Democrats’ proposals to cancel student loan debt are unfair to minorities
If the Democratic Party had electoral bloc captains, Senator Elizabeth Warren would surely be in charge of the affluent, college-educated white voters who made up her narrow base in the 2020 presidential primary. explained by his campaign’s signature student loan forgiveness proposal, which would mean taxpayers would be responsible for 95% of outstanding student loans held by individuals.
It should come as no surprise that Ms. Warren and progressives like her have been the chief cheerleader for the executive orders that have already suspended federal loan repayments three times. Due to growing pressure from progressives, the Biden administration is considering a fourth freeze before the current recess expires in May.
As a presidential candidate, Ms Warren tried to paint a picture of racial disparity in her argument for student loan forgiveness. “Today in America – a new study has come out – 20 years later, of white people who have borrowed money, 94% of them have paid off their student loan debt; 5% of African Americans have paid,” she said. The problem is that she misinterpreted a September 2019 report from Brandeis University in Massachusetts. While Ms. Warren was talking about borrowers, the statistic she inappropriately quoted referred to amounts borrowed.
In reality, student loan data is more complicated than Ms. Warren admits. The left-leaning Brookings Institute found that those who would benefit from student debt forgiveness have “higher incomes, are better educated and are more likely to be white” compared to other recipients of social spending. The Committee for a Responsible Budget notes that nearly 75% of student loan repayments come from people in the top 40% of incomes. Only 4% of households making active payments on their student loans in 2019 were below the federal poverty line.
These numbers show that higher-income Americans tend to have more student debt than lower-income Americans. Removing student loans would disproportionately help the wealthy, who are predominantly white and college educated. The top fifth of households currently hold $3 in student loan debt for every dollar of debt held by the bottom fifth of households in the United States.
But for Ms. Warren’s wealthy white Liberal constituency, extending the pause on student loan repayments yet again this spring isn’t enough. Now she and other Democratic leaders are beating the drum for President Biden to use his executive power not just to delay repayment, but to “largely” write off up to $50,000 per student borrower.
The moratorium and Ms. Warren’s proposal to forgive $50,000 in loan debt is grossly unfair to students who have avoided student loan debt by getting scholarships, serving in the military, or furthering their education. It also undermines Americans who decided not to go to college because they didn’t want to sink into mountains of debt. And that’s without mentioning that this proposal adds billions a month to the already out of control US national debt.
But this freeze is not about what is right or what is good for the country. It’s all about politics and power. Ms. Warren and other progressives fear that unless Mr. Biden follows through on his promise to cancel student loans and thereby appease the white liberal elite within the Democratic Party, those voters could stay at home during the midterm elections. And that would mean the Democrats would lose control of the House and possibly the Senate.
Democratic officials not only believe an extension will help save the midterm elections, but they also see it as a politically fast track to completely canceling student debt. Both are regressive political approaches that benefit the rich and elite the most.
It’s possible that an extension of the moratorium will help push white Democrats to the polls in November, but it would do nothing to address the economic pressures faced by minorities and ordinary American families. If Ms. Warren was serious about helping beyond her restricted constituency, she would focus on actions that lower the cost of gas and groceries, creating jobs and, while she’s at it, helping herself. attack what really causes runaway schooling rates. But politics seems to be the priority.
• Ken Blackwell is the former Secretary of State and Treasurer of Ohio and served as Mayor of Cincinnati.