It takes a special kind of foolishness to look at student loan debt and decide to cancel some of it in a way that directly benefits the affluent and snubs the poor, but the Biden administration has absolutely crushed it on that front.
The plan? Forgive up to $10,000 in student loan debt for anyone making up to $150,000 per year ($300,000 for married couples). The goal? To get Biden’s approval numbers up (which, by the way, isn’t going to work). The problem? It bails out the rich instead of the poor.
Such a policy would, perhaps counterintuitively, give the biggest benefits to those with high incomes. That’s partly because lower-income people are less likely to have gone to college. Additionally, many borrowers with the largest loan balances attended graduate and professional programs (medical, business and law school) that lead to higher earnings.
A recent study from economists Sylvain Catherine and Constantine Yannelis found that student-loan forgiveness of up to $50,000 for every borrower would work out to an average of $700 for people in the bottom income decile and nearly $5,000 for those in the top decile.
And there are large swaths of American voters who know this, particularly the blue-collar workers the Democrats claim to represent. Those voters see a loan forgiveness plan that impacts the people who took out massive loans for advanced degrees but wonder where their $10,000 in financial relief is.
Go ask a local truck driver. Or a factory worker. Or someone on an oil rig. Or tending to crops or livestock. Go ask the people who went straight to work to support their families, and they’ll be quick to tell you they don’t want their tax money going to people who chose to get a Master’s degree in Creative Writing.
This phenomenally bad idea, however, was more or less a non-starter even in the Biden White House… that is, until a certain unofficial governor out of Georgia got involved.
James Hohmann of the Washington Post spoke with Charlie Sykes of The Bulwark on this issue, and Hohmann’s reporting has uncovered that Georgia’s Stacey Abrams pushed the White House to go ahead with student loan forgiveness.
Charlie Sykes: I mean, seriously, where does Joe Biden think this groundswell is going to come from, except for this small group of highly-entitled college graduates who dominate the staffing and the inner workings of the Democratic party?
James Hohmann: I’ve asked, I’ve repeatedly asked people. And I’ve asked a lot of people in the White House this question, and essentially the answer is that this is the fault of Stacey Abrams and Raphael Warnock.
Charlie Sykes: What?
James Hohmann: Stacey Abrams has been browbeating the White House on this, and says that this is the only way she could win — that this is going to be a base turnout election. This isn’t about persuading people in the middle, it’s about getting the base to turn out. And the base isn’t going to turn out if they don’t do this, and that they have all sorts of stats about how a lot of graduates from HBCUs have all this debt. And so there are a lot of people very close to the president who privately understand that this is a complete disaster for them. But the president is being pulled really hard by these woke leftists who … believe it’s all about the base.
If there are “a lot of people very close to the president who privately understand this is a complete disaster for them,” then they need to do their job and tell him not to do it. They need to push back. Just sitting idly by and let him commit to this destructive act of policy is not being a good friend, employee, staffer, or whatever. They are being forced to submit to the whims of a woman who cannot win her home state.
Abrams is profoundly mistaken if she thinks 2022 is an election year that is all about getting the base out. There isn’t enough base for the Democrats to win an election with just them. They have to get voters to join their side.
But Abrams is working under the mistaken (and often shared among other Democrats) belief that they are in the majority and the Republicans are just out there to keep their voters from casting their vote. We saw that in her baffling statements about there being a difference between “suppression” and “turnout.”
So, not only is this a bad idea that actually favors the wealthy over the poor, but it is a bad political maneuver that won’t actually help the Democrats win elections. It’s just a bad idea all around.