Student debt relief is flawed but well-intentioned

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Marco Rubio says he still owed $100,000 in student loans when he joined the US Senate 12 years ago.

Whatever an expensive college education had taught him, it wasn’t humility, tact, or empathy.

Rubio sued Fox for criticizing President Biden’s student debt relief program from the perspective of someone who repaid his loans.

But how, exactly?

“I wrote a book, and with this money, I was able to pay for it. Otherwise, I’d still pay for it, okay? said the deaf senator.

For the roughly 42 million Americans (one in eight) who have student debt, winning a Senate seat and securing an $800,000 book publishing advance is not a helpful example of how to reimburse.

Rubio’s remark is useful, however. It shows how out of touch he is with the financial pressures his constituents face, and it exposes the superficial hypocrisy of the partisan meltdown following Biden’s announcement.

Most people seem to think the plan is either a good idea or doesn’t go far enough. Those who don’t care are a minority. In other words, it’s good politics.

Of the criticisms, the most unnecessary are that it’s unfair to people who haven’t gone to college or who have already paid off their student loans.

Outside of Social Security and Medicare, just about every government program helps some specified beneficiaries and not others. It’s supposed to balance out.

The companies — some owned by GOP members of Congress — have received about $800 billion in paycheck protection loans, nearly all of which have been or will be forgiven. Paul Krugman writes in The New York Times that only about a quarter of them supported jobs threatened by the pandemic. The rest? “Indeed, a gift.”

Corporate farms receive crop subsidies. Thirty-nine major corporations paid no taxes for three years after a Republican Congress passed Trump’s relief package. Itemized deductions for mortgage interest are skewed in favor of people with larger mortgages and higher tax rates.

People who didn’t go to college need doctors and nurses who did. Their children need college-educated teachers.

Objectors like Rubio address selfishness and envy – quite the opposite of the message contained in the biblical parable of the prodigal son.

With its income eligibility limits and additional forgiveness for people who received Pell grants — $20,000 instead of the standard $10,000 — student debt relief is clearly aimed at the needy rather than the greedy.

There are valid concerns about Biden’s plan. This does not replace his promise to make junior colleges tuition-free, which did not please the senses. Joe Manchin and Krysten Sinema.

It does nothing to restrain tuition and fees, which have exceeded inflation. Indeed, the plan may actually incentivize colleges to keep raising costs.

Nothing prevents colleges from enrolling too many graduate students for whom there will be no jobs, a practice that only benefits college professors. Graduate schools are the main driver of larger individual debts.

The forgiveness plan may also be slightly inflationary, but it will stimulate home purchases, especially for first-time buyers.

Too many people, especially those earning too much to qualify, will be stuck with big loans and devilishly compounded interest, while others might not believe Biden’s insistence that it’s all about a one-time thing and borrow too much expecting relief later. .

The most serious objection, arguably, is the precedent of a president implementing something so large and costly through executive action – $240 billion over 10 years, according to Biden’s estimate. .

Certainly, Congress lacked action on this issue. But only Congress can provide what is clearly missing from the Biden plan: allowing student debt cancellation in the event of bankruptcy.

The only legal way to get rid of it now is to be totally and permanently disabled. The bankruptcy exception rewarded lobbying at its worst. Biden himself is partly responsible for this, perhaps the strongest Democratic voice in the Senate in favor of the 2005 student loan exemption law.

The pros and cons of student debt relief must be weighed against one unchanging fact: society is better off with a well-educated population. This is why college education is free in 39 other countries, from Argentina to Uruguay, including all the Scandinavian countries, France, Germany, India, Italy, Russia and Turkey.

State legislatures used the federal student loan program to neglect their responsibilities to higher education, and students had to pay the difference. Florida cut funding per student by $1,306 (14%) from 2008 to 2018, according to the Center on Budget and Policy Priorities, and tuition fees have increased.

A 2020 Brookings Institution study noted that outstanding student loans soared to $1.5 trillion, second only to mortgages on household debt. College was still a good investment for the most part, and only 6% owed more than $100,000, the study found.

A middle-class lifestyle was once within reach of anyone with a good high school education. The demise of that American dream led to the student debt crisis and Biden’s flawed but well-meaning attempt to deal with it.

The Sun Sentinel Editorial Board is comprised of Editorial Page Editor Steve Bousquet, Editorial Page Associate Editor Dan Sweeney, and Managing Editor Julie Anderson. Editorials are the opinion of the Board of Directors and written by one of its members or a designated person. To contact us, write to [email protected].

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