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Biden’s credentialed class bailout

When the economy was shut down in March 2020, it made sense to allow student loan borrowers to defer their payments. If you don’t have a job, you can’t pay off your student debt.

But now that President Joe Biden is bragging about record job growth and the unemployment rate is functionally the same as it was before COVID-19 (3.5% in February 2020, compared to 3.8% today), it is far past time for this student loan debt moratorium to end. People have jobs, and they can pay off their student debts.

Democrats don’t see it this way, however. Led by Sen. Patty Murray from Washington, Democrats are pushing Biden to suspend student loan payments all the way through this year’s midterm elections. How convenient.

Democrats claim that student loan forgiveness helps the working class buy houses and start families. And for a tiny minority of working-class earners, that is true. But the biggest winners of student debt forgiveness are actually the wealthiest income earners. According to data compiled by the Brookings Institution, the top 40% of income earners owe over two-thirds of all student debt, and the richest 20% owe 35%. These are all the wealthy doctors and lawyers who borrowed hundreds of thousands of dollars for multiple credentials, but now also are making hundreds of thousands of dollars a year.

These high-income earners do not need debt relief at the expense of taxpayers, the vast majority of whom did not graduate from college and earn far less. Even those who did go to college and are paying off their loans are paying far less each month than the highest earners. According to the Committee for a Responsible Budget, the lowest fifth of earners pays just 2% of all student loan payments each month, while the richest fifth pays almost 40%. Any further suspension of student debt payments is just a huge giveaway to the wealthiest taxpayers.

But aren’t the Democrats the party of the working class? Why are Democrats working so hard to give taxpayer money to the wealthiest people? Well, it turns out that the Democrats have long since stopped representing the working class and are now the party of the rich, credentialed elite.

In 2020, the Democratic Party overwhelmingly won the top 10 highest-income congressional districts in the country. Wealthy, credentialed members of the elite, such as doctors, lawyers, consultants, and other professionals, also give far more money to the Democratic Party than they do to Republicans. A good chunk of the money that Biden does give to this wealthy, credentialed class will find its way right back into the Senate and House campaigns of Democrats.

These top 10 wealthiest congressional districts that are all represented by Democrats also just happen to be the top 10 congressional districts for income inequality too. Democrats may say they are against policies that raise income inequality, but that is exactly what student loan payment suspensions do every month: They let the highest-income earners keep more of their paycheck instead of paying off the debts they agreed to pay.

Our higher education system is in desperate need of reform. Universities demand far too much tuition for education that rarely provides students the tools they need to be successful and start a family. The federal government needs to send far fewer taxpayer dollars to colleges that undermine our nation’s values and far more money to vocational and apprenticeship programs that give young people the skills they need to support themselves.

What we absolutely should not do is perpetuate a failing status quo that enriches the already wealthiest among us.