In Wiping out student loans isn’t progressive, it’s a gift to the affluent, the New Jersey Star-Ledger editorial board (SLEB) made some surprisingly good arguments against federal government student loan “forgiveness”, given its Leftist orientation.
True, the SLEB isn’t fully consistent. It makes an exception to its “no loan forgiveness” premise for “people in need”. The lowest earning quarter of Americans, the SLEB observes, holds only 12% of all student debt, so across the board forgiveness would bail out mostly upper middle class borrowers, which it says is unprogressive and unfair. Pushing back against “Progressives like Alexandria Ocasio-Cortez,” who are “are urging President Biden to wipe away all student loan debt,” the SLEB makes a pretty good statement against the Progressive demand, citing the moral hazard involved in such a scheme:
First, how can we give a broad handout and exclude people who didn’t go to college, those in the most difficult financial circumstances?
Look at it from the perspective of someone who took out loans and just finished paying them off, too. Now the government announces it’s going to pay off all remaining student debt? You’d be livid [That’s for sure!].
And it dishonors the sacrifices of people who worked hard and organized their lives around not taking out huge loans. They may have wanted to go to college but decided against it, precisely because they didn’t want to take on the debt; or worked multiple jobs, lived at home and gone to great lengths not to borrow while in college.
“You’d say, why didn’t I borrow that money? I turned down a gift – but I didn’t know it was going to be a gift,” says Sandy Baum, an expert on higher education at the Urban Institute. Those people would understandably feel ripped off, and Republicans would have a field day with that.
Consider, too, that if we broadly wiped away student debt, the people who would get the biggest subsidy are those who took out the largest loans to pay for costly graduate degrees. This, in turn, helps them earn higher salaries so they don’t struggle as much to pay off their debt.
If loan forgiveness is so unfair, how is it any less unfair if only “people in need” are bailed out? Such is the contradiction inherent in need-based welfare schemes. Still, it’s nice to read a Leftist voice expound this argument. It’s also nice that the SLEB acknowledges the individual responsibility of those who take out these loans to begin with, rather than simple-mindedly blame “predatory lenders”. That’s progress.
True, the SLEB doesn’t address the unfairness and violation of individual rights of using taxpayer money to fund (or guarantee) these loans. The SLEB also channels the Egalitarian red herring, saying undiscriminating loan forgiveness is not only “costly” to the taxpayers but an “ineffective way to reduce economic gaps”—as if wealth gaps are actually a problem (government coercion to reduce economic inequality is actually very unfair).
Then the SLEB pivots to a favorite whipping boy:
A blanket loan forgiveness program is not sensible, but targeted action would be. He could start with victims of sleazy for-profit schools that exploit the poor and deliver useless degrees after taking out federal loans – they shouldn’t have to spend their whole lives in debt. Neither should low-income parents who borrowed beyond their means to give their kids a better head start.
What about the vastly greatest number of victims of sleazy non-profit or public schools and colleges? The so-called student loan crisis is across the board. Why pick on a tiny subset of higher education, the for-profit or career college sector? If some are guilty of misleading students and their families, they’re not alone. Why single them out? Because the Left hates private education.
The SLEB dilutes its own point by swinging to anti-for-profit propaganda. Nonetheless, it’s right in principle, if not consistency, to note the basic unfairness of federal student loan forgiveness.
Related Reading:
Is 'I didn't get it, so others shouldn't either" a Valid Argument Against 'Free' College]
Student Loans Should Be Repaid
Hillary Picks Up Obama’s Attack on For-Profit Colleges
Stamato's For-Profit College Hatchet Job
Some Relief, and Fairness, to For-Profit Colleges, Thanks to DeVos
Equality and the American Dream by C. Bradley Thompson
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