A trendy idea circulating on the political left is student-loan debt forgiveness. For some graduates and non-graduates, student loans are, indeed, onerous.

The proponents are missing a fundamental ethical issue that business majors, in particular, should understand: YOU SIGNED A CONTRACT. Students and their parents sign contracts for student loans. The interest rates are often subsidized, and, in any event, given the Federal Reserve’s ongoing policy of keeping interest rates low, the terms are probably no more onerous than in the past.

Is it ethical to get legislators to write off your past debts? Many of us have been taught the prayer containing the phrase, “forgive us our debts, as we have forgiven our debtors” (sometimes “debts” is replaced by “trespasses”). In the here and now, however, honoring a contract is a fundamental requirement for ethical behavior. Assuming there was no fraud or deception involved, a contract is a contract. The alternative to honoring contracts is chaos and
wreaking havoc in the economy. Those who break contracts often face civil and sometimes criminal litigation.

Prominent Americans, such as Phineas T. Barnum (subject of The Greatest Show on Earth) and President Ulysses S. Grant even honored the debts or misdeeds of others with whom they were associated. Barnum emerged even stronger (he was a proponent of abolitionism, when such was a minority view) and would enjoy his greatest fame. Grant struggled to complete his memoirs, so he could resolve debts and secure his family’s finances. He did so, even though he was dying of throat cancer.

Student loan forgiveness is also unfair, as many parents have scrimped and saved to finance their children's education. One candidate apparently told an inquiring voter that there would be no rebates or succor for them. In other words, people who acted responsibly will be slapped in the face for their actions.

Teaching an entire generation that it is okay to skip the terms of a contract is unethical. If this generation ends up living in an economy where people feel free to abrogate the terms of contract, heaven help them.

The views and opinions expressed are those of the author and do not imply endorsement by the University of Northern Iowa.