Thanks in part to tithing, BYU offers a reduced tuition that leaves few of its graduates in debt. My law school, unfortunately, does not have the same community support. At my hooding ceremony, I had accumulated more than $250,000 in student loan debt. Now, as a practicing lawyer, I make enough money to provide for a growing family and have never missed a debt payment. I save, repay my loans, give to my church, and play golf on occasion.
President Joe Biden wants to give me $10,000, and he wants you to pay for it.
President Biden’s rationale: Student loan relief will (a) mainly benefit poor Americans and (b) will be paid for by “deficit reduction.”
Does it mainly benefit poor Americans?
The White House marketed its student loan plan as “Relief for Borrowers Who Need It Most.” If that were true, it might be a worthwhile policy.
Unfortunately, it was false advertising. A study from the Penn Wharton Budget Model concluded only 38% of the relief targets the bottom 40% of income earners. The JP Morgan Chase Institute found the policy to be even more regressive, concluding that for every dollar of cancellation received by the top 40% of income-earners, only 68 cents goes to the bottom 40% of income-earners.
To put those numbers in perspective, Medicaid relief targets only those earning up to 138% of the federal poverty level. The Supplemental Nutrition Assistance Program (formerly the Food Stamp Program) operates similarly, benefitting those earning up to 130% of the federal poverty level.
In short, the government knows how to create social programs targeting the poor. If Biden wanted to help lower-income workers, he could have done it.
Instead, he helped the highly educated. Forbes reports the average person with a bachelor’s degree earns $70,000 annually and the average person with a professional degree earns $117,500. Those numbers stand in contrast to those without degrees, who earn only $47,500 annually.
The educated don’t need the help.
Can it be paid for by ‘deficit reduction’?
“This year, we’re on track to cut (the national deficit) by more than $1.7 trillion,” Biden said. “There is plenty of deficit reduction to pay for the (student loan) programs.”
Payment with “deficit reduction” is an oxymoron. It’s like saying, “My credit card debt is less in September than it was in August; time for a spending spree.”
The national deficit is the amount of money the government spends minus the amount of money it collects in taxes. That deficit is added to the national debt every year. In 2021, the government spent $2.7 trillion more than it collected, bringing our national debt to roughly $30 trillion. This year, the government will spend about $1 trillion more than it collects, bringing our national debt to roughly $31 trillion.
The deficit has indeed been reduced, but claiming we can use the reduction to pay for more programs is reckless and misleading.
In truth, Biden’s policy is entirely unpaid for. $400–$500 billion will be tacked onto our already skyrocketing national debt and will cost each taxpayer roughly $2,500. Not only does the relief help the educated, it does so with your tax dollars.
Student loan forgiveness is a political bribe
Biden released his plan two months before the November midterms. The relief targets educated young people, the precise demographic Democrats need voting in November. A Harvard poll found that 55% of likely voters from ages 18 to 29 prefer Democratic control of Congress, compared to only 34% from the same age group preferring Republican control. The more young people vote, the more likely Democrats will retain power.
How do you get young people’s attention? Show them the money.
We cannot let politicians buy our votes. Nor is it in our interest to do so. We may like the “free” $10,000 now. But free handouts are never really free. What the government gives us today will boomerang back to burden us in the coming decades. Our national debt will continue to balloon until elected officials stop bailing out the bourgeoisie and start balancing our budgets.
Many of the people who serve you at home and work — styling your hair, emptying your trash, maintaining your yard — are barely surviving. Consider this: each of them now faces the equivalent of a $2,500 bill to subsidize your education.
When the midterms come around, don’t take the student loan forgiveness bribe. Cast a vote for your country, not for your wallet.
Brad Barber is a recent graduate of Brigham Young University and Harvard Law School. He is an attorney practicing in Salt Lake City.