In my last column, published here on October 12, I argued that our current student loan market is different from other types of loans. Unlike other loans, government intervention in the student loan market has distorted loan prices (interest rates) and quantities (funds available). This, I believe, is a major cause of the student debt crisis facing Americans today and is why I support the government cleaning up its own mess with debt cancellation.
But the administration’s current plan for debt cancellation is only a temporary solution. It’s a short-term band-aid in a bone-broken market that needs a long-term reset.