Why Old Handsome Joe Biden Should Go Whole Hog On Student Debt Relief
After months of being lobbied by Elizabeth Warren and Chuck Schumer to use his executive power to forgive $50,000 in federal student loan debt for most borrowers, Joe Biden said during his CNN town hall Tuesday night that he just plain won't do that, although he still intends to ask Congress to pass a bill forgiving $10,000 of debt per borrower. It's a disappointing thing to hear, but Schumer and Warren responded by saying they plan to keep pushing for the larger loan forgiveness package, both because it would do so much to get the economy moving, and because it's a matter of racial justice.
At the town hall, Biden replied to a woman who asked,
The American dream is to succeed, but how can we fulfill that dream when debt is many people's only option for a degree? We need student loan forgiveness beyond the potential $10,000 your administration has proposed. We need at least a $50,000 minimum. What will you do to make that happen?
Biden was pretty quick in replying, and pretty blunt, too: "I will not make that happen," he said, adding that he just doesn't like the idea that some people who went to pricey private schools might get help along with people who really deserve it — a bogus argument, as we'll get to in a moment.
Here's the video:
New - Biden completely rejects Schumer/Warren proposal to cancel $50K of student loan debt per borrower: “I will… https://t.co/3U5WjozkYT— Michael Stratford (@Michael Stratford)1613534224.0
It depends on whether or not you go to a private university or a public university. It depends on the idea that I say to a community I'm going to forgive the debt—the billions of dollars of debt—for people who have gone to Harvard and Yale and Penn [...] rather than use that money to provide for early education and for young children who come from disadvantaged circumstances.
There are a few problems with the logic there, however, starting with the misleading idea that broad student debt relief would unfairly benefit wealthy layabouts who went to Ivy League schools. As CNBC points out, since elite schools have some of the most generous aid programs for the relatively few lower-income students they take, graduates of the Ivies "are often among the students with the lowest amounts of student debt owed."
According to the U.S. Department of Education's college scorecard tool, just 3% of Harvard students take out federal student loans and among these students, the median amount owed at graduation is between $9,464 and $25,714.
Average student loan debt in the US is ~$30k (LOTS have more) Many won’t fully feel $10k in forgiveness until afte… https://t.co/9TNP5CTqqd— Alexandria Ocasio-Cortez (@Alexandria Ocasio-Cortez)1613606288.0
For that matter, elite schools, with their huge endowments, haven't been the primary drivers of the student debt crisis anyway. When she campaigned on debt relief in the presidential primary, Warren pointed out that as states pulled back from supporting higher education, public colleges and universities made up the shortfall by raising tuition and fees, passing on the costs to students and making it far harder for people to get a college education without going into debt.
So don't think of student debt relief as a handout to irresponsible borrowers. Think of it as fixing a structural problem in how we fund higher education — and one that needs to be prevented by restoring the public role in funding public education all the way through college, like civilized countries do.
There, Biden is on the right track. As he noted at the town hall, he's called for Congress to fund free community college for everyone, and for families whose income is below $125,000 a year, Biden's proposal would fund four years of tuition and fees at state universities as well. Both of those would go a long way toward making higher education more affordable to more people, and preventing a new cycle of student debt piling up.
And credit where it's due: Biden also called for making the interest rate on federal student loans zero percent, as it's been since Congress passed the CARES Act, and that would make a big difference, too, allowing people to actually start paying down the principal on those loans.
Further, Warren and Schumer have emphasized — going back to Warren's initial call during the primary for a sweeping student debt forgiveness program — that student debt elimination is a matter of racial justice, and would help to close the racial wealth gap. CNBC notes that, among folks who go to college, "African-American college graduates owe an average of $25,000 more in student loan debt than White college graduates."
Moreover, a Color of Change survey found that of the 22 percent of Black voters who currently have student loan debt (56 percent of Black voters have student debt now or have in the past), 34 percent of them
currently have between $15,000-$50,000 of debt and another 45% hold $15,000 or less in student loan debt. These student debt loads are likely cutting into consumer spending and dimming the prospects for a rapid economic recovery, and have an outsized impact on Black Americans due to the historic exclusion of Black people from wealth creation.
And that's something that needs addressing, given that as things stand now, the average white high school dropout has greater wealth than the average Black or Latinx college grad.
Warren points out that forgiving $50,000 per borrower would outright eliminate the debt owed by 75 percent of people who have federal student loans. An economic analysis of her campaign proposal showed that the greatest beneficiaries of debt cancellation would be at the lower and middle economic strata, directly benefiting far more people than the Rich Fuckwads who have gotten richer off the last four decades of Republican tax cuts.
Eliminating all that student debt would free millions of Americans to buy houses, start businesses, and spend money that would otherwise be going to service debt. Hey, it's that "growth from the middle" that Barack Obama was so fond of!
By contrast, while $10,000 of debt relief would certainly be nice, it wouldn't make much of a dent in the the huge pile of debt that people are carrying. It would leave far fewer people free of debt, and as Ocasio-Cortez noted, it would still leave the average student debt holder up to their neck in debt. As for Biden's suggestion that we can either have broad debt relief or early childhood education, that again seems like a false choice. How about we forgive debt, tax the rich, and really unleash the economic power of millions of Americans, instead?
One glimmer of hope for folks who want to push Biden on this: As we noted, Warren and Schumer haven't backed off calling for the larger target, which they argue could be achieved with an executive order, noting that both Barack Obama and Donald Trump did that, without waiting for Congress. Biden, as USA Today reports, at least seems open to the idea, and
has told Schumer and Warren that he will instruct the Department of Justice to conduct a legal review of his authorities on the matter in conjunction with the Domestic Policy Council on how to target any debt relief.
Do it, Joe. This isn't a time for thinking small.
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