Republicans Angry About Student Loan Relief, Hope to Stop It in Court
“Whataboutism,” the last refuge of selfish Americans, was a theme played up in media accounts
Forty three million people got some good news yesterday when President Biden announced a plan aimed at tackling the burden imposed by student loans. While most media accounts have focused on the promised $10,000 ($20,000 if Pell grants) in debt relief, what the administration is setting out to do includes other consequential elements that you should know about.
Those initial steps could completely wipe clean student debt for 20 million out of the 43 million eligible people, with 90% of relief going to people earning less than $75,000. And, thanks to the foresight of Senate Democrats in crafting the American Rescue Plan in 2021, student debt forgiveness will not count as taxable income.
It took a nanosecond for the nihilist set (Republicans, plus a few neo-liberal Democrats) to crank out predictions of doom and gloom, along with messages encouraging resentment by people who weren’t benefitting from the plan.
The very same people who thought trickle down (via Trump’s $1.9 trillion tax “cut” plan) was a good idea, and handed out now forgiven loans during the pandemic were outraged about Biden’s “student loan socialism” (Sen Mitch McConnell).
“Whataboutism,” the last refuge of selfish Americans, was a theme played up in media accounts. It’s almost as if certain editors wanted to generate controversy. (They did.)
Student debt cancellation is a great thing for millions of Americans and we should be happy for them. Their lives are getting easier and choices are opening up for people. And humans with an ounce of empathy aren’t bothered by the fact that they’re not personally benefiting from this right now.
Being terrible is a choice. The folks who oppose this program will go to extraordinary lengths to make sure the administration can’t benefit politically as the mid-terms near.
Far right pugilists, like Erick Ericson, think changes in the student loan system can be twisted up to the point where they can be bundled with bullshit claims like the oft cited and debunked insistence that Democrats want to (or have) defund police.
And Republicans won’t stop at misinformation and miserly mumbling. They’re going to sue, likely using the same track they used to successfully undermine environmental protections, namely that the executive branch lacks the power to do things not specifically enumerated by congress. If they get lucky, opponents of student debt reform will find a judge who will put a halt to the administration’s actions until such time as legal challenges are resolved.
I suspect they’ll wait until after the midterm elections, unless Republicans are stupid enough to think “taking” something away from people won’t piss them off. On the other hand, they did think that abortion was a non-issue.
This lawsuit is basically the same thing that’s going on with DACA; millions of people are left in limbo because congress can’t/won’t act and doing the right thing isn’t part of the agenda for people whose allegiance is to crusty rich dudes with nineteenth century outlooks.
Politico went out of their way to dig up naysayers and angry white men to denounce the administration’s plan, calling it a “centrist revolt.”. Here are former Clinton administration Treasury Secretary Larry Summers and former Obama administration economist Jason Furman:
Summers: “Every dollar spent on student loan relief is a dollar that could have gone to support those who don’t get the opportunity to go to college. … Student loan debt relief is spending that raises demand and increases inflation. … It will also tend to be inflationary by raising tuitions.”
Furman: “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless. Doing it while going well beyond one campaign promise ($10K of student loan relief) and breaking another (all proposals paid for) is even worse.”
The Washington Post editorial board was outraged at the debt reduction part of the plan, calling it “regressive,” and saying that congressional approval of Pell Grant expansion was the way to go.
There are a couple of obvious problems with these and similar assertions, namely that Congress as presently constituted will never in a million years pass any legislation benefiting persons who are not major dark money or campaign contributors.
Also, given that the economic pressures that fueled inflation have eased and that any additional spending by persons taking advantage of an increased income won’t happen right away, inflationary concerns are overblown. (I’d also like to point out that payments on student loans have been suspended for a couple of years now, so most people won’t see an actual bump in cash flow.)
Critics of the program who claim it’s a bribe for younger voters conveniently ignore the one million people over 60 who owe student loans, along with the very ugly reality that 70% of garnished social security goes to student loan fees and interests (not principal. (h/t Rep. Katie Porter’s whiteboard.)
A minority of lefties, disappointed that they didn’t get the whole enchilada, took to social media to complain. But most of what I saw online was people who were grateful.
A recent poll shows 55% support for canceling debt up to $10,000, with even stronger support among people aged 18 to 44 and Black and Hispanic people.
I think that large parts of the pundit class are showing just how out of touch they are. Ten thousand dollars (or twenty) and a shot of having a life less constrained by debt is a Big Deal for 43 million Americans.
Do they really think all these folks are going to forget this major change in their lives come election day? As somebody who is part of this beneficiary class via my daughter’s student loans, I’m certain the answer is No.
I think it’s much more likely a large number of voters will think of something (abortion rights) taken away by Republicans and something given to them by Democrats. Lest we forget, the women voters flocking to register to participate in the November elections hold two-thirds of student loan debt.
All we need to do is to get them to mail their ballots/give them a ride to the polls.
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If you’ve got questions about qualifications and details of this plan, visit the studentaid.gov website.
A few important facts, lifted from the White House information sheet on student loan reforms:
For undergraduate loans, cut in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income.
Raise the amount of income that is considered non-discretionary income and therefore is protected from repayment, guaranteeing that no borrower earning under 225% of the federal poverty level—about the annual equivalent of a $15 minimum wage for a single borrower—will have to make a monthly payment.
Forgive loan balances after 10 years of payments, instead of 20 years, for borrowers with original loan balances of $12,000 or less. The Department of Education estimates that this reform will allow nearly all community college borrowers to be debt-free within 10 years.
Cover the borrower’s unpaid monthly interest, so that unlike other existing income-driven repayment plans, no borrower’s loan balance will grow as long as they make their monthly payments—even when that monthly payment is $0 because their income is low.
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