When the Joe Biden administration announced a comprehensive plan to forgive student loans, the public outrage was palpable. Although only a slight haircut for the government, conservative literati fretted that forgiveness was unfair both to students who repaid their loans and to the taxpayers, who derived no benefit from the Educational Industrial Complex. With Trump 2.0, student loan “forgiveness” may quietly return to its status quo ante. Viewed “under the aspect of property rights,” however, the repayment of student loans would be neither just, nor advance the cause of establishing a libertarian society.

In For a New Liberty, Murray Rothbard demonstrated the feasibility of erecting a just society based on absolute individual property rights. Parsing Justice Holmes’s famous dictum, Rothbard posited a two-step process for resolving social conflict: identify the property under dispute and determine whose rights are at stake. In 2022, Wanjiru Njoya modeled Rothbard’s method to identify “the normative values that should underpin the law” of land ownership. A property rights analysis likewise provides normative guidance for the student loan conflict.

In conclusion, having identified the real property and its rightful owners, it is clear that universal default on government-issued student loans would be the most libertarian course of action. Libertarian policies increase individual utility and diminish the interventionist power of the state. Any policy that allows government to pilfer property from the private sector will necessarily circumscribe individual action, draining resources from the individual that then further empower the interventionist state. Under the current state of intervention, default, by contrast, would keep more economic power in the hands of individuals, enhancing the utility of all with increased opportunities for voluntary market exchange.

Besides enhancing individual utility and free markets, universal student loan defaults would signal a manifest victory over a Leviathan predatory state that can—in the words of Alex Pollock—simply “print power.” Observing, in the sixteenth century, that all governments rule by consent, Étienne de La Boétie argued a tyrannical state could be “automatically defeated if the country refuses to consent to its own enslavement.” Default would show that the individual does not consent to the illegitimate appropriation of his property. Ultimately, as La Boétie observed, individuals always have the power to overthrow governments because, “by ceasing to submit,” they can, at any time, choose to “...put an end to their servitude.”