Debt relief: Righting a wrong or just politics?
This editorial is the consensus opinon of the Daily Herald Editorial Board
When President Joe Biden announced that $10,000 in college debt would be forgiven for borrowers earning less than $125,000 and households earning less than $250,000, a lot of suburbanites must have thought: finally, here's something in our wheelhouse.
To be clear, we do not object to our suburban young people getting out from under small debts that unfortunately can have a big impact on their lives.
We are concerned, though, that debt forgiveness doesn't address the root causes of how our nation got saddled with $1.75 trillion in student debt to begin with - a dysfunctional but entrenched college funding system; average college costs that have risen faster than inflation, coinciding with less government support for students; and not enough controls on for-profit colleges that are either outright predatory or are well-meaning but ineffective.
And without a corresponding attempt to improve those controls, debt forgiveness looks more like an attempt by national Democrats to influence the midterm elections than steady, reformative policy.
The run-up in defaults on student loans has been driven by comparatively small loans made to students at for-profit colleges, those at trade schools for training in careers like cosmetology and mechanics, and, to a lesser extent, community colleges.
These are suburban borrowers - not entirely, certainly, but a big chunk of them are - many of whom dropped out of school before getting a degree, or the education they received was inadequate to significantly improve their circumstances. So while they individually carry little debt, they also lack the wherewithal to pay it off, which compromises their futures.
Ivy League grads, in contrast, make up less than 1% of student borrowers nationwide. Only 14% of debt relief under Biden's plan will go to borrowers earning more than $141,096. According to an independent Wharton School study, the rest will go to the working class: one third to borrowers earning less than $50,795 a year, and slightly more than half going to those earning $50,795 to $141,096.
It's not surprising that Democrats are targeting suburbanites. They are the voters who put Biden over the top in 2020. In the Chicago area every collar county except McHenry voted for Biden by comfortable margins. In key states like Wisconsin, Michigan and Pennsylvania, it was the suburban areas going Democratic that turned those states blue and gave Biden the victory.
Ultimately, whether you support lowering the college debt of millions of borrowers or consider forgiveness to be a blatant giveaway by Democrats just prior to the midterms (or both), the timing of Biden's announcement has the unfortunate effect of steering attention away from the problem of college debt and focusing it firmly on politics.