Republicans claim President Biden's modest student-loan forgiveness plan "isn't fair." Perhaps that is because its primary beneficiaries are Black students.
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Most Democratic initiatives in recent years have been broadly popular. More than 60% of the public opposed overturning Roe v. Wade. Gallup’s long-running polling found that support for same-sex marriage has now inched above 70%. Support for labor unions is the highest it has been in 57 years, reaching 71% in recent polling. Somewhere between two-thirds and three-quarters of Americans support the Equality Act, which would prohibit many forms of discrimination against LGBTQ people. Biden’s executive order to allow transgender people serve in the military enjoyed support from 66% of adults, and even Republicans were equally divided on the issue. Efforts to reduce drug prices and Medicare expansion have also been widely popular.
However, Biden’s executive order to forgive student loan debt has been far less popular than other initiatives. Biden’s move to cancel $10,000 (and up to $20,000 for those with Pell Grants, which are meant to help the poorest students go to college) of loan debt for those earning less than $125,000 (or $250,000 for households) was met with only tepid support. Only 48% said the plan was fair and 44% said it was unfair, and not surprisingly, 56% of Republican respondents said the debt forgiveness was “very unfair.” Never mind the fact that the cost of this is decimal dust compared to what the ultra-wealthy got from Trump’s tax cuts.
The opposition to this usually comes from a place of “I had to pay mine off”; “Biden should fix the cost of college instead of this”; and “Biden should only do things that are very popular.” All of this is nonsense, or a pretext for opposition to forgiveness. I went into the military to pay for my education, but not everyone is able or willing to do that. The rising cost of colleges and universities is due to things like administrative bloat, reduced state spending on education, increased demand for an educated workforce, and ease of access to loans. The only lever Biden could pull here is to make loans less accessible, which would also make it even harder for people to get an education and escape poverty.
As for only doing things that are popular, yes, that is a very neo-liberal, “Clintonian triangulation” approach to politics. It also ignores the fundamental reason why this does not poll as well as other things: namely, racism. Unlike nearly every other law or policy in the history of the United States that is neutral on its face, but benefits one group more than others, Biden’s student loan forgiveness benefits Black people proportionately more than white people (though plenty of white people will also benefit).
And many white people hate that. This comes from a similar impulse that made Reagan’s “welfare queens” rhetoric so effective. It is also why Biden’s expanded tax care credit failed to attract more support than a tepid low-50s number, despite lifting millions of children out of poverty. Without the expansion, a loophole went back into place preventing roughly one-third of the nation’s children and half of all Black and Hispanic children from fully benefiting from the child tax credit.
Unsurprisingly, when you delve down into the crosstab data on who is most opposed to student loan forgiveness, you find that they are older, whiter, wealthier, and non-college graduates. Which, not coincidentally, also describes the GOP base. These are the people who feel that whites and Christians are the biggest victims of discrimination in the country.
The problem is that these knee-jerk reactions to programs that benefit Black people perpetuate the worst racial problems in the U.S. related to poverty and economic inequality. The average white household in the U.S. is worth 7.8 times more than the average Black household, and, the gap is only widening with a tax system that is increasingly skewed toward the rich. Growing wealth inequality reduces social mobility as well.
The Great Gatsby Curve is an econometric theory that shows “the connection between concentration of wealth in one generation and the ability of those in the next generation to move up the economic ladder compared to their parents.” This is a complicated way of saying that the worse wealth inequality is in a society, the harder it is for poor people to escape poverty. In the U.S., getting a college degree is one of the surer ways to escape poverty.
However, because Black students are much more likely to start in poverty, they are more likely to accrue college loan debt in the process. Thus, after they graduate, student loans continue to be a drag on their income in ways that it is not for students who started out with wealthier parents. Student loan debt is worse than most other kinds of debt: it is nearly impossible to discharge, and the annual interest rates border on usury (up to 7.54%, and no lower than 5%). This is why you hear so many horror stories of people who faithfully make their payments, yet still see the balance on their student loans growing.
The government profits immensely from it, to the tune of $197 billion per year in interest. For comparison’s sake, this would pay for over a quarter of the enormous U.S. military budget, and about half as much as what the U.S. collects from all corporations in taxes.
Let that sink in: Massively profitable corporations in the U.S. pay $383 billion in taxes, and students with loans pay about $197 billion in interest. This interest is disproportionately paid by students who were poor to begin with. And not only that, but student loans also disproportionately punish people from generations that are now poorer than their parents.
The average millennial is poorer than their parents when they were their age. Gen Z is now entering college, and the widening gaps in wealth and income equality mean that they are even more likely than millennials to be poorer than their parents. We are in a downward spiral, where it is harder and harder for people to dig their way out of poverty. The average American is getting poorer and poorer, with those poor being disproportionately people of color.
The Biden loan forgiveness proposal will not solve all of this, but it is a step in the right direction. It targets students who started out the poorest, and excludes those who have clearly escaped poverty. No, it doesn’t reduce the cost of college, nor raise taxes on people and corporations who should pay more to make up the difference in revenue. Nor does it deal with the fact that minimum wage is nowhere near a living wage. It’s up to faux-populist Republicans to get on board with these and stop telling poor people that work will make you free.