If the Democratic Party had voting bloc captains, Sen. Elizabeth Warren would surely be in charge of the affluent, college-educated white voters who constituted her narrow base in the 2020 presidential primary. Much of the attraction can be explained by her campaign’s hallmark student loan forgiveness proposal, which would mean taxpayers would be on the hook for 95% of the outstanding student loans held by individuals.
It should be no surprise that Ms. Warren and progressives like her have been the head cheerleader for executive orders that have paused federal loan repayments three times already. Due to mounting pressure from progressives, the Biden administration is considering a fourth freeze before the current pause expires in May.
As a presidential candidate, Ms. Warren attempted to paint a picture of racial disparity in her argument for student loan forgiveness. “Today in America — a new study came out — 20 years out, whites who borrowed money, 94% of them have paid off their student loan debt; 5% of African Americans have paid it off,” she said. The problem is she mischaracterized a September 2019 report from Massachusetts’ Brandeis University. While Ms. Warren was referring to borrowers, the statistic she inappropriately cited referred to the amounts borrowed.
In reality, the data about student loans is more complicated than Ms. Warren admits. The left-leaning Brookings Institute found that those that would benefit from canceling student debt are “higher income, better educated, and more likely to be white” compared to other social spending beneficiaries. The Committee for a Responsible Budget notes that close to 75% of student loan repayments come from individuals in the top 40% of income. Just 4% of households making active payments on their student loans in 2019 were below the federal poverty line.
These numbers show that high-income Americans tend to have more student debt than lower-income Americans. Wiping out student loans would disproportionately help the wealthy, who happen to be predominantly college-educated and white. The top fifth of households currently hold $3 in student loan debt for every $1 of debt held by the bottom fifth of households in the United States.
But for Ms. Warren’s wealthy white liberal constituency, extending the pause on student loans repayments yet again this spring is not enough. Now she and others in Democratic leadership are beating the drum for President Biden to use his executive authority not just to delay repayment, but to “broadly” cancel up to $50,000 per student loan borrower.
The moratorium and Ms. Warren’s proposal to cancel $50,000 in loan debt are grossly unfair to students who avoided student loan debt by either earning scholarships, serving in the military or working their way through school. It also undermines the Americans who decided not to attend college because they did not want to be mired in mountains of debt. And that is without mentioning that this proposal adds billions a month to America’s already out-of-control national debt.
But this freeze isn’t about what’s fair or what’s good for the country. It’s all about politics and power. Ms. Warren and other progressives are concerned that unless Mr. Biden fulfills his promise to forgive student loans and thereby appease the elite white liberal wing within the Democratic Party, those voters may stay home during the midterm elections. And that would mean Democrats would lose control of the House and possibly the Senate.
Democratic officials are not only convinced that an extension will help salvage the midterm elections, but they also view it as a politically expedient route toward canceling student loan debt altogether. Both are regressive policy approaches that benefit the wealthy and elites the most.
It’s possible that an extension of the moratorium would help drive white Democrats to the polls in November, but it would do nothing to solve the economic pressures faced by minorities and everyday American families. If Ms. Warren were serious about helping beyond her narrow constituency, she would be focused on actions that lower the cost of gasoline and groceries, job creation and while she’s at it, address what’s actually causing runaway tuition rates. But politics seems to be the priority.
• Ken Blackwell is the former secretary of state and treasurer of Ohio and served as mayor of Cincinnati.
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