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Debate: Should Biden Cancel Millions of Americans’ Student Debt?

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Republicans in Congress have renewed attacks on President Joe Biden’s plan to forgive student loans for millions of Americans. Since the beginning of the COVID-19 pandemic, payments and collections on defaulted student loans have been “paused” under the CARES Act and various pandemic relief laws. Even before March 2020, various proposals had been proposed by Democrats to forgive student debt entirely for certain Americans. 

We asked two professors and authors of ALM’s Tax Facts with opposing political viewpoints to share their opinions about renewed GOP attacks on efforts to cancel student debt.

Below is a summary of the debate that ensued between the two professors.

Their Votes:

Byrnes

Bloink

Their Reasons:

Byrnes: Canceling student loans would be the equivalent of a massive wealth transfer to the educated and elite in this country. We’re talking about those Americans who have had the privilege of obtaining a college education — and who are currently enjoying the benefits of increased earning potential in a labor market where employees hold unprecedented bargaining power. The entire idea of simply forgiving student debt for Americans who have enjoyed the benefits of their college and graduate degrees is simply absurd. 

Bloink: Millions of Americans are burdened with an unprecedented amount of student debt — and we all know that a college degree is no guarantee that the recipient will ever have the earning potential to repay those loans and still build a retirement nest egg, own a home and provide for a family. It’s time for the administration to step up and keep the promises it made to the Americans who voted this regime into office.

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Byrnes: Forgiving student loans would also make inflation even worse, prioritizing the needs of the elite educated class over those of the ordinary hardworking American who is struggling with inflation just as much as Americans with student loan debt. This is just another way the Democrats are trying to buy votes at a time when they’re experiencing dismal polling numbers because they frankly haven’t delivered on their campaign promises. 

Bloink: Much of the student debt in this country is held by borrowers who earn less than the median household income in the U.S. — and the current student loan forgiveness proposals would provide relief only to Americans with an income below certain threshold levels. The prospect of giving people more money to spend each month won’t have a significant impact on inflation, and we shouldn’t use that as an excuse to avoid doing what’s fair.

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Byrnes: Countless Americans haven’t made a student loan payment in over two years. While they might now be expecting a government handout, they had ample opportunity to make decisions that would make it easier to repay those loans once they went back into payment status. Not every pandemic-related relief measure has been made permanent. If we’re looking for ways to help Americans deal with inflation, we should be examining measures that are applied fairly and across the board — not only as a handout to this small group of elite, educated Americans.

Bloink: The administration isn’t suggesting providing a bailout to wealthy Americans. On the contrary, these proposals would serve to benefit taxpayers with lower incomes who are burdened with student debt that they’ll likely never be able to repay in their lifetime. The education system in this country is failing, and while we have a long way to go and there’s much that can be done in the long run, this is one way that we can provide immediate solutions.

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