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On Monday, Democratic presidential candidate Sen. Elizabeth Warren (D-MA) released a plan to forgive student loan debt and make public colleges free, paid for by a wealth tax. Medium
The left generally believes this is a strong start to trying to address the student loan debt problem, while some are critical of the plan's scale.
“Americans have long agreed that 12 years of education is a public good. But that number — 12 — is clearly outdated. For people to compete in today’s economy, they’ll need more schooling. We can and should argue about whether the right number is 14 or 16. But it’s not 12… The Warren plan expends resources on student debtors from upper-income families, but it is still broadly progressive… Among low and moderate-income families — those in the bottom 40 percent of the income distribution — close to 90 percent of borrowing households would have their student debt wiped out compared to just under 30 percent of those in the top 10 percent.”
Jared Bernstein, Washington Post
“Because it caps forgiveness at $50,000, it won’t hand giant windfalls to lawyers and doctors by forgiving their entire law or medical school debt… It’s the best, basic blueprint a politician has produced for how to design debt forgiveness without making it a straight giveaway to the upper middle class.”
Jordan Weissmann, Slate
“College tuition is rising, in large part, because state legislatures across the country have slowly been abandoning their commitment to fund public colleges and universities… According to one analysis, state funding for public colleges and universities in 2018 was $7 billion below its 2008 levels — and that is after adjusting for inflation. One way public four-year institutions have stayed in business is by raising tuition by an average of 36 percent during that decade… At the very least, it is worth renewing the commitment by state governments to subsidize their local colleges and universities.”
Joel Mathis, The Week
“I don’t buy the argument that debt forgiveness is some sort of moral hazard… Yes, my loans are paid off, so I wouldn’t get a direct benefit. But if all those millennials freed of debt start bidding up house prices, then I get my benefit in the form of property appreciation. These things are connected. And if the morally questionable behavior at hand is ‘going to college,’ then I’m not exactly panicking… I have no illusions that a plan of this scope will pass anytime soon, and there’s no shortage of devils in the details. But kudos to Senator Warren for raising the question.”
Matt Reed, Inside Higher Ed
Critics posit that Warren’s “premise seems to be that student debt is all burden and no benefit, but this is not true: It represents an investment in skill acquisition that pays substantial long-term benefits. President Barack Obama’s Council of Economic Advisers estimated this lifetime ‘earnings premium’ at about $1 million over a worker with only a high school education. It’s not unfair to expect people to pay back their loans out of that income. What might be unfair is debt relief to the exclusion of other priorities with wider benefits, including to people who did not go to college at all… [What’s needed is] a targeted approach that relieves the worst financial stress of those least able to handle it, not a sweeping bailout for the middle class and above.”
Editorial Board, Washington Post
“There are obvious benefits to society to motivate as many people as possible to get as much education as they can. I’m just not sure that free public college for everyone and debt cancellation for almost everyone is the most sensible way of getting there… My attitude is also partly driven by my twin obsessions with universal health care and climate change. If we’re going to spend large sums of money, I want to spend it there first. After we’ve done that it will be time to see how much appetite we collectively have for additional big-dollar programs.”
Kevin Drum, Mother Jones
The right is critical of the plan, arguing that it would be unfair to those who chose not to attend college, and further exacerbate tuition inflation.
The right is critical of the plan, arguing that it would be unfair to those who chose not to attend college, and further exacerbate tuition inflation.
“It is extraordinarily unjust to the working class. Many blue collar people are living on lower wages because they couldn't afford to go to college. They chose the responsible route, stayed within their means, avoided buying something they couldn't pay for, and accepted a humbler lifestyle as a result. Warren and her Democratic cohorts plan to make fools of these people. It turns out they could have just gone to college, taken out the loan, and never paid it back…
“Whatever possible argument could be made for loan forgiveness would clearly apply just as much to any other form of debt -- mortgage, car, credit card, etc. If you're struggling with student debt and you're handed a get-out-of-jail-free card, and I didn’t go to college but I’m struggling to pay my mortgage, should I not be offered the same deal? If your debt is a public emergency, why isn't my debt also an emergency?”
Matt Walsh, The Daily Wire
“People who go to college typically earn higher incomes than those who don’t… Warren estimates that debt forgiveness would cost $640 billion. To put that in perspective, it would cost about $6 billion per year to double the earned-income tax credit — a federal program that subsidizes wages for low-income households — for childless workers. I’d rather spend the marginal taxpayer dollar expanding economic opportunity for the working poor than giving a subsidy to relatively well-off households…
“The U.S. already has a safety net in place to deal with those [unable to pay off their loans]. For example, income-based repayment plans adjust monthly student loan payments based on income and family size, and any outstanding balance is forgiven after two decades of payments have been made. Warren should explain why these programs are inadequate.”
Michael R. Strain, Bloomberg
“There are those who may have taken higher-paying jobs they didn't necessarily want to pay off loans. And there are those who have cut expenses to the bare bones to pay off loans while watching their friends with similar salaries eat out and travel and deprioritize paying off loans. Those who were more responsible will feel justifiably enraged at the idea that those who may have been more profligate will now get a bailout from the government.”
Philip Klein, Washington Examiner
“Warren’s proposal would likely expedite the rise in college tuition. It comes down to simply math: When colleges know the federal government is financing ‘free’ tuition in perpetuity, they’ll have all the more reason to raise tuition and fees, which taxpayers will then absorb… researchers Grey Gordon and Aaron Hedlund found that raising subsidized loan limits led to a 102% increase in tuition from 1987 to 2010. Absent that additional federal money, the authors estimate tuition would have only gone up by 16% on net.”
Lindsey Burke, Daily Signal
“Colleges hike their tuition every year because they can. The feds have been willing to increase loan amounts to match whatever colleges charge. The result? Every dollar lent inflates tuition by another 60 cents, according to Federal Reserve research. In this heartless scheme, students are mules, carrying dollars from Washington to campuses nationwide. Never mind if they ever graduate or land jobs to pay back their loans…
“It would be fairer to require colleges to refund a portion of the loan money to Uncle Sam when a student doesn’t make it to graduation. Colleges need to have skin in the game, so they’ll try harder to get students through the course of study and into the working world.”
Betsy McCaughey, New York Post
Have hen will travel: the man who sailed round the world with a chicken.
The Guardian
