by Davis Russell
When it comes to the positions that the different political parties have taken on the subject of the student loan crisis, a lot has been written about what the Democrats and the Republicans believe. But what about the views of smaller political parties?
The Libertarian Party has had differing views on student loans over the years, but they have tended to have a common thread. Libertarians pride themselves on promoting things like laissez-faire capitalism and believe that a government should intervene as little as possible in the lives of it’s citizens. For that reason, their policy positions generally tend to focus on less government interference and fewer social programs. It’s not surprising that there isn’t a lot of support the expansion of federal student loans within the party.
In both 2012 and 2016, Gary Johnson was the party’s presidential nominee and ran on a platform that was culturally liberal, but very fiscally conservative. To understand how the Libertarian Party feels about student debt, it’s important to look at Gary Johnson’s platform and comments during the 2016 election
College Tuition and Student Loans
Johnson stated on numerous occasions that he believed that college costs are high because the government guarantees student loans and talked about potentially cutting federal student loan funding in order to lower the cost of education. Unlike other parties, he believed that college shouldn’t be free and that states and not the federal government should be responsible for deciding how much to subsidize educational costs.
When it comes to the belief that student loans inflate college costs, this is actually a common argument called the Bennett hypothesis after Ronald Reagan’s Secretary of Education William Bennett who first articulated it. He believed that since the government guaranteed student loans to anyone who needed additional funding to attend college, this encouraged colleges to raise tuition prices.
Because of increased availability of student loans, more students had the funding necessary to go to college and that led to less competition between schools to offer lower tuition prices to attract more students to attend their school. Since all students had access to a larger amount of money to pay tuition than they would otherwise have, the schools were no longer competing on the basis of cost. That led many schools to invest in more services, better academics, and more amenities in order to convince the best students to attend their school and all of those investments increased tuition prices.
This hypothesis has been supported in part by a report from the Federal Reserve Bank of New York that noted that sticker prices for colleges increased significantly when subsidized student loans increased. By cutting back on or completely eliminating the federal student loan program, Johnson and Libertarians might believe that by taking government out of the equation, colleges will have to compete for students once again based on the cost of tuition and that that would drive tuition prices down.
Reducing Interest Rates
During the 2016 race, Johnson said that he would consider reducing student loan interest rates if he was elected president. He talked about how he believed that borrowers who graduated with significant student loan debt had been disadvantaged and that he would be interested in seeing if there was a way to help them repay their loans by lowering interest rates.
This, however, seemed to many to be in opposition to what Johnson had previously stated about student loans and also at odds with the Libertarian philosophy. That led to some commentators suggesting that this change of position might have been an attempt to lure former Bernie Sanders voters to his camp.
The Party’s Platform Unclear
While the Libertarian Party’s platform on student loans hasn’t been clearly defined, one can assume that going forward it will be consistent with their desire for less government intervention. That means that there will likely be little appetite for things like expanding federal student loans, forgiving student loans, or offering free tuition. If the Libertarian Party were elected, they might instead favor cutting back, reducing, or eliminating student loans to allow the free market to reduce college tuition prices and make college more affordable.
author bio: Davis Russell is a freelance journalist focused on student loans and higher education.