Student loan forgiveness is the demand du jour from progressives, and last week U.S. Rep. Ayanna Pressley, Sen. Elizabeth Warren and state Attorney General Maura Healey turned up the heat in their bid to get President Biden to make these fiscal obligations disappear.
As they frame it, wiping out up to $50,000 in federal student loan debt per borrower is a pay back for voter support.
“We’re all here to call on President Biden to do right by the movement that elected him,” Pressley declared.
“So you can say the words of appreciation. Policy is my love language — cancel student debt.”
In Warren’s view, “our economy would do better if all of the people who have student loan debt were able to get out and start their own small businesses, able to buy homes.”
The cost would be enormous — even considering the recent stimulus package spending sprees. Based on data from the Department of Education, forgiving student debt up to $50,000 per borrower would cost about $1 trillion. Limiting loan forgiveness to $10,000 would cost about $373 billion.
For a little perspective, the Brookings Institution reports that forgiving up to $50,000 of student debt is similar in cost to the cumulative amount spent on Supplemental Security Income (SSI) and all housing assistance programs since 2000.
White House chief of staff Ronald Klain told Politico that Biden “hasn’t made a decision either way” on the $10,000 or $50,000 forgiveness figure.
There is a student loan problem that needs fixing, but it’s not the one grabbing headlines.
Under the Public Service Loan Forgiveness program, those who work for government organizations (U.S. federal, state, local or tribal), as well as tax-exempt not-for-profit organizations get the remaining balance on their student loans forgiven after they make 120 qualifying monthly payments.
Serving as a full-time AmeriCorps or Peace Corps volunteer also qualifies for the loan forgiveness program.
It’s giving a break to those who took out loans and went on to work for the public after college — a sort of sweat equity if you will.
But the program’s been plagued by problems, according to Politico. More than 98% of applicants seeking loan forgiveness have been rejected by the program.
Last week, unions representing teachers, firefighters, health care workers and government employees called on Education Secretary Miguel Cardona to fully erase the debt of borrowers who have worked for more than a decade in public service jobs.
“The COVID-19 pandemic underscores the need for immediate action,” the unions wrote to Cardona in a letter, which was shared with Politico. “Public service workers who should have already benefited from the Department of Education’s Public Service Loan Forgiveness program are serving on the front lines of our pandemic response — caring for patients, teaching our students, and delivering essential services in communities across the country.”
Taking steps to fix this problem so that such essential workers who’ve been keeping the country functioning during the pandemic can get the debt forgiveness the Public Service Loan Forgiveness program was designed to provide is a more immediate and viable concern.
The Public Service Loan Forgiveness program isn’t a free-stuff-for-everyone plan, but helps those who work to help others — regardless of who they voted for.