The ideal state of capitalism is $0 labor costs, so: more's the better. Lots of Business majors and MBAs graduate from university under this orthodoxy every year, and have, for a long time.
This is true. My point though is based on what you said, should we forgive all debt? I would imagine you would not agree to that, so then we have to discuss the circumstances in which the government should discharge debt.
> Student loans that were basically stolen by fraudulent schools, such that the borrower gained no education they can use to possibly pay the loan back - who benefits from saddling them with that forever? Their only possible options at that point are to labor in poverty forever (the loan's still not getting paid back), or somehow take on more loans to try to get an education again, now slowly paying down two student loans instead of one. Who benefits here?
There's a bit to digest here. There are two considerations:
1. The student didn't gain education.
2. The school took loans they shouldn't have received on behalf of the students.
If we believe (2) is the crime, then we already have mechanisms to punish the school, liquidate them and make those who have been harmed whole again. I don't see why the government needs to be involved more than they already were (in giving the loans).
If we believe (1) is the issue, then this is something that's not unique to for-profit schools. Given it's a subjective sort of thing I imagine it would result in anyone who majored or something they don't feel was useful or receiving an education they didn't feel was "worth it" asking for loan forgiveness. That doesn't seem sustainable either.
Finally, if (2) occurred but the student did receive benefit, should the loan be forgiven? I don't know the answer but it's worth considering.
All of that aside, I agree with what I believe your point to be at the end. We shouldn't be forgiving companies that make bad decisions, either.
Student loans that were basically stolen by fraudulent schools, such that the borrower gained no education they can use to possibly pay the loan back - who benefits from saddling them with that forever? Their only possible options at that point are to labor in poverty forever (the loan's still not getting paid back), or somehow take on more loans to try to get an education again, now slowly paying down two student loans instead of one. Who benefits here?
In the end if lenders are somehow irreparably harmed by debt forgiveness in corner cases like this, perhaps they should be responsible and not issue loans to people who can't pay them back. It's always about "personal responsibility" until consequences come calling for financiers who make unbelievably stupid decisions and they want the taxpayer to foot the bill and bail them out.