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Kamloops News

THOMPSON: Biden was right to cancel student loans

September 05, 2022 - 12:00 PM

 


OPINION


“You can please some of the people all of the time, you can please all of the people some of the time, but you can’t please all of the people all of the time.” If ever there was a quote that sums up public reaction to eliminating student loan debt, it is this pearl from John Lydgate, an English monk who lived more than 600 years ago.

At least half of those reading this column are probably thinking aloud, “Isn’t that an Abraham Lincoln quote?” Short answer: no. While attributed to “Honest Abe” for at least 164 years…at best he stole it without giving the old monk credit. But since no evidence exists that Lincoln ever actually used it in a speech or his writing…I’ll simply offer: “You can please some of the people all of the time….” Well, you get my point.

On Aug. 25, President Joseph R. Biden fulfilled his campaign promise of providing student debt relief…helping 45 million people, including wiping out the school debt of 20 million Americans.

Of course, this executive action isn’t as good or as fair for America as Biden’s $1.9 Trillion American Rescue Plan in 2021…which lifted 12 million Americans out of poverty and cut child poverty in half. The U.S. avoided a recession and despite Republican efforts to thwart that plan’s success by ending child tax credits…Biden’s plan stands as the most effective economic stimulus legislation in history. And his debt relief plan is just as bold and will help - not hurt - America.

Now Republicans are back at it…stoking the fires of their favourite pastime…turning Americans against Americans. The entire student debt issue is complex and ultimately begs the question…why has education become so expensive…and why haven’t politicians done something about it?

Meanwhile, Republicans haven’t had an economic or stimulus plan that worked well for Americans for a generation. As you might recall, Trump’s 2017 Tax Cuts and Jobs Act was mostly a giveaway to the ultra-rich and corporations.

The wealthy are still licking their chops in anticipation of their biggest gain under Trump’s plan - $61,090 less in taxes in 2025 - for the richest one percent of Americans. By comparison, households earning less than $91,700 save just $400 in 2025.

So, as we discuss Republican outrage over helping those burdened by student debt…realize that the 2017 Republican tax giveaway will cost taxpayers more than $2 Trillion after all is said and done. Biden’s student debt relief will cost about $300 Billion. Can you spell h-i-p-o-c-r-i-s-y?

Borrowers are eligible for up to $20,000 in debt cancellation for Pell Grant recipients with loans held by the Department of Education, and up to $10,000 in debt cancellation to non-Pell Grant recipients, if their individual income is less than $125,000 ($250,000 for married couples).

Of course, Republicans and their propaganda machines - Fox News, Breitbart, OAN, NewsMax and CBN - are busy muddying the waters for millions of folks. It’s telling that nearly half - 48 percent - who trust these Right Wing media outlets also believe that "there is a storm coming soon that will sweep away the elites in power and restore the rightful leaders."

A Right Wing friend tells an anecdote about how a husband-and-wife team of prospective doctors or lawyers can scam taxpayers for $40,000 under Biden’s debt relief plan. Never mind that his assumptions - that doctor or lawyer couples earn less than $250,000 and both had Pell grant loans - might represent one-tenth of one per cent of those getting debt relief. Also, a reminder…most doctors and lawyers in America mostly come from wealthy families…not from families that earn less than $60,000, which is required of Pell grant recipients.

Never mind, too, that living in places like New York City, Brooklyn, Washington, D.C., Los Angeles, Boston, San Francisco or Honolulu means that a $250,000 combined income places a couple $100,000 under what it takes to live a middle-class lifestyle. That combined income doesn’t qualify the couple to buy a house in those cities…or even afford the typical apartment rent of $4,000 a month.

The Right’s misleading information - were it true - might really signal some gross unfairness in cancelling student debt. For example, my Right Wing friend tries to convince folks that those benefiting from student debt relief are wealthy folks…maybe even attending private universities…all at taxpayer expense. Rare as hen’s teeth as my dad used to say.

Actually, ninety percent of those getting debt relief earn less than $75,000. Right Wingers would like everyone to believe that it’s the liberal elite who are too lazy to work and repay loans that are benefitting…people going to woke private schools.

Millions of students came from blue-collar, low-income families who learned everything from truck driving and culinary arts to plumbing and electrical work…as well as attending two-year colleges and four-year universities.

More than 188,000 borrowers attended schools that took part in deceptive or illegal practices. Indeed, many - like ITT Technical Institute, Corinthian Colleges, Court Reporting Institute and Martinelli Schools of Beauty - are now bankrupt and no longer in business.

Some 323,000 people who are totally and permanently disabled no longer have to pay $5.8 Billion in debt for education that they can no longer use. Also, the plan forgives loan balances after 10 years of payments - rather than 20 years - for borrowers with original loan balances of $12,000 or less. That means nearly all community college borrowers will be free of school debt within 10 years.

In Canada, the average student loan debt is now $28,000 for a bachelor’s degree. Borrowers using the federal Canada Student Financial Assistance program typically take between nine and 15 years to pay off their debts. As in the U.S., forgiving debt is fraught with the same ideological arguments here in Canada...with the Right hating it and the Left loving it.

Just a two percent federal wealth tax on the very wealthiest Canadians could net $363 billion in one decade, according to the Canadian Centre for Policy Alternatives. That would erase all of Canada’s student debt and create a publicly funded university system for all.

A university degree still means a better path toward financial security…a Georgetown University study in 2019 found college grads on average earn $1 Million more than high school grads. Not everyone wants or needs a university degree…but if you want it…it shouldn’t be as difficult as it is for today’s youth.

Back in the States, the best arguments for Biden’s plan are what hasn’t happened…decades of political paralysis around fixing an educational funding system…increases in tuition prices and student borrowing. Things have changed since I earned a degree from the University of Florida in the 1970s…helped by a G.I. Bill that virtually paid the $3,500 tuition for four years.

Today, a single college course at a top university can cost $4,000 or more. Tuition costs have tripled in the past 20 years. The Department of Education made a big mistake outsourcing loans to private companies that often preyed on those who could least afford loans. People of colour…women…are among the most disadvantaged over the past 50 years.

And those politicians - all Republicans and some Democrats in Republican states - could make their charges of unfairness go away by offering those who paid back debts…a $10,000 or $20,000 tax credit. But Republicans - as they have shown with issues like healthcare - aren’t in the business of solving problems for all Americans.

Student debt forgiveness isn’t an expensive Band-Aid or a giveaway that ignores educational reform. Student loan debt and educational reform are two separate issues. Republicans and Democrats have had decades to make things right…and what they accomplished instead was making it easy for most students to assume a mountain of debt.

Look, America bailed out bankers - the perpetrators rather than the victims - when public policy made bad mortgages the norm just 14 years ago. Public policy should right this wrong as well…reversing a policy that preys on students and families who can least afford it. It’s simply the right thing to do.

— Don Thompson, an American awaiting Canadian citizenship, lives in Vernon and in Florida. In a career that spans more than 40 years, Don has been a working journalist, a speechwriter and the CEO of an advertising and public relations firm. A passionate and compassionate man, he loves the written word as much as fine dinners with great wines.


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