When President Biden released his three-point plan for cancelling $10,000-$20,000 in student loan debt for low- and middle-income borrowers on Aug. 24, some reactions I heard made sense and some absolutely did not.
That the plan focuses on economic relief amid the pandemic (that’s right, COVID-19 is still with us!) for the portion of borrowers most vulnerable to the economic stress and impact of student loan payments is quite reasonable. A disproportionate economic burden falls to low income, working poor and middle-class borrowers as well as to black borrowers.
The retort from many locally and in the media? “Why should I pay for someone else’s loans? I paid for mine!” in concert with that old American favorite, “Why should I pay because student-loan borrowers don’t pay their bills? I work hard!”
If you are someone who completed a bachelor’s degree in only four years, utilized loans to earn that degree and built the kind of career financially that enabled you to pay off your student loans, congratulations! Really! You are a rarity. Yet, instead of resenting the relief a sizeable number of people and households will experience, perhaps we could be happy any relief is happening at all.
Another standard in the mythology of America is that any and every difficulty in life is the result of a personal, moral failing. Don’t pay your student loans? You’re lazy/ corrupt/irresponsible/and more. We just can’t escape our Calvinistic roots.
The overwhelming number of student-loan borrowers in default is the result of people and households choosing from among many equally bad options amid a variety of intersecting factors. Most people don’t default on their student loans because they don’t WANT to pay them. Most people default on student loans because they CAN’T pay them.
The primary thing omitted from the debate about student-loan forgiveness, and central to this piece, was said so succinctly on Twitter by Howard University’s Knight Chair Nikole Hannah-Jones on Aug. 25:
“Student loan forgiveness is not about irresponsible people taking out education loans and then not paying. These are compounding interest loans: borrowers are struggling because they pay many times OVER what they borrowed and still owe!”
For me, all the talk of responsibility, hard work and expectations becomes pretense. In my encounters around central Minnesota, no one offering me the retorts above had a clue that student loans are bound to compounding interest.
I learned that kind of thing in college.