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Perspective: Biden’s student loan plan isn’t what Americans want

Findings from the forthcoming American Family Survey suggest that the proposal may be a problem, not a panacea

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Illustration by Alex Cochran, Deseret News

Twenty-five percent. That’s the number of Americans ages 18-29 who say that the forgiveness of $10,000 in student loan debt will significantly improve their finances.

The same is true of Americans ages 30 to 44. After that, the percentages get even lower; in fact, majorities of every age group over the age of 30 say student loan forgiveness won’t affect them at all, according to the forthcoming American Family Survey, an annual report of the Deseret News and Brigham Young University. Overall, only about 35% of all respondents said the plan announced Wednesday by President Joe Biden would help them either a lot or a little.

But this reality is not reflected in the jubilant reaction to Biden’s announcement by some progressives.

Massachusetts Sen. Elizabeth Warren tweeted that the plan will be “transformative for the lives of working people all across this country.” The move, she said, “is a powerful step to help rebuild the middle class.”

The American Family Survey suggests otherwise. The findings reveal the plan to be a political stop-gap that benefits a minority of people. Only about 40% of Americans go to college at all, and not all of them have federal loans. And as people on social media, including Princeton University professor Robert P. George, were quick to point out, the people generally thought of as “working people” — also known as “the working class” — will be helping to pay the bills of those who did.

Biden’s plan would forgive $10,000 in student debt for individuals earning $125,000 a year or less —up to $20,000 for those who also received Pell Grants. The announcement was the fulfillment of a campaign promise; weeks before the 2020 election, Biden told young people in Miami, “I’m going to eliminate your student debt if you come from a family (making less) than $125,000 and went to a public university.”

To be sure, there are many college graduates and current students celebrating the news, including many who are in graduate school. More than half of student loan debt belongs to people with master’s degrees and doctorate degrees — not exactly the “working people” that most people think of when they hear the term.

The Wall Street Journal reported that Biden’s plan will cost taxpayers $300 billion, at minimum, over a decade and add to the federal deficit. That amounts to about $2,000 per taxpayer, according to estimates from the Wharton School at the University of Pennsylvania. That means that the 60% of Americans who didn’t go to college will help to pay the debt of those who did, and the announcement comes at a time when millions of Americans are already struggling financially because of inflation.

Progressive Democrats who wanted Biden to do more — canceling $50,000 in debt or even all of it, as Vermont Sen. Bernie Sanders proposed — have been saying for months that the party would suffer in the November midterms because of Biden’s inaction. But the party may suffer equally because of Biden’s action, which made people unhappy on both the left and the right.

NAACP president and CEO Derrick Johnson called the plan a “devastating political mistake” in a piece co-written with Wisdom Cole. Arguing that more relief is needed, Johnson and Cole said that Biden’s plan “would do little to help.”

Indeed, the plan helps a subset of young Americans whose economic prospects are better than the rest of the citizenry by virtue of having a college degree, and who tend to vote for Democrats anyway. As FiveThirtyEight reported, “In 2020, around 60 percent of 18- to 29-year-old voters cast a ballot for Joe Biden, making them the most Democratic-leaning voting group by age.”

But support among this age group has dropped dramatically since then, and so Biden has just made a $300-billion bet with our money that he can win them over again, despite the fact that the math doesn’t work.

Some 43 million Americans have student debt that stands to be at least partially forgiven; you need millions more votes than that to be elected president. And far more Americans are angry about this plan — either angry that Biden didn’t go far enough, angry that they’ve responsibly paid their student loans off or angry that they couldn’t afford to go to college at all but now have to pay the bills of those who did. The plan is yet another risky move for Biden and his party, but one that will cost all of us.