Biden Is Right to Reject Calls to Forgive $50,000 in Student Debt
February 19, 2021
Responding to a personal plea for the forgiveness of student loans totaling up to $50,000, President Joe Biden explained recently that he “will not make that happen.” The rebuke was a bit startling given the growing support among Democrats for proposals to cancel such loans, but it is not inconsistent with Biden’s campaign platform, which limited loan forgiveness to just $10,000. President Biden is right to draw this line and reject calls for the relief of large loans. Analysis from bipartisan sources has repeatedly shown that high-dollar student loan jubilees (mass loan forgiveness) disproportionately benefit very high-income borrowers, who are often doing just fine despite holding a high federal student loan balance. And broad loan forgiveness, while politically popular, would only exacerbate underlying problems with tuition inflation and overborrowing.
Student loan cancellation is an issue that has gained tremendous traction over the past couple of years. Initially regarded as “pie-in-the-sky,” at least by conservative analysts, the notion became mainstream during the presidential Democratic primaries leading up to the 2016 election. Included in many campaign platforms, proposals ranged from a universal loan jubilee, proposed by Sen. Bernie Sanders (I-VT), who was representing the left flank of the party, to Biden’s more conservative plan to put a $10,000 cap on loan forgiveness. Since Biden took office, he’s been facing pressure from Senate Majority Leader Chuck Schumer (D-NY) and Sen. Elizabeth Warren (D-MA) to enact a $50,000 student loan forgiveness plan.
