For the past decade, I have heard numerous estimates of the financial burden to taxpayers of the federal student loan program. One friend important in the Department of Education used to tell me that the student loan program made money. The federal government borrows by issuing bonds at some extremely low interest rate, say two percent, and then lends that money to borrowers at a much higher rate, say five percent. The “net interest margin” (using banker’s lingo) of three percent covers all the expenses associated with the loan program, and, it was asserted, somewhat more. Advocates of the program argued that the high credit rating of the richest government in the world helped millions of struggling college students by providing loans to students at interest rates unobtainable privately.

Over time the near $1.6 trillion burden of student loans, plus large number of borrowers who either failed to graduate or who were “underemployed” in low paying jobs led politicians to promote easing the burden of paying back loans, most notably by moving to income-based repayment plans. Student payments were capped at a percentage of one’s income, and if, after a number of years full repayment had not occurred, the remainder of the loan was forgiven. In the last year or so, new estimates emerged, now suggesting losses from the program were in the tens of billions, a notable sum even in Washington.

Consultants hired by the Department of Education recently provided a still newer loan loss estimate: $435 billion, roughly a $5,000 average debt burden for every family of four (accepting Abraham Lincoln’s proposition that government is of the people, by the people, and for the people). It is also more than 80% of the amount of loan losses to private lenders from subprime mortgages during the 2008 financial crisis, a loan loss contributing importantly to the Great Recession.

The consultants estimate that about one-third of the more than $1.3 trillion loan obligation to the Feds (there is additional private loan debt) will not be repaid, either because of loan forgiveness arising from income repayment plans or from default. To be sure, there is some murkiness about the estimates, which are not annual losses but a statement of total lifetime losses associated with the program. I agree with Beth Akers of the Manhattan Institute who was quoted in Inside Higher Ed showing considerable skepticism toward any precise estimate of the losses, some of which lie in the moderately distant future. Nonetheless, it is pretty clear that to some material extent, the federal student financial loan programs are a burden on the American taxpayer.

Soon we will have President Joe Biden, who has advocated forgiving large amounts of student loans. If as one campaign promise indicated, $10,000 in loans are forgiven to more than 40 million borrowers, that alone will be $400 billion or so in debt that the taxpayers will absorb. But the reality is that a majority of the debt is owed by persons borrowing large sums of money, very often for graduate or professional school, a large portion of whom are living in affluent zip codes earning big salaries from jobs acquired after acquiring loan-assisted M.B.A., law or medical degrees. Blanket full loan forgiveness does not benefit mainly the poor and downtrodden, it disproportionately helps golf-playing purveyors of white privilege driving nice cars, certainly not Biden’s favorite constituency.

There are other issues: moral hazard and horizontal equity are two. If you forgive loans to millions of Americans, why would any sane person borrow federal money to go to college and then ever pay it back? If loans become gifts, why repay them? And isn’t it grotesquely unfair to have millions of conscientious Americans scrimp and sacrifice to repay their loans while others have bought nice cars, taken cool vacations, etc., letting their loan debts accumulate, only to have them forgiven by the government? What a message: you are suckers if you honor your obligations and repay money as promised!

Why do we even continue a program responsible for the tuition explosion that led to this huge debt in the first place and has utterly failed to accomplish its main goal: make higher education more accessible to the American people.