Biden student loan action ignites instant political battle

The Washington Post / Matt Viser / Mark Guarino

13:15 JST, August 26, 2022

The complex politics of student debt relief burst into full view Thursday following President Joe Biden’s decision to forgive billions of dollars in student loans, adding a twist of uncertainty to an electoral landscape that has been shifting in the Democrats’ direction.

Fissures opened instantly within the Democratic Party, as moderates said Biden was doing too much and liberals demanded he do more, while Republicans lined up in adamant opposition to the debt forgiveness plan. White House officials asserted that Biden would benefit from delivering on a campaign promise that helps middle-class Americans but were scrambling to navigate the politics heading into the November midterm elections.

As current and former students nationwide began to digest what the plan might mean for them – some welcoming the relief, others criticizing it as unfair – politicians across the spectrum wrestled with the likely impact of a decision that had been vigorously debated within the White House.

The debate could be seen inside a small radius in Wisconsin. When David Bowen, a Wisconsin state lawmaker, saw that Biden was using his authority to ease student debt, he said he knew that it would be “a game changer” for many in his Milwaukee-based district who have struggled to make ends meet.

“With the cost of education being as high as it is right now, we have so many folks who have racked up debt, have strained their budgets to try to keep up with the costs of living, their plans for the families and futures,” said Bowen, a Democrat. “Overwhelmingly, this is a win perceived by working people and for working people.”

But less than 35 miles away, a different state lawmaker was coming to a different conclusion. When Barbara Dittrich, a Republican from Oconomowoc, Wis., saw the news, she thought of her own family. Her two daughters had already paid off their student loans, while their brother will now be eligible to have $10,000 written off, courtesy of the American taxpayer.

“Sure,” she wrote on Twitter, adding an eye-rolling emoji. “Sounds fair.”

Biden’s plan, which covers individuals making less than $125,000 a year, would forgive up to $10,000 in federal student loans, or $20,000 for Pell Grant recipients.

It touches on volatile issues of education and class, with conservatives saying it will force blue-collar taxpayers to subsidize elite college students, and Black and liberal leaders saying it will provide critical relief to people who are struggling. And it quickly spurred debates on fairness, including among those who had forgone an expensive college to avoid burdensome debt, only to now see the government help those who attended costly schools.

White House officials said they were eager to have a debate that put them on the side of students struggling to pay off loans, particularly the disproportionate number of Black Americans who form a major portion of Biden’s base.

“It’s not going to please everybody. He understands the policy is not,” said White House press secretary Karine Jean-Pierre. “But he wants to make sure we’re giving families a little breathing room.”

Just hours before Biden traveled to Rockville, Md., for one of his first big events focused on the midterm elections, a number of Democrats in competitive races around the country broke with him firmly, bluntly and publicly.

Sen. Catherine Cortez Masto, D-Nev., said she disagreed with Biden’s move, adding, “It doesn’t address the root problems that make college unaffordable.” Rep. Chris Pappas, D-N.H. – like Cortez Masto, facing a tough reelection race – criticized Biden for sidestepping Congress and for adopting a plan that he said is not paid for and would add to the deficit.

“This decision by the president is out of touch with what the majority of the American people want from the White House, which is leadership to address the most immediate challenges the country is facing,” said Rep. Jared Golden, D-Maine.

Rep. Tim Ryan, the Democratic nominee for U.S. Senate in Ohio, said Biden’s approach could alienate those struggling to make rent payments, much less attempting to go to college.

“While there’s no doubt that a college education should be about opening opportunities,” Ryan said, “waiving debt for those already on a trajectory to financial security sends the wrong message to the millions of Ohioans without a degree working just as hard to make ends meet.”

During the White House briefing on Thursday, Jean-Pierre was pressed a number of times on the cost of the program. She said it was done in a “fiscally responsible way” but that she had no cost estimate for the plan because it’s not clear how many will apply for relief. There is no revenue-raising element to it to offset the costs, although Jean-Pierre pointed to other unrelated Biden policies that have helped reduce the deficit.

The plan has also come under withering criticism from some economists, including some allies of the Biden White House, who said it would exacerbate inflation.

Jason Furman, chairman of the Council of Economic Advisers during the Obama administration, wrote on Twitter that “pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.” White House officials responded that restarting student loan repayments, which have been on pause for more than two years, will offset any inflationary effect of forgiving other loan payments.

Many liberal and Black leaders said the move was a good first step, even if it fell short of what needed to be done. They pointed to the relief given to businesses struggling during the pandemic under the Paycheck Protection Program, saying debt relief for college graduates is just as worthy.

