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**APRIL 21, 2022**
Kuttner on TAP
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**** The Political Case for Student Debt Cancellation
Tens of millions of young Americans of moderate income are crushed by
debt. Joe Biden could be their hero.
The economic case for canceling $50,000 of student debt is powerful. Two
generations of young adults from non-affluent families are hobbled by
debt before their economic lives even begin. But there is an even
stronger political case.
Young adults are inconstant voters. They typically turn out at far lower
levels than older citizens. But when they do turn out in large numbers,
as in 2018, they vote disproportionately for Democrats.
Joe Biden has been administering debt relief in dribs and drabs. He has
ordered temporary debt repayment suspensions, the latest of which
expires in August. This week, he ordered reforms
in
the Public Service Loan Forgiveness program, which will wipe out debt
for some 40,000 people, and bring as many as three million more closer
to ending their debt payments.
None of this generates dramatic headlines. Biden's policy on debt
reminds me of his arms shipment policy on Ukraine. It's helpful, but
behind the curve at every step of the way. But unlike on Ukraine, where
Biden has Putin and the risk of World War III to reckon with, student
debt cancellation is totally within Biden's own control.
He should stop these half-baked incremental measures and cancel $50,000
of student debt now. That would make him a vivid hero to two
generations.
More than 43 million
people now
carry student debt, with an average balance of over $37,000. These are
mostly people of modest means. Rich kids don't take out loans because
their parents pay. The more the Republicans kick and scream about debt
cancellation, the more they alienate these young voters who logically
belong with Democrats-if Democrats will just deliver help.
Two follow-up measures are also necessary. Biden needs to send Congress
legislation reducing tuition costs at public universities. Otherwise,
the debt burden begins all over again.
One sensible approach would be to take the loan to which students are
entitled based on their FAFSA application, which reflects household
income, and turn that loan entitlement into a grant. Companion
legislation could require state universities to hold tuition hikes to
the rate of inflation, and require state legislatures to bear more of
the cost, as a condition of participating in the loan-to-grant program.
Biden is a genuinely empathic person. He's at his best when he shows
his compassion. It's hard to think of a more compassionate and
easy-to-grasp policy-or one that displays better politics.
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~ ROBERT KUTTNER
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