $3,500 to $5,000 per course. With a maximum teaching load of four courses per term, their annual income typically falls between $28,000 and $40,000. This raises an obvious question: where is all the tuition money going, and why can’t these costs be lowered?
The common argument in favor of free tuition or free college education is that an educated population benefits the country. While that’s true to an extent, a more accurate and practical goal would be to develop a population trained to perform useful work—work that contributes to overall well-being and raises the standard of living. Framed this way, it makes far more sense to encourage vocational and professional studies rather than mass-producing degrees that offer no clear path to employment.
The earning potential in practical fields underscores the point: engineers average around $90,000 per year, doctors over $200,000, nurses about $85,000, financial analysts approximately $95,000, IT professionals $109,707, IT engineers $89,746, and accountants about $77,000. Yet nearly 40% of students choose degrees with little to no clear career path—leaving them saddled with debt and limited earning potential.
Now add to this the fact that Democrats want taxpayers to wipe out everyone’s student loans. There’s already no justification for this level of debt, especially considering that tuition remains sky-high despite decades of grants and government subsidies to universities. Professors and academic advisors routinely guide students into low-demand fields, making their debt even more crippling.
And in typical socialist fashion, Democrats insist this would be a one-time debt cancellation. But that makes no sense—new batches of students begin college and borrow money every year. Do Democrats not care about them? Logically, the only “fair” outcome would be to keep wiping out student debt for every new generation, indefinitely. That effectively means taxpayers covering tuition costs for 100% of the population.
And with the government picking up the tab, there would be nothing stopping universities from doubling or tripling their fees. The banks would profit, the Democrats would congratulate themselves for “helping” the common man, and those crushed by higher taxes would be offered government welfare—funded by even more taxes on those foolish enough to continue to work and pay taxes.
