Will The Government Forgive Student Debt?
The Biden administration recently announced that student loan payments and interest would once again be paused. This latest extension of the student loan freeze lasts until May of 2022. While this move is no doubt popular among student loan borrowers, it raises the recurring question of student loan forgiveness.
The Biden administration campaigned on the idea of forgiving at least $10,000 per student loan borrower. It was unclear whether that would be through congressional or executive action at first, but it is now clear that such a move would need to be made by Congress. This is not good news for those who were hoping that the government would forgive student debt. The idea of student loan forgiveness is not a popular one among Republicans, and even many Democrats are not in favor of the idea.
In Congress, only a relatively small number of legislators have been campaigning for student loan forgiveness. Representatives Alexandria Ocasio-Cortez and Jim Clyburn, as well as Senators Elizabeth Warren and Chuck Schumer, are some high-profile congressional Democrats who are in favor of student loan forgiveness. These particular members of Congress have campaigned heavily for mass student loan forgiveness, with a suggested $50,000 per borrower limit, a significantly higher amount than the one proposed by the Biden administration.
So far, those in favor of student loan forgiveness have not been successful in making the issue pressing enough for Congress to act. Even if half of the country was in support of the measure and put pressure on Congress, it’s still unlikely it would gain enough traction to become law. In order for mass student loan cancellation to become a reality, the Democrats will need to gain more seats in Congress.
Gaining seats for the Democrats in the 2022 midterms may not be as difficult as some political commentators would have you believe. Trump is increasingly losing influence on his base, a sign that the Republican Party could be more fractured now than ever. I am not a campaign strategist by any stretch, so I’m not entirely sure what the Democrats must do to pick up congressional seats. I am sure that they need more seats if they want to accomplish grand things such as student debt forgiveness.
To overcome their opposition and move student debt cancellation forward, those in favor of cancellation have to do three things.
1. Prove That Erasing Student Debt Is a Net-Positive for The Economy
One of the primary arguments made by those in favor of student debt cancellation is that the cancellation would help the economy. On its face, the government “erasing” $1.7 trillion in debt does not seem like it would help the economy; it seems like it would sink our nation into further debt. But there is a case to be made for the positive side of the cancellation. Millions of student loan borrowers would suddenly have less financial burden and would be able to spend more, thereby stimulating the economy.
This proposed benefit of debt cancellation needs to be evaluated by more economists, and studies should be done on it. If this proposition is proven to be true, it will be a strong argument for cancellation.
2. Overcome the “You Borrowed It, It’s Your Problem” Critique
A common response to student debt cancellation is the saying mentioned above. This puts the blame squarely on the borrower, as they are the ones who ultimately chose to attend school and rack up the debt. The arguments against this line of thinking need to be clearly communicated to the public.
This critique has a couple of holes. I would propose the following four points as counters to the argument mentioned above. First, most borrowers start taking out loans straight out of high school at the young age of 18. Second, children in the U.S. are sold the idea throughout their whole lives that college is invaluable, necessary, and will lead to high-paying jobs. Third, higher education institutions have raised their costs astronomically, making college unattainable for virtually everyone without the assistance of loans. And fourth, student debt is essentially impossible to get rid of, unlike other debts.
3. Describe Who Would Benefit Most From the Cancellation
Another popular critique of student debt cancellation is that it would mainly benefit a privileged elite. This critique can easily be disproven by taking a closer look at just who our student loan borrowers are.
The truth on this matter needs to be communicated well. If a high-income elite would benefit most from the cancellation, then that certainly is a valid criticism of the plan to cancel student debt. If, on the other hand, this criticism holds no weight, it needs to be thoroughly refuted in the public eye.
Conclusion
Student debt cancellation faces a huge uphill battle. But if its proponents can focus their energy on these three things, I believe the move stands more of a chance. Too much attention is given to the “feel-good” nature of student loan forgiveness. To get this done, supporters will need to have more than emotions on their side.
