What happens to a student loan deferred?
Does it dry up
like Donald Trump’s skin?
Or draw interest—
Do payments ever end?Does it grow
into a mountain of debt?
Until an unknown number
calls you up to collect?Maybe it just sags
like a heavy load.
Until someone forgives it...And white people explode.
For most Americans not named Ivanka and those who can’t finagle their way into a Division I rowing scholarship, education is the likeliest path to financial stability. But the financial cost of pursuing the American dream also comes with a lifetime of debt. The estimated $1.6 trillion in unpaid student loans has created a grassroots progressive movement focused on student debt forgiveness.
However, when rumors about the possibility of President-elect Joe Biden using an executive order to cancel student debt began spreading on Donald Trump’s favorite ranting platform, there was some vocal pushback from small-government conservatives, libertarians and...
Let’s be honest—it was white people.
As with most political debates, people used bad-faith arguments or strawmen to present the other side of the issue. In an attempt to fully explain the #CancelStudentDebt conflict, we thought we’d examine some of the common arguments against debt forgiveness.
It won’t help Black people.
Have you ever heard the phrase, when white America gets a cold, Black America catches the flu?
Well, the student debt crisis is the coronavirus.
According to the Department of Education, Black college graduates have nearly twice as much student loan debt as the typical white grad. The National Center for Education Statistics reports that the typical Black borrower owes 114 percent of their original student loan debt 12 years after graduating with a bachelor’s degree. White students, on the other hand, usually owe 47 percent of their original debt.
Not only is this crisis exacerbated by higher Black unemployment, wage disparities and the racial wealth gap, but loan companies charge Black students higher interest rates. So, Black grads have less money before they attend college; earn less money after college and have to pay back loans at higher interest rates.
Joe Biden can’t do this without congressional approval.
Some people believe he can.
Elizabeth Warren thinks the Higher Education Act gives the secretary of education the authority to forgive student loans without congressional approval. But what does she know (besides having a little thing called a law degree)?
Also, remember how Trump used a National Emergency Declaration to build a wall with FEMA funds? Or how about when he used defense funds to do it? Think of student loan companies as undocumented debt collectors trying to sneak into your wallet.
Or maybe he can get Navient to pay for it.
Some people saved up for college or worked hard to pay off their student debt. They shouldn’t have to pay for others’ failures.
Seventy-seven percent of students finish college in debt, which is a lot more than the 54 percent of Americans who can’t swim. So why should your city spend hard-earned taxpayer money on lifeguards?
Student debt relief is no different from Social Security or any other iteration of the government safety net. For instance, most people who receive food stamps can actually afford to buy food. However, the Supplemental Nutrition Assistance Program supplements the income of low-income Americans so they can use their income for more pressing needs. The same holds true for Social Security and Medicare.
Your argument is essentially: I learned how to swim, so why shouldn’t I get to watch everyone else drown?
Student loan forgiveness is just another Democratic-sponsored government handout.
There’s no such thing as a “government handout.”
That’s our money. We get to choose what to do with it.
We choose to allocate defense spending for soldiers because we don’t want to speak Russian. We provide Medicare because we don’t want our grandparents to get the gout. We also bailed out banks, the auto industry and companies affected by the Trumpandemic.
Why not bail out the actual taxpayers?
Republicans would oppose it.
Probably. The Republican base is largely whites who didn’t attend college. Studies show that when white people attend college, they become more progressive. Plus, Black people would benefit more from debt forgiveness, and, as someone once told me: “Democrats want to inflict their policies on Republicans. Republicans want to inflict pain on Democrats.”
But recent polls show 65 percent of Americans, including many Republicans, support policies that erase student debt. A year earlier, the number was 58 percent. Republicans were once opposed to “socialized healthcare” and mandates against private insurers but now they support it because they like it.
Also, some Republicans are dumb.
Not all Black people support it.
Because some Black people are Republicans.
We can’t afford it without raising taxes.
That’s a lie.
In 2018, 91 Fortune 500 companies didn’t pay a penny in taxes and another 56 paid under 5 percent. Instead of the statutory 21 percent tax rate, the Fortune 500 paid an effective tax rate of 11.3 percent, meaning we lost $74 billion in revenue.
This means we could erase all the student debt that exists in 20 years using only the lost revenue of the 500 biggest corporations.
Why are we bailing them out?
Also, we can’t forget that freeing up people’s debt obligations means they have a higher taxable income, which means the government makes more money. More income also means college graduates have more money to spend, which means businesses make more money. Businesses making more money means they can pay the increased taxes.
See how society works?
This only solves past debt. We still need to address student debt going forward.
Yes. We need to fix a lot of things, including the rising cost of tuition; decreasing state and local contributions, and the lack of support for HBCUs. No one is saying we take this problem instead of those problems.
Perhaps we use the lost revenue from the companies ranked 501-1,000. The Buffett Rule (pdf)—closing tax loopholes by requiring billionaires to pay at least 30 percent in taxes—would actually lower the statutory tax rate and bring in $72 billion over 10 years, according to Americans for Tax Fairness.
What do we do with the revenue? Well, we make public colleges free, just like K-12 colleges. Again, there is enough money.
This teaches people to abdicate their personal responsibility.
Good point.
Everyone knows that the most frivolous, irresponsible people are the ones who dedicate years of their lives to educating themselves with no reward except future financial stability. Plus, everyone knows that wealth is the truest, most accurate reflection of a person’s responsibility, which must be the only reason higher-income people pay off their loans. And loan payments are the perfect way to teach these derelicts how the world works.
Of course, the financial industry shouldn’t be held personally responsible for lending money to people with no credit history or income. The government should be held responsible for backing bad decisions with taxpayer money. Colleges aren’t responsible for increasing tuition while making more profits. State legislators aren’t responsible for gradually decreasing state education funding.
Nah, it’s the students’ fault.
You’re right.
Banks might stop lending money if student debt was wiped away.
Why do you trust banks to keep your money when they lost so much of it during the 2008 financial crisis and still haven’t paid it all back?
Because that’s why they exist.
Also, most student debt forgiveness plans don’t just wipe out student debt; they use government funds to reimburse the lenders in some form. Student debt forgiveness wouldn’t prevent banks from lending money to students and most plans limit the amount that would be forgiven.
But this ain’t reparations, though.
Who said it was?
It’s a massive transfer of wealth.
Yep, it is.
You know what else is a massive transfer of wealth?
The corporate tax loophole, coronavirus PPP loans, inheritance tax exemption, stimulus checks, farm subsidies, HUD loans, every time Trump goes golfing at Mar-a-Lago, the defense budget, subsidizing private healthcare, Fannie Mae, Freddie Mac, the FDIC, private prisons, churches, tax incentives for corporations, publicly-financed sports stadiums, Beyonce concert tickets...
If we stopped doing things because they give taxpayers’ money to the rich, we’d have to stop building bridges, buying school buses and putting the internet in schools.
There are other choices.
You’re right. We can:
- Do nothing: We continue to let our teachers, scientists, artists and others wallow under a mountain of debt until the entire system crashes—and it’s going to crash—which will result in another giant bailout that will help the financial industry while creating no substantive changes for taxpayers, students, parents and the entire higher education system; or.
- Do something: I’m open to ideas.
- White people find something else to be mad about: Don’t they always?