'Cancel Student Debt' poster

Student loan borrowers gather near The White House to tell President Biden to cancel student debt on May 12, 2020 in Washington, DC.

(Photo: Paul Morigi/Getty Images for We, The 45 Million)

Biden's Means Tested, Try-to-Please-Everyone Student Debt Relief Plan Will Please No One

What should be a slam-dunk opportunity to energize voters young and old may instead become a bureaucratic mess that offers too little relief for too much complexity.

The Washington Post reported on Friday morning that the Biden administration is finally considering a concrete policy of student debt cancellation, but not the one for which activists have been fighting for years. The Post reports that the White House is considering canceling just $10,000 per person in student debt, under a means-tested regime which would limit forgiveness to Americans who earned less than $150,000 in the previous year, or less than $300,000 for married couples filing jointly.

Imagine if millions of people suffering under unpayable debt burdens woke up one day, checked the news, and found out that the thing that had been weighing on them since they were 18 years old had suddenly vanished, all thanks to the President.

The Post outlines several obstacles to implementing means-testing, including that "the Education and Treasury departments cannot readily share borrowers' tax information, and legislation easing the restriction won't take effect for two years." Additionally, means-testing student debt relief could exclude low-income borrowers who don't file taxes; could require complex identity verification processes; and could take months to implement no matter what, again according to the Post. While an estimated 97% of debt holders' income falls under the proposed thresholds, these serious bureaucratic challenges will likely exclude millions of the most vulnerable from attaining debt relief in practice.

If this plan is implemented, then by trying to please everyone, Biden will likely please no one. What should be a slam-dunk opportunity to energize voters young and old, and especially voters of color, may instead become a bureaucratic mess that offers too little relief for too much complexity--which is exactly what student debt profiteers want from a loan forgiveness policy, if we are to have one at all.

The political cross-pressures Biden faces on this issue are real, but they can be solved with strong, clear messaging and additional policy actions that are firmly within the executive's power. Any student debt forgiveness policy will inevitably be distorted in attack ads from bad-faith corporate centrists and the right-wing propaganda machine into a false claim that this policy only helps educated elites. This is despite the fact that a college education has had little correlation with social mobility since at least the Great Recession. Indeed, much of the union organizing wave we're seeing at low-wage jobs right now, which Biden rightly celebrates, is being driven by college-educated baristas and warehouse workers. But no matter what, the opponents of this policy--themselves educated, wealthy elites--will try to depict Biden as only aiding the privileged and leaving the non-college educated behind.

The solution to that problem is to help student debtors and people who didn't attend college by improving people's lives all around with a broad slate of policies, not by making this policy inadequate. Biden has other executive authorities he can use to offer aid to constituencies including voters who never attended college. Biden can decriminalize cannabis, correct the federal poverty lines to bring millions into social safety net programs, march in on prescription drugs, and close longstanding loopholes in the tax code for corporations and ultrarich individuals.

Using his executive authorities on any or all of these issues would show that the President cares about the suffering of ordinary people being plundered by the elite.

Using his executive authorities on any or all of these issues would show that the President cares about the suffering of ordinary people being plundered by the elite. That's what the political impact of student debt cancellation would be, too: imagine if millions of people suffering under unpayable debt burdens woke up one day, checked the news, and found out that the thing that had been weighing on them since they were 18 years old had suddenly vanished, all thanks to the President.

That moment of hope will not materialize if it's clouded by frustrating paperwork and time-consuming red tape, and artificially limited to only remove a small percentage of the burden. This will come down hardest on the most vulnerable: for 83% of Black borrowers, canceling only $10,000 of debt would still leave them with a balance higher than their original amount.

Biden, by nature, believes in compromise. It's how he's survived as a politician for decades, and what he wants to revive in our political currents. Moreover, he is considering an executive policy rather than the legislative policy he prefers, which is likely already hard for a Senate institutionalist like Biden. But this proposed "compromise" is not something which everyone can live with--it is something which no one can tolerate. If Biden's plan for energizing the indispensable youth vote is to make it too difficult to get insufficient aid, he will do himself--not to mention his constituents, his party, and his country--no favors.

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