How politically beneficial is student loan forgiveness? : NPR

President Joe Biden speaks on student debt cancellation in the Roosevelt Room of the White House on Wednesday, while Education Secretary Miguel Cardona listens on the right.

Evan Vucci/AP


hide caption

toggle caption

Evan Vucci/AP


President Joe Biden speaks on student debt cancellation in the Roosevelt Room of the White House on Wednesday, while Education Secretary Miguel Cardona listens on the right.

Evan Vucci/AP

President Biden’s announcement to forgive up to $10,000 in federal student loan debt and up to $20,000 for Pell Grant recipients has sparked excitement among progressive Democratic lawmakers. But the high cost of the plan has put some moderate Democratic candidates on edge.

Wednesday’s announcement builds on the momentum of Biden’s summer successes in passing major legislation on climate, health care and veterans’ benefits. And it comes just months before the midterm elections – at a time when Biden approval rating hovered around 38%, although according to a Gallup poll in the days just before the announcement, it appreciated a rise to 44%, its highest in a year.

The move affects 43 million borrowers and specifically targets black borrowers, who, on average, need to take out more loans to pay for college and take longer to repay compared to their white counterparts. Overall it’s a politically popular decision.

“The Democrats needed it,” Brookings Institution senior fellow Andre Perry told NPR. “I tend to believe that the people who enforce the policy will win the day. … We’re months away and Biden is gaining momentum at the right time.”

Republicans immediately spoke out against canceling student debt after Biden’s announcement.

“President Biden’s student loan socialism is a slap in the face to every family who has sacrificed to save for college, every graduate who has paid off their debt, and every American who has chosen a certain career path or gone volunteer to serve in our Armed Forces to avoid going into debt,” Senate Minority Leader Mitch McConnell said. “This policy is surprisingly unfair.”

Biden told Republicans he would not apologize for taking action to help middle- and lower-income Americans. And the White House further pushed its position with a viral tweet thread released Thursday night, targeting Republican lawmakers who took out Paycheck Protection Program (PPP) loans early in the pandemic. These loans, however, were not designed to be repaid.

But the skepticism doesn’t just come from the GOP. Moderate Democrats, especially those who have been in tight Senate races this year, have also expressed concerns.

Ohio Senate candidate Rep. Tim Ryan, a Democrat, said Wednesday that the plan sends the “wrong post” to people in Ohio who don’t have a college degree. Ryan takes on Trump-backed Republican JD Vance in one of the nation’s tightest Senate races.

There are also concerns about the cost of the plan

Another concern is the very cost of canceling student debt. University of Pennsylvania estimates show that the plan could cost around $1 trillion.

Colorado Senator Michael Bennet, who is up for re-election, said Wednesday that the White House should have come up with a more targeted plan and a way to pay for it.

“While immediate help for families is important, one-time debt cancellation does not solve the underlying problem,” Bennett said. “Moving forward, we need to reform the system that got us here in the first place with solutions to reduce the absurd cost of college. …And we need to continue our work to create career paths to safety economic for every American, including those who choose not to pursue a two- or four-year degree.”

Bennett’s opponent, Joe O’Dea, wrote in an email to supporters: “Joe Biden’s student loan forgiveness program does not wipe out debt. It puts $300 billion in new debt on the backs of American workers. Debt is a national crisis. It makes it worse.”

Some pundits say it’s still a political win for Biden

Despite the pushback from Republicans and some Democrats, Perry says getting young people to vote because of debt cancellation will make a critical difference in the election. And he adds that the argument that student loan debt forgiveness is “unfair” is unlikely to turn voters against a candidate.

“It certainly energizes young people and people in debt, which also includes many Republicans. I think it will have more of a unifying effect than any negative political consequences he may face,” Perry said.

“Overall, this is a political victory for Biden because he delivers on his promises, he has a chance to tackle some indebted moderate Republicans. … It’s a universal problem.”

Perry also says that even groups and lawmakers calling for more debt cancellation will have to applaud Biden’s announcement and stay in touch with the president, which he says is a “cunning” move on the part of the government. President.

Dominique Baker, professor at Southern Methodist University and education policy expert, said that while there is not enough research to say how this policy of debt cancellation will play out politically, previous research shows that student loan cancellation has a “material improvement” on people’s lives.

“We’re seeing that people can move around the country more easily, they’re making more money, they’re able to reduce the share of defaults they have on things like credit cards and other types loans,” Baker said. “It seems like one of the best ways to govern is to try to do things to make people’s lives better, and then make sure people know you’ve done things to make their lives better.”

Baker added that because Biden was including more debt forgiveness for Pell Grant recipients specifically, the benefits would extend more to black and Latino borrowers.

And for some borrowers, that gives some hope – and potentially motivation to go to the polls.

“It’s like a beacon of hope in the realm of despair when everything else is going wrong,” Sean Wiggs, a UNC Charlotte junior and digital strategist for Gen-Z for Change, told NPR.

With Biden’s announcement, Wiggs will see some of his debt forgiven and he says it’s a good first step – and one he believes will motivate his peers to vote.

“A lot of people who may have been apathetic about voting said, hey, if the government is really working for me, then why wouldn’t I go vote?” he said.

About Kimberly Alley

Check Also

How to get a good interest rate for a personal loan

Interest rates are on the rise as the Federal Reserve tries to fight record inflation. …