“If we could afford to cancel hundreds of billions in PPP loans to business owners in their time of need, please do not tell me we can’t afford to cancel all student debt for 45 million Americans,” Sen. Bernie Sanders, I-Vt., wrote on Twitter.

The politicians’ debate reflected the way ordinary people are wrestling with the issue. When Tom Slusher graduated from Beloit College in Wisconsin in 2012, he faced $75,000 in federal and private loan payments and spent the next decade working to pay it down, taking jobs he wasn’t necessarily passionate about, for example in advertising and digital communications.

The 33-year-old’s loan debt is now down to roughly $15,000. But that progress came with a price, he said: “Taking on higher-paying jobs and positions with higher responsibilities and being afraid to leave jobs,” as opposed to “doing something more meaningful and with a more purpose-driven aspect to the work,” like working at a food bank.

Slusher said he does not resent those who will benefit from Biden’s plan. But he does blame the president, and other national politicians, for policies that have allowed college costs to skyrocket.

Savannah Charles, a 23-year-old graduate of Marquette University in Milwaukee, has a different perspective. She faces a $400-per-month payment until 2036 and recalled sobbing on her bedroom floor during her freshman year, struggling under financial hardship as she strove to become the first in her family to graduate from college.

Charles said Biden’s plan is a lifesaver. “I can now see a future where I can put a down payment on a house, start a family and hopefully save for my future children’s education,” she said. “That was really hard to see before. I didn’t want to take my brain there because it felt so far from reality.”

Bowen, the Wisconsin state lawmaker, argued that those who went to college decades ago struggle to understand the economic challenges facing young people now.

“It’s virtually impossible today that you could have a part-time job to help pay for room and board and your tuition,” said Bowen, who is 35. “We have a generation before us that can’t fathom what it’s like to have tens of thousands of dollars in debt from student loans and still be strained to save to buy a house.”

He added, “They don’t know what it’s like. We have a difference in experience. They look at us and say, ‘You guys are soft. We had to go through it and had to take out loans to do it – why can’t you?'”

In the past 30 years, average published tuition and fees more than doubled after adjusting for inflation, going from $4,160 to $10,740 at public colleges and $19,360 to $38,070 at private ones, according to pricing data collected by the College Board.

Polling suggests a majority of Americans generally favor forgiving student loans, although that support goes down the higher the amount of loan forgiveness.

In January, an Economist/YouGov poll found that 49% of Americans supported canceling student loan debt from public colleges while 35% were opposed. Slightly more than half of Americans supported forgiving $10,000 per person, according to an NPR/Ipsos poll in June, but an overwhelming majority – 82% – said the top priority should be making college more affordable in the first place.

Republicans said Biden’s plan will essentially force hard-working blue-collar Americans to foot the bill for students getting degrees from elite institutions.

“At the end of the day his debt forgiveness scheme forces blue-collar workers to subsidize white-collar graduate students,” said Sen. Ben Sasse, R-Neb. “Instead of demanding accountability from an underperforming higher education sector that pushes so many young Americans into massive debt, the administration’s unilateral plan baptizes a broken system.”

Some in the GOP tied the issue even more directly to a cultural divide that often pits liberal, highly educated voters against conservatives from rural areas.

“You’re going to be having farmers, people that have their own small businesses, waitresses, they’re going to be on the hook to pay the student loan of somebody who got a PhD in gender studies?” Florida Gov. Ron DeSantis, R, told radio host Hugh Hewitt on Thursday. “I mean, give me a break.”

Biden seemed highly sensitive to Republican claims that his plan was elitist when he announced it Wednesday, saying it would not benefit any high-income Americans.

“I will never apologize for helping working-class Americans and the middle class, especially not to the same folks who voted for a $2 trillion tax cut that mainly benefited the wealthiest Americans and the biggest corporations,” the president said.

Felipe Diaz-Arango is among those who might have good reason to begrudge people benefiting from Biden’s plan, though he said he doesn’t: In April he wrote the final check for the $120,000 in loans it took to graduate from the University of Chicago in 2009. Diaz-Arango, 35, said he worked hard to pay back the loans in part to protect his mother, who had co-signed for them.

“The loans were my priority, because I didn’t want to mess up her life,” Diaz-Arango said. While $10,000 in debt relief “would have been nice,” he added, what he regrets more is what he considers the outrageous price of tuition and the predatory financial landscape that supports it.

He sees today’s younger people being open to more affordable options, such as studying abroad or attending a community college.

“That kind of conversation wasn’t happening when I was applying for schools,” Diaz-Arango said. “I thought, ‘If they’re giving me $120,000 in student loans, it must mean it’s fairly easy to pay off.'”