From the Editorial Board of The Washington Post:
Biden’s student loan announcement is a regressive, expensive mistake
[...] After weeks of anticipation, Mr. Biden announced he will extend the pause on student loan payments until the end of the year. He will also forgive up to $10,000 for those making less than $125,000 a year — and up to $20,000 for Pell Grant recipients under that income threshold. Both measures are ill-conceived and misdirected.
The loan pause, which President Donald Trump instituted in March 2020, was an emergency measure at a time when people were struggling to find jobs or had to remain home due to the pandemic. Thankfully, the situation is very different today: The unemployment rate for people with bachelor’s degrees and higher is just 2 percent. It’s hard to make the case that college graduates are still facing an unprecedented crisis.
The loan-forgiveness decision is even worse. Widely canceling student loan debt is regressive. It takes money from the broader tax base, mostly made up of workers who did not go to college, to subsidize the education debt of people with valuable degrees. Though Mr. Biden’s plan includes an income cap, the threshold does not reflect need or earnings potential, meaning white-collar professionals with high future salaries stand to benefit. Student loans, moreover, are a poor proxy for household income: An analysis by policy researcher Jason D. Delisle found that, in 2016, students from high-income and low-income families were just as likely to take on debt for their first year in an undergraduate program — and students from high-income families borrowed the largest amounts ...
I think Biden's decision is a bad one. If you want to help needy people with loans, forgive the loans of people who failed to graduate with a degree, or forgive the loans of people who are financially struggling (the $125,000 cap is too high).
I went to state colleges and didn't need a loan for my 4 year degree, but after I graduated with a BA in art and philosophy, I was hit with a double whammy ... I didn't get accepted into the graduate program in art, and I was diagnosed with
a rare degenerative eye disease.
I flailed about desperately (and got an essentially useless MA in history at the state college). But I just coulsn't find a good job with my degrees (this was the 70s), and I didn't know what I would be able to do in the future with damaged vision. The Dept. of Rehabilitation offered to get me a job putting sandwiches in vending machines ... I declined. I had a part-time job then, wotking for a laywer, and he suggested I go to law school because one can be a lawyer and be blind. I took his advice and signed up for the LSAT.
I didn't do that well on the test and it was late in the year, too late to get into the state university law school nearby, so I choose an expensive private school ... they would have accepted a chimp if it could pay the tuition. The only way I could go was if I took out a loan. I was terrified, but I was desperate and decided to do it.
Long story short, a really shy person is not cut out for law school ;) I went at night so I could work in the daytime. It took 4 years to complete the degree, but I was kicked out after 3 years. I had no degree and a student loan to pay back.
A lot happened then ... I got married, got a full-time job at a hospital that had nothing to do with my degree, and deferred paying my student loan by going to school part-time. Then my husband dumped me, I dropped out of school and my loan came due, and I moved to Oregon to be with my sister.
It took me almost a year to find a job there, and the one I finally got at another hospital didn't pay well. Every month I had that student loan bill to pay. That was back in the day when the bank to which the government had sold my loan could send me threatening bills with inch-high red lettering, when they could phone me and suggest I take out another loan to pay back their loan, etc.
After 3 years I came back here ... my sister had moved to Japan and I was lonely. I was again jobless and I finally consulted a lawyer about the loan I'd been slowly but dutifully paying back. He told me that people deemed disabled could have the unpaid portion of their loans forgiven. I was able to qualify for that. Thank God.
I know what it's like to worry about paying back a student loan, and I know what it's like to have that loan forgiven, but Biden's loan orgiveness plan doesn't really seem like a good way to help the needy ... the government does realize that there are over half a million homeless people in the US, right? This plan seems more like a bribe to get young upper-class people to vote for the Democrats (and I say this as a Democrat). I think this is a mistake.
