The War on Student Debt Relief Begins
The War on Student Debt Relief Begins
The war on student loan debt relief begins with the usual: hysteria and a basic lack of research.
The Newsweek article popped up in my Google News feed like many right-wing slanted articles for some reason, which I don’t care to read because they have a historical pattern of factless hysteria and incompetent think-tanks that are nothing more than conservative echo chambers meant for propaganda.
The article in question was titled, Student Loan Debt ‘Your Own Fault’: Conservatives Blast Biden Forgiveness Proposals (Fearnow, 2020). The very first paragraph ends with the statement, “claiming taxpayers and poor Americans will end up paying for any forgiveness proposal.” This is an interesting claim considering that in 2012, Conservatives told us that the poor don’t pay any taxes. In fact, they created a Facebook page devoted to it called, “We are the 53%,” https://www.facebook.com/We-Are-the-53-Percent-241858602529232/. According to Derek Thompson writing in the Atlantic, “Since 2000, the poorest 40% of households have averaged a federal income tax rate below zero.” So the claim that the poor are going to pay for student loan debt forgiveness has no basis in fact or evidence, but that didn’t stop Newsweek from allowing the claim to move forward. The article provides zero evidence that the poor and working-class will be the ones to pay for debt relief. None. Zero. Zip.
Let’s see who Newsweek did cite in the article:
- “right-leaning think tanks and financial advisers”
- conservative TV host Trish Regan
- Brad Polumbo, a fellow at the libertarian Foundation for Economic Education (FEE) think tank.
- Larry Summers of Harvard and more https://en.wikipedia.org/wiki/Lawrence_Summers
- Constantine Yannelis of the Brookings Institute
- New York Post columnist Jonah Goldberg
- Douglas Holtz-Eakin of the conservative think tank American Action Forum
- The Wall Street Journal
- Bernie Sanders
Yet, no one provided any evidence that the poor would end up paying for student debt cancellation.
One of the more interesting quotes, “Former Obama-era treasury department leaders, among them Larry Summers and Constantine Yannelis, say college graduates ‘made an investment in themselves,’ and are attempting to push this financial burden onto the average U.S. taxpayer.”
The problem with the quote is that I couldn’t find any evidence that Yannelis said this. Summers did, but the quote is taken out of context.
Here is the full quote:
“I’d be rather skeptical of across-the-board, massive student debt reduction programs because I think many of those programs would benefit the well-off who made an investment in themselves, [and who] are earning a high return on that investment,” As you can see, Summers isn’t against student debt relief, just across-the-board relief because as he puts it, some of these students are earning a high return on their investment (Swaminathan, 2020). Most proposals do, in fact, put limits on how much someone can be earning when getting debt relief. A fact Newsweek conveniently excluded.
However, the biggest problem with the Newsweek article is what was left out: The fact that the biggest student debtors are indebted to for-profit colleges and universities (Looney & Yannelis, 2015), such as Trump University which turned out to be a scam like many of the others. These for-profit schools were vetted by the Department of Education and included in student loan programs; thus making the government accomplices in the scam. In other words, the student debt problem was one created by free-market conservatives so that they could rip off working-class poor people with debt that can’t be put into bankruptcy while we have a president who filed bankruptcy eight times. Funny how conservatives never point out that these corporate bankruptcies raise the cost of borrowing for everyone, especially the poor who pay outrageous interest rates.
Another fact that the Newsweek article left out is how the cost of college is directly related to the governments’ withdrawal from higher education funding, which started with President Reagan’s disdain for knowledge and intellectual curiosity. Younger people should be told the facts. That up until and through the mid-1970s, college was next to nothing and free in places like California (Stone, 2016) (Skelton, 2020).
Fearnow, Benjamin. (2020, November 21). Student Loan Debt ‘Your Own Fault’: Conservatives Blast Biden Forgiveness Proposals. Newsweek. https://www.newsweek.com/student-loan-debt-your-own-fault-conservatives-blast-biden-forgiveness-proposals-1549279
Looney, Adam & Yannelis, Constantine. (2015, Fall). A crisis in student loans? How changes in the characteristics of borrowers and in the institutions they attended contributed to rising loan defaults. Brookings. https://www.brookings.edu/bpea-articles/a-crisis-in-student-loans-how-changes-in-the-characteristics-of-borrowers-and-in-the-institutions-they-attended-contributed-to-rising-loan-defaults/
Skelton, George. (2020, January 20). Column: Free tuition at California public colleges helped the state prosper. There’s no reason it can’t again. Los Angeles Times. https://www.latimes.com/california/story/2020-01-20/skelton-california-santiago-tuition-free-college-bill
Swaminathan, Aarthi. (2020, November 21). Former Treasury Secretary Larry Summers is ‘skeptical’ about student loan forgiveness. Yahoo Money. https://money.yahoo.com/student-loan-forgiveness-larry-summers-skeptical-173401447.html
Stone, Michael. (2016, April 4). What Happened When American States Tried Providing Tuition-Free College. Time. https://time.com/4276222/free-college/
Thompson, Derek. (2012, January 5). The GOP’s Weird Obsession With Poor People Not Paying Enough Taxes. The Atlantic. https://www.theatlantic.com/business/archive/2012/01/the-gops-weird-obsession-with-poor-people-not-paying-enough-taxes/250928/