Biden’s student debt plan is cautious – and compassionate

Hard cases make bad laws. Recently Highlighted PBS NewsHour pitiful cases Americans suffocating under college debt whose plight – if it becomes dominant in the loan forgiveness debate – will produce terrible legislation. (As usual, I speak for myself, not for Boston University, my employer.)

Scott Rennie borrowed to earn a bachelor’s and master’s degree in environmental education. He still owes $ 68,000 in loans, 15 years after graduating, and has yet to find full-time work in his field. PBS reports he scraped $ 27,000 last year as a handyman; and his debt-to-income ratio scared off lenders who could have funded his dream of an outdoor education program.

President Biden would write off $ 10,000 in loans for Rennie and other student debtors. But Massachusetts Senator Elizabeth Warren, Congresswoman Ayanna Pressley and other progressives, willing to fire a blunderbuss when marksmanship would do, have introduced a resolution insisting that the president increase the stake to $ 50,000.

Unsurprisingly, Rennie agrees. “Thank you, Mr. President,” he told NewsHour, “but [$10,000 is] not enough. We need a complete cancellation of this debt. Since even the big spenders don’t offer this, he’s going to be disappointed. What they are The offer would cost more than Biden’s plan, which might be justified if Rennie were typical of the 45 million Americans with collective federal student debt of $ 1.7 trillion.

But that’s not the case, as the pros at NewsHour reported: “The biggest beneficiaries of student debt cancellation would be the relatively higher incomes.”

Forgive about $ 10,000 … would target aid to the poorest

Biden’s newly signed COVID-19 relief plan keeps any income under student loan forgiveness tax free, increase the pressure to draft a law on forgiveness. This will be on the minds of borrowers and activists first and foremost as we approach our annual meeting with the IRS next month.

So keep these facts in mind: Households earning more than $ 74,000 owe nearly 60% of school debt. (The median family income is $ 78,500.) Households with higher education degrees – with incomes significantly above the median – owe 56% of student debt. Most student debt is contracted by Holds a doctorate in medicine, an MBA, a doctorate in medicine and a bachelor’s degree in business and nursing.

A “Brahmin rescue“Doctors, lawyers and executives who are supposedly at the end of their rope, even the socialists / social democrats People Draft policy (their adjectives, not mine), for the same reason, Donald Trump’s tax cuts for the rich troubled anyone who was not in a coma. “The cancellation of student debt increases the toll of people who attended university,” notes the People’s Policy Project, “while doing nothing for people who did not attend university, even if the latter [are], on average, worse in many ways. “

This is why Biden’s proposal passes both the economic test and the compassion test.

Forgiving about $ 10,000 (there might be some defensible common ground between hers and the progressives’ offers) would target aid to the most needy: almost all Americans who borrowed money for college and then dropped out, keeping debt while quitting college income bonus to pay it. They default to triple the rate borrowers with a diploma.

For those who could have continued their college education, quitting was their own foolish choice, certainly. Why should taxpayers help them? Partly because systemic injustice robs many of a good chance of getting college and university loans long before they make bad choices. Unpaid wealth theft in the past and discrimination at work in black Americans who, going down the graduation platform, usually have to 50% more debt than whites and default at higher rates. Women, meanwhile, make up two-thirds of student debtors, according to NewsHour, and face the gender pay gap in trying to repay.

Biden’s COVID-19 Relief Plan … Makes Any Income Withheld From Student Loan Forgiveness Tax Free

The fact that we have just emerged from a presidential administration which pimp for for profit predatory colleges. And college shouldn’t be unaffordable to begin with. Rather than indulge in progressives who have forgotten their opposition to freebies to the rich, Uncle Sam had better spend the money to make our universities and colleges tuition-free. (Remember they were created to educate the “son of toil. Funded with existing federal financial assistance for the college, which would simplify and strengthen a “disperse»Aid scheme.

To his credit, Biden has adopted the free courses. Some advocate that the federal government automatic student enrollment in “Reimbursement based on income” programs that forgive or tailor payments to what people can afford. Throw in reform of our anti-poverty programs to better help those in debt, and Biden’s prudent debt cancellation, and you have a campaign on multiple fronts to fulfill a legitimate government obligation to the needy.

This is not the case with the promiscuous promiscuity of the progressives, intoxicated by far-reaching thought spawned by a year of costly crises, and four years of our pathologically indifferent 45th president. The leeway for government borrowing and spending offered by low interest rates allows us to go further. But spending large amounts of taxpayer money also increases the imperative for wisdom.

The aforementioned education reforms, along with Biden’s plans for COVID-19 relief, infrastructure and healthcare, point the way down wide and wise guardrails.

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