In order to truly help working- and middle-class Americans, we need to cancel up to $50,000 in student loans.
Ro, can you provide any rational explanation for focusing on transferring student loan debt while doing nothing to reform the very system that contributes to it? The federal government subsidizing student loans encouraged a huge number of people to go to college, even though many were not prepared for it. As a result, universities lowered admissions criteria and created many more degree courses in a variety of liberal arts without any regard for how students with these degrees would fare in the workforce.
Because the US economy was not prepared to absorb, and does not need, a skyrocketing number of over-credentialed and under-skilled employees, many students were incentivized to either go to graduate school or, more concerningly, to become administrators at universities, since that is the only thing these degrees prepared them for.
This has resulted in a huge uptick in the number of administrators and non-teaching faculty at universities, which necessitates more tuition money to pay the salaries. So the schools increase tuition, because the government will subsidize it, and because kids are repeatedly told that if you want to be successful, you MUST go to college. And now, years later, the system that people of your ideological ilk created out of a misguided desire to do good, without respect or concern for second-order consequences, is failing so spectacularly that you want to spend trillions to "fix" this problem, while just kicking an ever-expanding can down the road.
It just makes my blood boil. Ignorant politicians and bureaucrats create a mess, completely destroy the economic futures of a generation of students, and THEN decide that the only way to fix it is by paying them off, using money that will by necessity be taken from the NEXT generation. And on and on it goes.
Studies suggest that for every dollar the student debt limit increases, universities raise tuition by 60 cents. That's what this was about. The universities are the lifeblood of the far-left, and shoveling them more money is the top objective of the Democrats.
What about the role of parents in all of this? We have a child in the California UC system and we worked very closely to make sure we made financially thoughtful choices. We steered her away from going out of state or private to avoid debt. We also opened up a 529 when she was 2, which is going to pay for her entire undergraduate degree. Why are we penalizing people who prepared and were thoughtful about the choice of which college to go to that fit a budget? Why should my tax dollars pay for someone who has 280k in debt to an arts college [true story BTW]?
Borrow tens of thousands and don't pay it back. Cool story.
This has nothing to do with right vs left and everything to do with right vs wrong.
So, let's saddle those who prudently paid off their college debt or didn't attend college and take on debt, with the debts of those who self-evidently made stupid or unfortunate investment decisions. Not only no, but hell no!
Change the law to allow debts to be discharged in bankruptcy. Have universities put some amount of their endowment money at risk if a student does not find degree-related work after graduation. Lots of creative ways hold down college expenses.
This was an amusing piece to read because it’s so chock full of progressive whining and complete absence of any objective reasoning. It’s all emotion. Pay off my loans because poor me! Make higher education free for everyone!
Biden doesn’t have the authority to do what he’s proposing - outright cancellation of $300B in debt. Only Congress can do that. I suspect he’ll find that out soon enough. And if it did happen it would 100% cause inflation to rise because it would in effect inject that $300B into the economy overnight. Besides that it robs the poor to pay for the well-off. That money has to come from somewhere, and “cancelling” it doesn’t delete it, it just transfers it to taxpayers, thanks to Obama’s takeover of college loans from the banks.
If you cannot afford to pay for a loan, then don’t take out the loan. This is not rocket science. If you take one out, you are on the hook to pay for it, not anybody else. Shirking that responsibility is not AND SHOULD NOT be tolerated by society because it is wrong. It is immoral.
As a sitting member of Congress, it would be nice to see him accept constitutional order instead of "I like it, so the President should just make it happen". No accountability or principles beyond this.
Representative Khanna - accept your responsibility and do your job.
I love it when progressives always have to include how the education system in Europe is so much cheaper. Most of the countries where education is less expensive also have a 21% VAT added onto just about every purchase. So EVERYONE pays for the "free" education, healthcare, childcare, etc., etc.
Personally, I wouldn't mind having a VAT if it went to education and healthcare. But that would mean everyone here in the US would have to pay their fair share, and not just the evil rich people.
I followed the Ro's link about a Roosevelt Institute study suggesting a strongly progressive impact, as that's my main concern about this cancellation.
It actually leads to a Mother Jones summary of the study. The RI study chooses to focus on wealth versus income (versus a previous study asserting regressive impact). I'm not sure that's a better measure. If you give somebody $20,000 tax free to pay off their loans, that's not going to immediately impact their income, but it will immediate impact their net wealth. However in the medium to long run, a higher income will typically lead to accumulating more wealth. Perhaps there are very good reasons to focus on wealth instead, but until I understand them better, I cannot help but wonder if "discovering" a progressive impact was an unexpected outcome of that change, or if they discovered it was more progressive if they changed the metric and then proceeded to rationalize it. That's only a suspicion, not a conclusion and I would welcome other perspectives.
