By Nancy Thorner –
The Biden administration is expected to announce today, Wednesday, August 24, 2020, a plan to cancel $10,000 of student loan debt for borrowers making $125,000 a year or less. Biden is also expected to extend the payment pause for federal student loans for several more months.
According to an opinion contributor of The Hill, BEN RITZ, the plan is a terrible idea. Ritz is director of the Progressive Policy Institute’s Center for Funding America’s Future.
Argues Ritz: It’s bad politics, and it will further estrange Democrats from working-class voters.
Ritz notes that “only 13 percent of Americans carry any student loan debt, and they have better income and job opportunities than the workers without a degree who will bear the costs.”
Further, the move will likely “backfire with the overwhelming majority of workers who lack college degrees and suburban voters concerned about inflation and government overspending.”
Following are six other reasons Ritz lists why Biden should not cancel student loan debt.
1. Mass debt cancellation would undermine the Inflation Reduction Act.
2. Canceling debt for most borrowers is a giveaway to affluent households — paid for by workers.
3. Student debt cancellation distracts from the real problem of college affordability.
4. Mass debt cancellation by executive order sets a dangerous precedent.
5. Student debt cancellation is bad politics.
6. There are better tools available to help struggling borrowers.
According to Mr. Ritz, President Biden has already wiped out more student debt than any other president in history, both through the moratorium on interest accrual (which has effectively canceled roughly $6,000 per borrower to date) and additional forgivenesshis administration has given to certain borrowers.
Biden can also continue providing carefully targeted relief and work to expand and reform income-driven repayment programs that directly tie debt cancellation to a borrower’s ability to pay.
However, the more debt that is rightfully canceled through these mechanisms, the clearer it becomes that there is little justification for canceling the remaining balance.
Read Ritz’s column here: Six reasons Biden should not cancel student debt
