Last week, President Biden reportedly told a group of lawmakers who urged him to cancel at least $10,000 of student debt for every borrower through executive action, “you're going to like what I do on that.” Although there are some worthwhile forms of debt forgiveness, these reports are cause for concern. Broad debt cancellation would be an expensive, regressive giveaway to affluent households that worsens inflation and detracts from more meaningful efforts to address the college affordability crisis.

Student loan debt is disproportionately held by affluent households because the degree they borrowed money to pursue enhances their earning power. Considering the enormous costs of a college education today, it makes sense to offer relief to borrowers with low lifetime incomes – people who are stuck with the debt of degrees without being able to reap the financial benefits. That’s why I urged President Biden last year to expand and reform income-driven repayment programs that directly tie debt cancellation to a borrower’s ability to pay.

But broader student debt cancellation is a regressive transfer of wealth from lower- and middle-income workers to high-income professionals. President Biden has already cancelled more student loan debt than any president in history, largely because of his decision to repeatedly extend a moratorium on minimum payments and interest accrual. The greatest beneficiaries of this policy have been high-income professionals, such as doctors and lawyers, who have on average had at least $30,000 of debt effectively cancelled by the policy so far.

The administration is reportedly hoping to counter criticisms of regressivity by only cancelling debt for individuals who earned less than $150,000 last year. Although this would help limit giveaways to some of the wealthiest people, it’s still deeply flawed. Many people with high lifetime incomes still have individual years in which they earned less, such as a recent graduate who has not yet reached the point in their career where they will fully realize the value of their degree. Whether it's through higher taxes or inflation, workers who didn't go to college will bear the costs of cancelling up to $400 billion in outstanding student debt.

Broad Student Debt Cancellation Would Backfire
By Ben Ritz
for Forbes

If the Department of Education has its way, big changes could be in store for the nation’s charter schools.

Charter advocates say the proposed rules would make it harder to get new charters off the ground. What this means for school choice was front and center as The 74 and the Progressive Policy Institute presented an April 28 panel discussion: “Tell Them We Are Rising: Parental Choice in America.”

The panel featured insights from Atasha James, CEO of Legends Public Charter School; Ebony Lee, of Charter School Growth Fund; Dr. Howard Fuller, Professor Emeritus at Marquette University; and Earl Martin Phalen, CEO of Phalen Leadership Academies. Curtis Valentine, co-director of PPI’s Reinventing America’s Schools Project, moderated the conversation.