Need a Student Loan?
Boy, does Uncle Sam have a deal for you.
Aug 3, 2009, Vol. 14, No. 43 • By ANDREW FERGUSON
How great their struggles were, and to what extent the struggles were aggravated by college-loan payments, are open questions. From the time they left their money-making days behind, according to tax returns, the Obamas never had a combined yearly gross adjusted income of less than $207,000. Usually it was much more. (During those years in the helping industry, the Obamas donated 0.9 percent of their income to charity, presumably because, as the old saying goes, "we gave at the office.") By 2005, Mrs. Obama alone was making $315,000 a year as an industrial helper, directing "community affairs" at her hospital. Except for the bad timing, she could have had her loan debt scrubbed by President Bush's program.
One justification for the program is that people in the helping industry need the financial help, because of their low pay. But most people would consider the Obamas' income pretty good money. It turns out that public service, even strictly defined, doesn't necessarily require financial sacrifice. Neal McCluskey and Chris Edwards, of the libertarian Cato Institute (one of those public-serving nonprofits), have tried to show that government work, including public school teaching, compares favorably with work in the private sector, whether you count wages, benefits, or both. Using data from 2004, Edwards found that the average federal worker earned an average of 56 percent more than the average employee in the real economy.
So if public servants don't need their loans forgiven any more than do debtors in the private sector, what's the point of the Public Service Loan Forgiveness Program? Why provide an incentive for graduates to steer clear of the private workforce? Mrs. Obama's remarks capture the spirit behind the program. The implication isn't merely that nonprofit jobs are admirable. It's that they're always and everywhere more admirable than jobs in the world of commerce.
The logic closes like a pincer: The only loans available to students will be from the government; and the only way to get the most favorable terms on the loans will be to do what the lender likes. Of course, you don't have to work for Greenpeace or Amnesty
International or AmeriCorps. But if you don't, you'll pay every penny of your student loan, plus interest, while your friends who made the right decision won't have to do that. No one's making anyone do anything. It's not a threat, it's a nudge. It's not an ultimatum, it's a suggestion. And it's certainly not bullying. Bullying is about to be made illegal.
Andrew Ferguson is a senior editor at THE WEEKLY STANDARD.