President Biden has announced his college loan forgiveness program. Let the carping begin!
Critics scream that forgiveness takes money from the broader tax base, mostly made up of workers who did not go to college, to subsidize the debt of people with valuable degrees. Technically, I suppose that’s true–but it’s also true for the massive corporate subsidies and tax credits that the GOP loves.
What about Trump’s 2017 tax cut for millionaires? Or those oil company subsidies and multiple other subsidies for big companies that can afford to hire good lobbyists? How about those lower tax rates for hedge fund managers (“carried interest deduction”)?What about tax provisions benefitting only the rich–for example, allowing 100% deductibility for yachts purchased for “business purposes,” and 100% of the future depreciation for private jets in their first year of service?
Where are the GOP howls of “unfairness” about those examples of “socialism?” (I forgot–in the good old U.S. of A., we have socialism for the rich and capitalism for the rest of us…)
Republican lawmakers screaming the loudest about “unfairness” are the most hypocritical: Marjorie Taylor Greene had $183,504 in PPP loans forgiven; Vern Buchanan (Florida) had more than $2.3 million forgiven; Markwayne Mullin (Oklahoma) had more than $1.4 million forgiven; Matt Gaetz (Pedophile) had $482,321 forgiven. The list goes on. And on.
It also turns out that not all beneficiaries of loan forgiveness have those valuable degrees. A lot of them just have the debt. Researchers tell us that the people who struggle the most to repay their loans “are less likely to be baristas with six figures in debt and a graduate degree than blue-collar workers who have a smaller amount of unpaid loans but never graduated college.”
As Biden said, that worker has the “worst of both worlds — debt and no degree.”
The loan forgiveness program is specifically targeted to borrowers making less than $125,000 annually–those Yale graduates pulling down big bucks on Wall Street won’t qualify. The relief will go to middle and low-income borrowers struggling to pay off their loans–and that targeted debt forgiveness is likely to have a significant positive economic impact. (As numerous studies have confirmed–when you give lower-income people more money, they spend it.)
A couple of things worth noting: women ( Black women in particular) represent a disproportionate number of the borrowers who struggle with repayment; and school teachers are among those most likely to benefit.
A July 2021 report from the National Education Association showed that 45% of educators were student loan borrowers and over half of those still have a balance, averaging almost $59,000. Teaching typically isn’t a high-paying career, so paying off loans can be particularly burdensome. Experts say loan forgiveness would especially benefit early education (pre-K) teachers, who make even less than those in the K-12 system.
The loudest criticisms of loan forgiveness seem to come from people who paid off their own student debts. Alexandra Petri had a great –albeit snarky–response to those complaints in a Washington Post column.A couple of those paragraphs:
DISGUSTING! AWFUL! I have just received word that life is getting marginally better for some people, and I am white-hot with fury! This is the worst thing that could possibly happen! I did not suffer and strive and work my fingers to the bone so that anybody else could have a life that does not involve suffering and striving and the working of fingers to the bone. I demand to see only bones and no fingers!…
Every time anyone’s life improves at all, I personally am insulted. Any time anyone devises a labor-saving device, or passes some kind of weak, soft-hearted law that forecloses the opportunity for a new generation of children to lose fingers in dangerous machinery, I gnash my teeth. This is an affront to everyone who struggled so mightily. To avoid affronting them, we must keep everything just as bad as ever. Put those fingers back into the machines, or our suffering will have been in vain…
I fought uphill battles and squinted into the night and toiled and burdened myself in the hope that my children, one day, would also get to work exactly that hard, if not harder, and suffer at least as much as I did, and have, if the Lord allows, lives worse than mine. God, please make their lives worse!
These reactions do make me wonder why the owner of the corner hardware store isn’t howling about the unfairness of subsidies that pad the bottom lines of bigger businesses, or the tax cuts that saved him $10, but put lots more money in the pockets of the already-wealthy.
For my part, I really prefer having my tax dollars support the education of a kid from a low or middle-income family, rather than subsidizing the purchase of a yacht “for business purposes.”