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.
I may go to Yale & Harvard then they can FORGIVE my loans !!!!!!!