Brother, Can You Spare a Dime? For Student Loan Forgiveness

 
The most recent floated proposals on student loan cancellations is that the Biden administration wants to cancel ten thousand in loans per borrower, with an income limit of about 300K per family.

I support this, in part because it will materially help me out, but it doesn’t go far enough.

Here’s what I’m think happens if this goes through.

1)      A lot of people are actually helped. Ten thousand dollars is a lot of money. It’s almost 1400 hours at the federal minimum wage which is like 34 weeks of full-time work.

2)      But it’s means tested. The whole problem with means testing versus universal programs is that means testing means that people fall through the cracks where they would otherwise be eligible. This is in itself a travesty when I’m sure a quick google would find all kinds of estimates of people who are eligible for current federal programs but don’t because there is onerous compliance. It might be less here since it would be a one-time thing but introducing hoops to the process means there will be people who won’t see relief.

3)      People are going to be mad. No matter what the dollar amount it will be spun out by the political opponents as a kind of handout to an undeserving population. They’re going to do this no matter what so why be snakebit and prematurely capitulate to the bad faith arguments?

4)      You proved, by doing any relief, that you have the legal authority to do all the relief.

5)      You don’t solve the debt burden problem. Ten thousand is a lot, but a small fraction for people who bought into the idea that you needed education to advance or are in low paying jobs that require a lot of education that will still have a lot of debt. I have teachers, social workers, and librarians in my orbit that will still have onerous debt burdens. The public service loan forgiveness program adjustments might help but are in their own morass of red tape and bureaucratic uncertainty.

6)      The important thing for me is that by doing a one-time, smaller fix you don’t create any urgency to fix the system. Higher education has evolved in the last 40 years as it has come under attack in how it is delivered and administered and paid for. Public schooling has moved from state support to individual tuition support and that tuition has been paid through loans and grants. It’s how we got here. There’s a lot of potential fixes for this constellation of  problems but they’ll remain in the ether as long as there’s no political urgency.