College debt repayment is the can that keeps getting kicked. It has been three years since the pause started during covid. Supposedly, this pause will end in September. Don’t count on it. As the election approaches, this hot potato will burn anyone calling for a restart to payments. Might as well offer an alternative approach. Let’s push a different plan and offer a one time tax on endowments to seed a partial forgiveness.

I’ve written on this before, but it is an idea for a Trump or RFK Jr to push. Tax endowments 25%, which at current endowment levels would yield $200 billion, and use that money to erase undergraduate debt. Means test it to not apply to individuals earning over X dollars. Universities can fundraise to make up for the hit. They ran up the costs. They can take the loss. Simple message.

This does pick winners and losers, and by focusing on undergraduate debt and limiting the amount forgiven, we can help more individuals while not handing money to high earners. Little discussed fact is that 54% of borrowers owe less than $20K. The overeducated, underpaid class are the whiners. Student debt loads hurt family formation? Cannot be for the 54% owing less than $20K, but the urban liberals will look for any excuse as to why they fail to reproduce.

The tax on university endowments can provide a significant influx of funds for a federal program dedicated to college debt relief. With over $800 billion in endowments held by U.S. universities, a modest one time tax could generate substantial resources. By utilizing these funds, the program can alleviate the burden on individuals struggling with student loan debt, providing them with relief and the ability to rebuild their financial futures. It also prevents the burden from being a taxpayer issue, focusing on taxing the very entities that jacked up expenses creating the problem. No one will restart payment with an election looming, and a villain must be created to pay.

Proper targeting of the debt relief program towards middle and lower-income debtors is crucial to ensure that those who need it most receive assistance. By employing income-based eligibility criteria, the program can provide aid to individuals with limited financial resources, helping them break free from the cycle of debt. Think in terms of a sales pitch to liberals: a targeted approach fosters social mobility, empowering disadvantaged individuals to pursue their aspirations and contribute to the economy more effectively.

The advantages to individuals in a higher inflation era are easy to imagine. This can be pitched as a way to help alleviate the stretched wallets problem. By reducing the college debt burden, the program would foster financial stability among millions of individuals. Reduced debt burdens also increase creditworthiness, enabling individuals to access capital and contribute to the economy through entrepreneurship and innovation. College debt relief leads to increased disposable income for individuals, which in turn fuels consumer spending. Reduced monthly loan payments allow debtors to allocate funds towards purchasing goods and services, driving demand and boosting economic growth. Increased consumer spending positively impacts various sectors of the economy, such as retail, hospitality, and entertainment, creating jobs and fostering business expansion.

A tax on university endowments, combined with a targeted federal program for college debt relief, presents a promising solution to the college debt crisis while generating widespread economic benefits. Everyone reading this knows though that with the universities being such an integral part of the system’s control and the Democrats in particular, this has no chance of happening. We will see more can kicking, some modified debt relief, inflation to make the values smaller in real terms and not a single university will suffer for their racketeering. If we have to rob a Peter to pay Paul, let us rob the Peter who robbed Paul.