President Biden has recently announced he will make a decision about student loan debt forgiveness by the end of this month. Student loan repayments have been paused six times since the beginning of the Covid-19 pandemic, and officials suspect Biden’s decision will be timed when the current moratorium on student loans expires. While left-leaning progressives have demanded up to $50,000 per borrower in debt cancellation, the president has consistently held that he is only willing to consider up to $10,000 per borrower. 

Leftists such as Sens. Bernie Sanders, Elizabeth Warren, and House Representatives Ayonna Pressley, Alexandria Ocasio-Cortez, and Ilhan Omar are oft-credited for introducing student loan debt forgiveness as a part of the Democratic party platform. Proponents say debt relief is a necessary component of racial equity; canceling $50,000 of student loan debt per borrower would erase loans for the majority of Black borrowers. Yet even Biden has expressed concern that erasing such a vast sum would benefit the elites more than the marginalized. 

In the past year, the average working American has become $1,800 poorer thanks to inflation. While universities have failed to deliver value equal to the cost of tuition (shown by the number of students who struggle to find employment even after graduation), Americans holding bachelor’s degrees are still in the higher-income bracket. Enacting student loan debt forgiveness by executive order would award money to the highest-earning Americans, costing taxpayers and the economy at large. In 2020, Biden won by 60% of college-educated voters. Considering higher-earning, college-educated whites pushed Biden over the edge to defeat Trump, the only reason to provide debt forgiveness at this time is political savviness – otherwise called a bribe. 

1. Forgiving student loan debt is only a band-aid to a much bigger problem: universities being incentivized to keep tuition high. 

One can be against federal loan debt forgiveness and still have compassion for those defaulting on their loans. In times of crisis, such as a pandemic, tuition freezes and moratoriums offer student debt relief where needed. But during the pandemic, the institutions extending relief were a cause or a correlation to the problem to begin with: the government shut down the economy and hurt family income; the government extended student loan moratoriums. The universities wanted to incentivize student applications and ease the burden on current students; the universities enacted tuition freezes. 

One reason for ever-increasing college tuition is the number of federal loans available to students. If colleges – and students – know loans are readily available, there is little incentive to lower the cost of tuition. In other words, federal government assistance can run up costs. Forgiveness may even continue the problem because future borrowers will be encouraged to borrow more with the expectation of debt forgiveness.

President Biden has hinted at forgiving student loan debt but has hedged on whether he will do it with or without Congressional approval. Legal advocates have argued that a clause in the Higher Education Act (HEA) grants Biden the executive authority to enact forgiveness by allowing a president to “compromise, waive, or release any right, title, claim, lien, or demand” that has to do with student loans. A memo from Legal Services Center at Harvard Law School says, “the power to create debt is generally understood to include the power to cancel it. This power rests in the first instance with Congress.” If the HEA does grant Biden the constitutional authority to forgive student loans, it will be because Congress has handed the Secretary of Education unrestricted power to impose and “cancel” debt. What these advocates fail to understand is that the government cannot cancel debt; government just relocates it. 

If astronomical tuition costs are due to bad federal policies and higher education institutions, the burden to pay them back should not fall on the taxpayer. 

2. Student loan debt forgiveness disproportionately benefits higher-income earners. 

According to Brookings Institution research, the top-income 40% of households owe nearly 60% of student loan debt. While students who come from higher-income families are more likely to attend college in the first place, the Brookings Institution notes that “A growing share of borrowers participate in income-driven repayment (IDR) plans, which do not require any payments from those whose incomes are too low.” Out-of-pocket student loan payments mostly come from higher-wage earners. Federal relief on student loan debt would be a handout to earners who do not necessarily need it in the first place, regardless of income limits. 

It’s also important to remember forgiving student loan debt doesn’t always mean paying back completed degrees. Education debt has skyrocketed while less than two-thirds of graduates complete a four-year degree in six years. Low graduation rates indicate taxpayers could be paying back loans on degrees that are not even finished or put to use. 

Federal student loan debt relief would disproportionately benefit higher-income earners and universities themselves. The one-third of Americans that hold a college degree would put their burden on the two-thirds that did not obtain a degree. As one Heritage Foundation analysis puts it, “Forgiving a debt could be a morally virtuous act, but forgiveness—by definition—can only come from the one to whom the debt is owed. In the case of federal student loans, that’s the taxpayer.” 

There is no such thing as government “canceling” student loans. The debt is moved to the taxpayer. The Committee for a Responsible Budget projects this so-called cancellation would “cause prices to increase faster than they already are, exacerbating inflationary pressures.” 

3. Educational lines, not just income lines, divide the parties today. 

A New York Times analysis shows the student loan debate is indicative of a larger shift in American politics. If class and income lines split the two mainstream parties for most of the twentieth century, today the split is between cultural and educational lines. In 1952, for example, just 5% of voters were college graduates whereas today 41% are. Of the college-educated voting bloc, Democrats have secured a large majority. 

Liberal academia has controlled the university for decades. Only recently has the growing class of liberal college graduates begun to alienate working-class Americans from the Democratic base. According to Pew Research, Bill Clinton secured 60% of white voters without a college degree throughout his presidency. In 2020, Joe Biden secured just 27% of the same voting bloc. The political realignment across levels of education helps explain former President Trump’s gains among Hispanic and Black Americans. 2020 exit polls show Democrats have been steadily losing support among Black male voters since 2008. Trump’s and other Republican gains among these demographics suggest conservative policies appeal to working-class minorities – largely those without a degree. 

It is no surprise, then, that both parties are guilty of pandering to the right base. Republican rhetoric seems to have swung the pendulum to “college isn’t worth any money at all” while Democrats are hinting at $10,000 bailouts for one of their largest voting blocs. 

Possible solutions to the student loan debt crisis should target the root causes. Phasing out federal subsidies would incentivize higher education institutions to lower tuition costs, while encouraging apprenticeship programs through the Department of Labor would balance the career field. These solutions aren’t as politically savvy or able to bribe voters. They are long-term solutions for true working-class Americans and young college students who make life-altering decisions when they sign onto thousands of dollars in debt at 18. The conservative approach is not pandering to political motives, but thinking over the long term. As Ronald Reagan once said, “Government does not solve problems. It subsidizes them.”