Don’t resent what others getBy JACK RYAN ENTERPRISE JOURNAL,
Here’s a good question to explore: A week ago the Morehouse College commencement speaker promised to pay off all of the Class of 2019’s student loans. Was this fair to the families who made the necessary sacrifices to make sure their children graduated without debt?
Michelle Singletary, a personal finance columnist for The Washington Post, discussed the topic last week. Her advice was somewhat biblical in nature, suggesting that people shouldn’t be envious about the good fortunes of others.
“The penny-pinching parents wonder where’s their reward for driving their cars until the vehicles have to be pushed off the road,” she wrote. “What do they get for forgoing expensive vacations so that they could put money in a 529 college savings plan, thereby eliminating or greatly reducing the need for them or their children to take out student loans?”
Put another way, is the amazing generosity by billionaire hedge fund investor Robert Smith effectively rewarding irresponsible financial behavior? After all, while plenty of college debt belongs to students whose families truly did not have the money for tuition, there’s no doubt that some of the loans got taken out by families who chose a bigger house and other nice immediate things instead of saving for college.
Singletary wrote that she understands that Morehouse parents who saved for their son’s $48,000-a-year tuition might be a bit wounded by Smith’s gift, which is meaningless to them because they had no student loan debt. But she points out that nobody could have expected this kind of graduation-day gift.
“Your saving and sacrificing doesn’t make you a putz,” she wrote. “It makes you responsible, and there’s so much reward in living within your means, including setting a good example for your children. Whether it’s a surprise gift from a billionaire or need-based aid given to some other’s person’s child, don’t resent what others get.”
Singletary’s view is the correct one. While this year’s Morehouse graduates literally struck gold, there are tens of thousands of graduates from other schools who finished college this month without a gift like Smith’s. Many of them are looking at years of loan repayments that will play a negative role in many of their job and family decisions.
Students who are leaving school this year with no loans to pay off are at a decided financial advantage. Their families did the right thing by figuring out how to pay for college without borrowing.
Smith implicitly recognized this when he announced his gift, which could total up to $10 million. If he thought the rising amount of student debt was no big deal, he could have made a large contribution to the school. Instead he recognized a problem and did something about it.
It may be true that the Morehouse families without the burden of student loans missed out on sharing in a huge gift. But their gift had been building for many years. The reward of producing a debt-free college graduate is immense satisfaction for a job well done.
Jack Ryan, Enterprise-Journal