There’s been a lot of chatter lately about President-Elect Biden offering some degree of student loan debt relief. There are those who say this will be an economic boon and a great benefit to those who are struggling to enter the job market with groaning loan debts, but the plan is being met with plenty of skepticism as well. Newell invited Mary Clare Amselem from the Heritage Foundation onto the show Thursday morning to discuss.
“There’s this big move afoot with Biden, Warren, Schumer and other asking for all this student loan debt relief,” Newell began. “What does this ultimately mean for Americans?”
“It’s a pretty shocking proposal, we’re talking about upwards of a trillion dollars to forgive this debt,” Amselem said. “It’s an inequitable way to deal with this problem. Two-thirds of Americans don’t have a bachelor's degree, that still puts you in a pretty elite status in this country. Large-scale student loan forgiveness is simply asking hard-working Americans, the vast majority of whom did not go to college and made that financial decision for themselves, to pay for the student loan debts of those who did. We’re talking about student loan debt redistribution, and it's an unfair way to deal with this problem.”
“Most people believe this just kind of goes away,” Newell said. “They don’t connect these dots that you’re talking about. Folks in the lower socio-economic groups and the taxes that they pay will be consumed for this forgiveness, right?”
“Exactly,” Amselem said. “Our Federal student loan program is a massive one, run through the Department of Education. 90% of all student loans come from the Federal government, and this money cannot be waved away with a magic wand. It would have to be absorbed by American taxpayers. We should be talking about how we got here and how to prevent this from happening again in the future, and the answer is to dismantle the Federal student loan program.”
“So what is the real motivation behind this?” Newell asked. “As I was reading your article, it struck me that the vast majority of those in a position to repay these loans would be the ultimate beneficiaries.”
“When we’re talking about people who have massive student loan debts, they are typically graduate students,” Amselem continued. “People who have professional degrees, or took out hundreds of thousands of dollars to get a law degree or go to medical school - those people are typically the highest earners in our society. Not to belabor the point, but it’s important - two-thirds of Americans don’t have a bachelors degree, because they decided not to go college, and for most people, that was a better financial decision for them. To ask them to pay those student loan debts disproportionately held by higher-income earners - this is a regressive policy.”
Hear the entire interview in the audio player below.
