It’s a holiday tradition in this house to watch “A Christmas Story,” a film that unfailingly takes us back to the year we had our own Ralphie.
An apple-cheeked kindergartener with a bowl haircut, our kid yearned for a Swiss Army knife, not a Red Ryder BB gun. Like the Parkers, we wanted to make our son happy. But we didn’t want to cause harm — perhaps killing our 5-year-old (or his sisters) with kindness. So, unlike the Parkers, we held the line.
Now it’s time for Americans to hold the line against a push for $1.6 trillion in student debt cancellation. It’s a jaw-dropping gift to the one in three Americans over the age of 25 who hold almost all student debt. But it’s a gift we can’t afford when millions are unemployed and tens of thousands of businesses have imploded.
We’re already spending trillions to save industries decimated by COVID-19. Perhaps it feels a little Scrooge-like to deny debt relief to college students, many of whom are paying full-service prices for DIY higher education.
Citizens, like good parents, must do what makes sense even when it doesn’t feel good. We begin by examining the facts about debt cancellation proposals.
Be clear about who benefits. Republicans and Democrats generally agree that public policy should be “progressive” — not that it’s approved by Sen. Bernie Sanders, but that governmental assistance should primarily benefit the needy. Supporters of full education debt cancellation, as proposed by Rep. Ilhan Omar, want us to believe that the have-nots will be winners.
But a new University of Chicago study by economists Sylvain Catherine and Constantine Yannelis concludes that the opposite is true —t hat only $29 billion in benefits would go to earners in the bottom quintile while $192 billion would go to the top 20%. While Omar’s full student debt cancellation is the most “highly regressive policy,” Catherine and Yannelis find other proposals to be similarly regressive. They further assert that “outstanding student debt is inversely correlated with economic hardship.”
That is, the wealthy hold more student debt than the poor. Ergo, forgiving education debt helps those at the top of the heap at the expense of those who are already disadvantaged. The left-leaning Urban Institute concurs, finding this top Democrat priority to be taxpayers’ gift to the wealthy.
Know that help already exists. John Sexton, former p[resident of New York University and Dean of its School of Law, notes that debt forgiveness already exists for those most in need. Income-Driven Repayment (plans “offer substantial loan forgiveness to low-income borrowers.” Sexton echoes the Urban Institute’s assertion that Democrats’ proposals to expand education debt forgiveness will benefit primarily “people in the top of the income scale.”
Consider the future. Sexton predicts that education loan forgiveness will encourage students “to spend more on college in the expectation of not having to pay that money back … driving the cost of college even higher.” That’ll mean an ever-increasing burden for many taxpayers who repaid their education loans or who built their lives without them.