One piece that perhaps somebody could help me understand is how the study (according to the MJ article) is this: "Compared to the Biden-favored $10,000 forgiveness option, the Warren-Schumer $50,000 proposal would result in almost no additional benefit for the absolute wealthiest, the authors find, and an extra $1,000 on average for those in the second-wealthiest group. But it would send more than $4,000 to those in the 20th to 40th percentile of wealth." How can forgiving (up to) an additional $40K add only $4000 to the 2nd quintile, and so much less to the 4th (and none to the 5th)?
Another thing I notices is that the RI study changed was: "They looked at the impacts of cancellation on the full population, including all the wealthy people who wouldn’t benefit from cancellation because they carry no student debt.". Ro mentioned that only 1/3 of college students have loan debt, but I don't think that's because 2/3 are "wealthy". I wonder if including non-borrowing and already-repaid students is a way of diluting the benefits to higher quintiles (per previous paragraph). So even if most of the larger loans amounts are to people from higher income families, we could group them as a class with others who did not take loans, in order to show a lower "wealth quintile" benefit. Again, if I'm missing something, I'd appreciate your reflections. I may be overly skeptical.
Certainly parental income (or wealth) is a major factor, but choosing affordable schools, saving for college, and making an effort to pay off loans faster are also factors in not having debt.
I've seen analyses which indicate that college educated careers have seen continued after inflation income increases, while income for blue collar jobs has been pretty flat for decades. That is, the college educates are (as a whole) floating upward while non-college is not. The question about upward transfers of wealth, to me, is about whether taxpayers are subsidizing a more rapid wealth increase in the future for college educated folks. I might rather any massive subsidies go to working class folks, who on a whole are struggling more. In terms of fairness, I'm less concerned about parental incomes/wealth than about the students' future income/wealth. Yes, there is some correlation, but I'd prefer to focus on the direct issue rather than something which only partially correlates to it.
Why can't we just go back to the way things were prior to the 2005 bankruptcy law changes. Allow those who are in truly dire financial straits to declare bankruptcy and start again. There are consequences for this so it's not a decision to be made lightly.
Hey Ro, if this is such a great idea, why stop at $50k?
Shouldn't there be constitutional constraints on political incumbents buying votes with tax dollars?
The problem with Leftists (progressives, communists, fill in the blank) is not that they "don't do math." It's that they can't.
Everything is always paid for. Get that through your thick skull, "Ro." Everything. Is. Always. Paid. For. Somebody pays for every government adventure, whether it's $85 billion in military equipment abandoned in the desert for our enemies to use in killing our sons and daughters, or over a trillion dollars transferred to colleges and universities in "forgiven student debt" used to kill their minds.
In a nation where a large portion of the population is barely making it, Alleged President Asterisk is now using his executive power to heap additional burden onto taxpayers who are already staggering under the load of his fiscal irresponsibility - and to be fair, that of his predecessors, Democrat and Republican alike. Every dollar given to someone who didn't earn it was taken by force from someone who did. If you don't think force is involved, don't pay your taxes next year and see what happens.
Ronald Reagan was right: The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help."
How precisely does cancelling student debt help working class Americans, many of whom never went to college in the first place, or chose the frugal alternative of two years at a community college, possibly followed by two at a four-year college or university, and as a result ran up very little debt, which, unless they are new grads they have paid down? The cancellation of student loans will inflate the money supply and when that filters through to price inflation, as it inevitably will, will most of all harm the working poor, many of whom went to trade school, or got jobs just out of high school, those on fixed incomes, and those subsisting on social benefits. It will also encourage tuition hikes by cynical university administrators/boards of trustees/boards of regents who will see it as setting a pattern (oh, look, it almost instantly filtered through into price inflation in higher ed!)
Cancelling student loans mostly benefits the scions of the professional managerial class while harming everyone, but harming the poor most of all. Since when do "progressives" trample on the interests of the poor to benefit the better off? Honestly, Congresman Khanna, are you a simply demagogue who knows better, and is saying whatever seems expedient to your party's cause, or are you truly so economically illiterate as to not see the inflationary effect and so morally illiterate to think that it's fine to make chumps out of everyone who did the honest thing and sacrificed current pleasures to pay their loan, perhaps even ahead of schedule? Also will you be introducing legislation to provide an actual legal and constitutional basis for student loan cancellation, whether in Pres. Biden's amounts your favored larger amount, since cancelling debts to the Federal government by Presidential decree is not only economically and morally unsound but unconstitutional, as the power of the purse rests with Congress not the executive?
We have to reform higher education and attack the problem at it's root. What good is student loan debt forgiveness if we are doing nothing to prevent our children ending up in the same exact situation. With how fast tuition is rising, how long will it be before we accumulate the same, or more debt, than we have now (pre forgiveness)? I suspect not long.
I don’t partake, but I might be tempted to try some of what you’re smoking.