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Columns, Opinions

Allums ’21: No more settling: the time for student loan forgiveness is now

By
Opinions Editor
Monday, March 29, 2021

“Welcome to Settle for Biden, the page where we recognize that Biden is bad but Trump is way worse. Now is not the time to be petty; now is the time to defeat Donald Trump and his dangerous agenda,” reads the caption under the first Instagram post of the account formerly known as @settleforbiden (now @path2progress). The account, now addressing an audience of 276,000 followers, was created by 19-year-old Illinois native Sam Weinberg, who formerly supported Bernie Sanders’ presidential campaign. During the primaries, Weinberg and throngs of other young voters rallied behind Senator Sanders’ progressive agenda, decrying Joe Biden’s characteristically moderate stances on issues such as health care and funding for law enforcement. However, when Sanders officially dropped out of the race in April 2020, it became increasingly clear to Weinberg, as well as other like-minded Gen-Z youth and millennials, that “settling” for Biden as the frontrunner was a necessary evil to prevent the far worse threat of a second Trump term. 

When progressives were forced to say goodbye to the possibility of a Bernie Sanders presidency, so too went the greater likelihood of bold action on the student loan debt crisis. One of Sanders’ most compelling campaign promises was the cancellation of all $1.6 trillion of outstanding student loan debt held by approximately 45 million Americans. Meanwhile, although Biden’s campaign website features plans to improve today’s income-based repayment program and mend the Public Service Loan Forgiveness Program, it says nothing of outright cancellation. What Biden has since proposed in the realm of tackling student loan debt falls substantially short of sweeping debt erasure, offering just $10,000 in loan forgiveness per borrower. Now that Biden has taken office, however, the necessity of “settling” is irrelevant, and maintaining public approval will be entirely up to his achievements in office —  namely progressive action such as eradicating student debt. More specifically, Biden must choose between taking such measures via executive action, which is enabled by the Higher Education Act of 1965, or congressional legislation. Given the inevitable uphill battle that significant student loan forgiveness will face in Congress, Biden has no choice but to pursue it through executive order to grant it any chance of success. 

If the fight over the third coronavirus stimulus package was any indication, congressional legislation for wide-scale student loan forgiveness would be crushed beneath the weight of cross-party negotiations. For example, Senate Republicans’ characteristic frugality was on full display when they created a counter-proposal to the plan created by President Biden and congressional Democrats. The plan totaled $618 billion, a massive step down from Biden’s $1.9 trillion proposal, and notably featured just $1,000 in direct stimulus payments only for individuals earning less than $50,000 a year and joint filers earning less than $100,000.  Importantly, the proposal excluded provisions for student loan borrowers. One might assume that such fiscal conservatism is limited to Republicans, but even some Democrats considered leaving many individuals and families who had previously received checks without relief by lowering the financial eligibility for the third round of stimulus checks. The final package eases such stringent restrictions, though there was still widespread confusion amongst Americans as to how they ended up receiving $2,000 total in coronavirus relief, as opposed to another separate round of $2,000 checks. If Biden and Congress had to wrestle with limitations on the amount and recipients of much-needed assistance after almost a year of a global pandemic, it is not hard to imagine that attempting a bipartisan resolution would hinder expansive student loan forgiveness. 

Senate Majority Leader Chuck Schumer and other Democratic leaders in Congress are increasingly pressuring Biden to use his executive power to cancel the majority of student debt, and it is about time he listened. Biden achieved record turnout in the 2020 election when he drew in approximately 80 million votes, more than any other presidential candidate in U.S. history. This enthusiasm will not last if he does not use the power that the public endowed him with to implement meaningful policy. Come the 2022 midterm elections, how will Biden and congressional Democrats justify fighting to get progressives out to the polls if, after two years of unified government, little on their agenda was accomplished? The survival of Biden’s party depends greatly on demonstrating that they can actually make a tangible difference through measures like student loan forgiveness. The Settle for Biden team put it best when they said, “We settled, we hustled, we won. But we won’t be settling anymore.”

