Covid Presents Opportunity To Rethink Student Loans

This week’s Courier Herald column:

We’re now closer to the November election than we are to the moment when it became clear that the Covid-19 pandemic was not just an overseas problem but a domestic crisis.  While there will undoubtedly be revisionist history on the government response to protect our public health and economy, a charitable analysis would allow that it was a series of inelegant responses to a severe but largely unknown and even misunderstood threat.

We now know a lot more, but our responses – as individuals and at most levels of government –  remain clumsy and lack long term strategic thinking.  The proximity to the upcoming election and the “divided country” excuse have us playing small ball policy and hard ball politics.

Rather than continuing to pretend that many policy responses to Covid-19 aren’t purely political and that some will never let a crisis go to waste, it’s time to embrace it.  As of this writing Congress is negotiating yet another relief package that will create somewhere between one and three trillion dollars of debt out of thin air. 

It will be the latest in a series of short term economic sugar highs. Most of our structural economic problems will remain after this measure is passed, and it is possible new ones will be created.  The door has been left open for this process to be repeated several more times – each with yet another short term fix financed by long term debt.

We should demand better.  We’ve been conditioned to expect less.

Instead of accepting more of the same, it’s time to put issues and policy back into the discussion before our election – now less than 100 days away.  We’ll start here, with a broad strokes approach to address the failure of our country’s approach to higher education and career training, via the lens of Covid-19.

Even before the pandemic, our country was not producing enough healthcare professionals to meet the growing demands of an aging population.  According to the Metro Atlanta Chamber’s latest workforce talent assessment, the demand for healthcare professionals with bachelor’s degrees was over five times the number of graduates during the previous year.

We aren’t growing the number of doctors, nurses, and other healthcare professionals to meet normal demand.  It’s not surprising that policy makers took unprecedented steps to close parts of the economy when presented with evidence of a growing pandemic.  Supply chain problems of PPE and medical equipment can be fixed relatively quickly.  Training new doctors and nurses takes years, and we started behind the curve.

Meanwhile, we’ve allowed student loan debt to grow to over one trillion dollars outstanding.  Too many students were allowed to borrow too much money to pay too many institutions to provide too few marketable job skills.

There is no accountability in this current system.  Universities now have an incentive to maximize the number of students.  Students have few restrictions on borrowing, but later find it almost impossible to discharge the debt if their education is insufficient to get them a salary that will allow them to repay the debt. 

Washington should look to Georgia for the first step in this solution, at a program started under Governor Nathan Deal.  Our High Demand Career Initiative funds programs in our technical college system toward certificates and degrees for skills that employers demand. 

Practical nursing is one such program.  Georgia taxpayers will fund the education required to receive a diploma in this field, with no debt accumulated by the student.

The federal government should look at this program as the basis for student loan reform.  It could easily be expanded into a new program similar to the G.I. Bill.  If a student begins a medical career as a Certified Nursing Assistant, then federal stipends could be used to fund additional education for advanced degrees during or after the course of their employment. 

We could close the gaps in healthcare staffing while training a workforce with critical skills, all the while reducing the overall student debt burden that has become a drag on the economy.  It’s a narrow measure with big implications, focused on creating future taxpayers filling critical roles rather than the current system that prioritizes creating debt over job skills.