Student debt forgiveness is rife with elitism
By Joshua Peters
President Biden announced on Wednesday that up to $20,000 of individual student loans would be forgiven in the recent move to forgive student debt. The eligibility for debt cancellation is as follows:
To be eligible, your annual income must have fallen below $125,000 (for individuals) or $250,000 (for married couples or heads of households).
If you received a Pell Grant in college and meet the income threshold, you will be eligible for up to $20,000 in debt cancellation.
If you did not receive a Pell Grant in college and meet the income threshold, you will be eligible for up to $10,000 in debt cancellation.
However, a lot of individuals are not happy about this incredibly elitist move by the White House. Senator Mitch McConnell, R-Kentucky, called the move “a slap in the face to working Americans who sacrificed to pay their debt or made different career choices to avoid debt” and “wildly unfair redistribution of wealth toward higher-earning people.”
Individuals like U.S. Sen. McConnell, R-Kentucky, are not wrong in holding this position. In 2020, the U.S. Census Bureau counted 258.3 million adults living in the United States. CNBC reported that about 44 million borrowers owe a collective $1.7 trillion in federal student loan debt. Therefore, in the broadest sense of the impact, this policy only applies to about 17% of the adult population in the United States.
Additionally, an analysis of President Biden’s student loan forgiveness plan by the Penn Wharton Budget Model found between 69% and 73% of the debt forgiven accrues to households in the top 60 percent of the income distribution.
So, what critics are highlighting is how brazenly elitist this move is by the White House to allow the children of the highest income earners to get a benefit, despite how privileged their lives have been.
And this is a fair criticism levied against Biden and the Democrats for which they have no answer. They can only offer misdirection.
Allies of the decision would like to point out that nearly 90% of relief money will go toward individuals making less than $75,000 annual income. So, what? In 2020, the median income for Americans with a high school degree and no college was $47,405. For those with no high school degree, the median income was $29,547. And these two income strata represent the majority of American adults. However, the median income for some college and bachelor’s degrees or higher is $63,653 and $106,936, respectively. So, highlighting that “less than $75,000 income earners are the beneficiaries” is meaningless when considering income across the distribution.
No matter how Democrats and their media allies spin this one, the policy will always come off as elitist opportunism. It is nothing more than throwing a bone to their base to keep them happy going into the midterms. According to the Pew Research Center, voters who identify with the Democratic Party are much more likely than their Republican counterparts to have a college degree (41% vs. 30%).
There is an astonishing sense in the country, I think, that the rich are taking from the poor to make their lives better. When did Americans start cheering for the Sheriff of Nottingham?