Now that the Supreme Court has done as expected and shot down Pres. Biden’s loan forgiveness plan, this is a good time to review the arguments against this ill-conceived scheme.
It’s the furthest thing from progressive. On average those with four-year degrees earn $1.4 million more over their careers than those who didn’t pick up that paper. This would have been a massive wealth transfer from the less well-off to the much better-off.
It’s deeply unfair. How would paying off college loans be fair to those who didn’t go to college? Or to those who worked and saved or maybe didn’t go to their first choice school so that they could graduate without debt? Or to those of us who did take out a loan and dutifully paid it back?
It’s a solution in search of a problem. There is no student debt crisis. The average debt is about $30,000. That’s a good investment for a $1.4 million return. Also, keep in mind that at the UW tuition has been frozen for a decade. Had it kept pace with inflation tuition would be 27% higher today than it was in 2013. That’s a 27% discount on a great education.
It doesn’t solve any problem that actually does exist. While college is still a good deal and while the average student debt is a good investment, it’s true that college costs have been going up too fast. That’s mostly because there are too many administrative positions. But Biden’s plan did nothing at all to address the increasing costs of college.
What about next year? So we pay off people’s loans up until now. Next year a whole new crop of grads demands that their loans be forgiven. What do we do then?
It sends the wrong message about personal responsibility. If you’re in debt up to your eye balls and you’re an English major that’s your fault. You should have made better choices. Now you’ve got to deal with your own situation. Welcome to adulthood.
It sends the wrong message about taking responsibility. You took out a loan. You signed a legal agreement to pay it back. So, why shouldn’t you do what you promised? Is your word good for nothing? If this had stood we’d be creating a whole generation of dead beats. Why pay back your car loan or your mortgage? Don’t you deserve to have everybody else pay those off for you too?
This was not “equitable.” Speaking of car loans, as I’ve demonstrated in a previous blog, if equity was your goal we would have literally been better off paying those off instead of student loans. Proponents of this thing like to point out that there would have been a disproportionate benefit to Black borrowers. Another way to look at it is that a disproportionate number of Blacks don’t go to college. Why should they be subsidizing their privileged peers? If equity is what you’re after paying off auto loans is better because they are held by people who went to college and those who didn’t so the benefits of paying them off would have been more evenly spread.
Do you really want any president to have this much power? If Biden can unilaterally wipe out $400 billion in debt what’s to prevent President DeSantis from spending half a trillion on a border wall or bus tickets to Madison for immigrants or motes around Disney theme parks?
Is this really the way you want to spend $400 billion? If you’re a liberal (like me, sort of) and somebody asked you how you want to spend almost half a trillion would this be your first choice? Not early childhood education? Not subsidized day care? Not an expansion of Obamacare? Not paid family leave? But this? Really?
Biden’s justification was ludicrous. To use an act clearly intended to help veterans during a national crisis as cover to forgive the loans of theater majors who never got anywhere near Afghanistan or Iraq just never stood up to scrutiny. And anyway, Biden himself has declared the national emergency over. Now he’s going to try another end-around with the Higher Education Act. He’s doing this because he knows he doesn’t have the support in Congress, which recently passed a bipartisan bill to stop this.
There is no strong public support for this. Polls show the public split right down the middle on this question with independents shading against it. There might be some justification for Biden to act if Congress was standing in the way of something the public overwhelmingly wanted. That’s not the case here.
Once the party of the working and middle classes, the Democrats have become the party of entitled college graduates. Student loan forgiveness was simply a payoff to their most important constituent group. I never saw so much as the shadow of a decent argument in its favor. The Supreme Court did the right thing on every level: legal, policy and moral. This is a good day in America.
Yellow Stripes & Dead Armadillos 
In debt up to the eyeballs with a worthless English degree that was a great value and return on investment. Also, it was immune from inflationary pressure so be grateful your worthless but great value degree didn’t cost you more because you signed your life away at 18…which incidentally was what all the responsible adults were telling you to do at the time.
Thank you for the coherent arguments.
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One of the arguments in favor of debt forgiveness that I hear frequently is that kids were told by their elders that they must go to college. For the most part, that’s good advice. As noted, you’ll make a lot more money as a rule and, of course, there are plenty of benefits to more education aside from the bucks. But that doesn’t excuse anyone from making responsible choices — we would hope with good advice coming from those same elders. Most young people are encouraged to learn how to drive, but they’re also advised to do it responsibly — don’t drink, put down your cell phone, etc. With adult freedoms come adult responsibilities.
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I agree with you on the merits about debt forgiveness. I take issue with the fact that you are overly hard on young people who, contrary to what you say, do not exactly know what they are signing up for at 18 especially when all their teachers and parents are telling them to take the maximum and worry about it later.
Additionally, I disagree with your argument that going to college is good advice. I know far more people who didn’t go making more money than many people who did go and they do not have debt. Many people, myself included, now compete in large companies that do not hand out raises and promotions, where the easiest way to make more money is to bounce around from company to company. Many people who did not go to college make more money without having to do this. I would not advise any 18 year old to go to a four year school unless they have a real plan of attack and I would tell them to be very careful with how much they take out in loans if they go.
On the matter of the Supreme Court as a matter of textualism the decision was in error in that regard…or at least it would be easy to make that case on the black letter of the law as written.
Finally, you’re wrong about there not being a college cost issue. It is too expensive for what you get.
Regardless we can agree to disagree on the finer points but as someone who would have benefited I still think forgiveness would have been unfair and not solved anything so I’m glad things worked out how they did.
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Here’s a first: I wrote a response to this column and then deleted it. I thought your column was wrong, and, worse, it was mean.
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I would have liked to have seen your full reply. This is one of the few issues on which you and I have a strong disagreement, George. But that’s actually not too unusual for this issue. I find that the people who are for it are for it passionately. Clearly, I just can’t see their point of view. If my post came off as mean I guess I’m not surprised. I REALLY hate this idea. It goes to the core of things I believe. But I’m happy to hear the other side and, even if you don’t convince me, you might persuade other readers.
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Dave, you make some good points. On balance I might agree with some of them. But…..Some members of Congress and many corporations got hundreds of thousands of dollars of pandemic loans which have been forgiven. And many of the loans turned out to be fraudulent. We are all subsidizing those. Perhaps the difference is one of class: a desire to keep wealth in the hands of those who already have it? Those loans were contracts, and the recipient made a promise to repay them, but voila, suddenly they are forgiven. Even a thoughtful English major with student debt might find this inequitable.
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I’ve been sitting here trying to come up with a better response then “two wrongs don’t make a right.” I don’t disagree with you on the corporate welfare argument, but if we go down this road on every issue we’ll never have a standard for anything. On any given issue somebody will be able to find a case where the wrong thing was done. So, if the argument is, “see, we messed up once, so just to be fair we should keep messing up,” where do we end up?If somebody got away with violating their contract does that mean that everybody should? Why have contracts?
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