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  1. Spicy With says:

    Even assuming “the necessity of “settling” is irrelevant” and the executive action is lawful, there is no mention for the “why” at all here, just that now is a good time to do this.

    https://bfi.uchicago.edu/working-paper/2020-169/ investigates the impact of full (since the author doesn’t want to “settle”) loan forgiveness —
    “Full or partial forgiveness is regressive because high earners took larger loans, but also because, for low earners, balances greatly overstate present values. Consequently, forgiveness would benefit the top decile as much as the bottom three deciles combined. Blacks and Hispanics would also benefit substantially less than balances suggest.”

    Even if the timing is correct, is the policy correct?

  2. Marc McReynolds says:

    Any chance we could make loan forgiveness retroactive? I spent ten years paying back the student loans I willingly accumulated from four years at Brown… without complaint, but then moderate progressives are somewhat less prone to that sort of thing.

    Interesting to see “moderate” used as a near-insult, even as extremists of whatever stripe have collectively brought our federal government to near-incapacitation… all the while patting themselves on their respective backs for the correctness of their respective views.

    When you get something for free, human nature is to devalue it. I probably wouldn’t have worked as hard (and therefor gotten as much out of one of those precious undergrad slots) if I didn’t have at least some skin in the game.

    If college financing has gotten to where the typical loan burden is grossly out of whack with ability to repay, then hopefully the legislative branch does step in (assuming it hasn’t been repopulated by little else beyond arms-folded antagonists) and in various ways address the problem. Apply taxpayer money to relieve some but not all of the burden, for example. It’s sensible public policy to shift some part of a major expense that’s hard to afford early in life to later on. But every last bit of the expense? Seems rather… extremist.

    • Please don’t call your own vices “human nature”.

      I’ve graduated from the best dental school in the world, which also happens to be entirely free for undergraduate students. Everyone there worked their asses off – without grading inflation that plagues private schools in the US where you’re supposed to get an A or a B just because daddy is paying. The “skin in the game” is the prospect of improving one’s own conditions and getting out of the misery loop that plagues millions of families in this country.

      Maybe you just come from a super comfy life and getting a college degree is inconsequential to your future?

  3. Staff Alum says:

    Left: “We want equity for all”.

    Also Left: “We want the middle class to pay for the college educations of people who make more money than they do”.

  4. Why should the people who didn’t save their money or overspent get a break over the people who did save or already paid them back? That is not fair. People who saved their money or spent wisely or who went to more affordable colleges are rightfully angry at this.

    • Gabriel Monteiro da Silva says:

      This is like opposing a cure to cancer because it would be unfair to those who had to deal with chemo

  5. alum commenter says:

    It’s a huge problem that millions of Americans are entering adulthood with student debts that will weigh on them for decades. But the answer is on the costs side, and not in shifting the payer profile. Brown’s cost of attendance this year is $81k before applying discounts (financial aid.) That is the heart of the problem. Student debt in America would be effectively a non-issue if the typical residential cost of attendance were brought down to $15k. Yes, I appreciate that university finances are complicated, but if you hand me a red pen and a copy of a typical college budget, I’m confident that I could maintain a quality education at that price point. Of course, the experience would differ significantly from what’s offered today at colleges like Brown (for better and worse.)

    https://www.brown.edu/about/administration/financial-aid/cost-attendance

  6. I just came across this, trying to see if anything came of the $10,000 promised in his campaign.
    I would be happy if they just applied the interest back towards the principal of my loan, keeping 1% to cover administrative costs instead of using my repayment to make money. I did not understand loans and debt when I started, I have made the best of it and if the government only applied the interest back towards what I have paid in back towards my principal I would be paid off.
    If it is done this way it would be my money I have paid in that is being applied, not from the general fund, so no one should be upset on either side. I do not mind paying my loans back, but the interest is what is keeping me, and many others, in debt.
    That being said, I see the democratic party having an issue with votes in 2022 if at least the $10,000 is not applied across the board, or the 0% is not held back another year.

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