TO CNN’s town hall was held earlier this week, President Joe Biden has once again spoken out against the cancellation of student debt. Senators Chuck Schumer and Elizabeth Warren pushed Biden to use executive action to write off up to $ 50,000 in student debt from all borrowers, but when asked for mayor, Biden said: ” I will not arrive there”. Instead, he offered to write off $ 10,000 in debt.
In terms of policy, there is no credible reason to be in favor of setting aside $ 10,000 but not $ 50,000. Biden appeared to suggest that he may not have the “power” to cancel $ 50,000, but it is exactly the same power under which he proposes to cancel $ 10,000.
The difference between $ 10,000 and $ 50,000 is not a matter of law or policy, but of policy. Biden and his team don’t like the idea of overriding a number they have arbitrarily determined to be “a lot.” At City Hall, Biden explained it this way: He didn’t want to write off the debt of the people who went to “Harvard, Yale, and Penn.”
I know that sounds good. Bashing Ivy League schools is always a cheap way to crank up anti-elitist energy, but here the laugh line is devoid of intellectual rigor.
As a Harvard graduate, Biden can bite me. The man obviously has no idea what he’s talking about when it comes to student debt. The reality is that schools like Harvard, Yale, and Penn have some of the least indebted federal college graduate students in the country. The last US News ranking of the lightest debt levels saw Princeton University come in third. Stanford was fifth. MIT was 11th. Yale and Harvard were 14th and 16th respectively. The average federal debt of a Harvard graduate is just under $ 14,000, and only 2% of Harvard students take out federal loans. Counterintuitively perhaps, $ 10,000 in federal loan cancellation would be a godsend for Harvard graduates and other graduates of elite institutions, and wouldn’t be very good for many other people. Biden needs to keep the Harvard name out of his mouth.
The reasons why elite universities tend to take on more debt are diverse and complicated. One obvious reason is that many students admitted to these schools come from families with the capacity to pay. But it is not the only reason. At Harvard, for example, one in five students is families earning less than $ 65,000. Harvard made college free for these kids. Elite private universities have huge endowments (Harvard’s is $ 40 billion) and can offer generous financial aid well beyond a government Pell grant.
Plus, to the extent that student debt cancellation helps Ivy League graduates Biden apparently deems unworthy, that help will disproportionately go to graduates of color. This is because student debt, like everything else in this country, hits blacks and browns the hardest. A 2016 Brookings Institute study found that black students owed $ 7,400 more than their white counterparts after graduation, but that figure skyrocketed for black graduates who owed $ 25,000 more than white graduates, tripling the gap between them, just four years after graduation.
This is called interest. Nearly half of black graduates owe more money on their federal loans four years after graduation than they had when graduation. Only 17% of white graduates are in this situation.
When Biden kicks Harvard, Yale, and Penn, he tries to conjure up the image of privileged children with wealthy dads receiving a payment they’ll use to buy more Gamestop stock. But his argument is either based on ignorance or on extreme bad faith. Biden could have just looked at the list of colleges with the most indebted graduates, who US News updated this week. Number one is Drexel University (which, not for nothing, is located in the heart of Philadelphia, a city Biden might want to remember. delivered Pennsylvania to him in the last elections). Maine Maritime Academy, Detroit Mercy and Alabama State University round out the top four.
Does Biden have any sarcastic asides he’d like to make about canceling student debt for the Merchant Marines, who have only one of the most dangerous and difficult jobs in the country and are graduates of the academy of Maine with an average debt of $ 56,897? Is there a policy reason why students who graduate from an HBCU like the State of Alabama with $ 54,177 in debt don’t deserve $ 50,000 in student loan forgiveness?
Or maybe Biden has some shade for graduates from his alma mater, the University of Delaware? The typical debt of these graduates is approximately $ 24,000, not one of the biggest offenders, but still much more than a Harvard or Yale graduate. Doesn’t Biden want to risk canceling federal debt graduates like the first lady, Dr. Jill Biden, who also earned a bachelor’s degree as well as a doctorate from this school? How is it possible that Biden thinks that everyone who owes more than $ 10,000 is a Winklevoss twin?
The discerning reader will notice that I always use the word “graduates”. That in itself centers the problem on a bit of a fantasy. In reality, nearly 40 percent of student borrowers do not graduate. This means that many people have increased debt without increased earning potential. And don’t even get me started on the folks who borrowed a lot and got a functional worthless diploma from a diploma factory masquerading as a higher education institution.
Does Biden even know who he’s excluding when he comes up with these proposals?
The answer could be “no”. The cost of college education has skyrocketed over the past few decades. Student debt is a whole different thing now than when Biden was in school (he graduated from the University of Delaware in 1965) or even when he was in the Senate. National student debt was around $ 250 billion in 2004; now it’s $ 1.5 trillion. Add to that the fact that the Department of Education doesn’t track debt by race, and there’s a good chance Biden doesn’t understand the scale of the problem or has an outdated view of who bears the debt burden. student in this country.
Schumer (Harvard ’71) and Warren (Harvard law professor, 1995-2011) know this. Instead of a false dichotomy between the elites and the tough Scrantonites that Biden thinks he is addressing, Schumer and Warren understand that debt relief helps everyone … help everyone. Debt relief, even for Ivy graduates, is an economic stimulus: people with less student debt can, you know, buy things on credit. Like houses. Debt relief also bridges the racial wealth gap and is a boon to the small business generation.
If Biden and his team have a policy reason that it’s better to write off $ 10,000 than $ 50,000, I’d be eager to hear it. But for now, his argument isn’t principled, it’s crap. It is based on a fundamental mischaracterization of the problem, designed to actively mislead those who will be helped the most by relieving more money. Harvard Invocation (2020-2021 tuition fees: $ 53,475), to justify not giving money to people crushed by the debt of Boston University (2020-21 tuition fees: $ 57,906) is just bad faith on stilts.
Student debt relief is a win-win that will help the people Biden claims to care about. Maybe instead of talking about it with his advice of crisp economic advisers – who probably give their grandchildren a ten dollar check to go see a movie – he should just do a survey of interns working at the White House. If he does, he might think of the young people drowning in debt all around him before casually rejecting a proposal to help them.