Hello friends,
This week I had the distinct (dis)pleasure of testifying for a Senate subcommittee hearing on student debt chaired by Senator Elizabeth Warren. I kid. It’s a huge honor to have been invited and I’m grateful to have had such a tremendous platform to share my views. But I won’t pretend that the idea of going head-to-head with Senator Warren, probably one of the most adept policymakers in the realm of argumentation and persuasion, didn’t give me a few days of agita. I wasn’t really looking forward to quarreling with her (again) on a national stage, even though I fervently believe that forgiving student debt is a misguided policy and may be detrimental to the nation.
At the hearing, I delivered a testimony arguing that widespread student loan cancellation was regressive and would create worse problems in the future. I also advocated for reform of income driven repayment as a more apt solution to the problems at hand. In the end, however, it seems that the focus of the hearing was mostly on Jack Remondi and James Steeley, who represent the student loan servicers Navient and Pennsylvania Higher Education Assistance Agency, respectively. Senator Warren, as she does, called for both of them to be fired. Otherwise, the hearing played like an infomercial for loan cancellation, with Senator Warren, Representative Ayanna Pressley and the Attorney General of Massachusetts, Maura Healy, joining forces to grandstand about the evils of student loan debt.
Opposition to loan cancellation was also well represented in the testimony portion of the hearing, even if it wasn’t the focus for questioning. I had Alex Holt, Adam Looney and Constantine Yannelis in my corner arguing with me that mass loan cancellation would be misguided (to put it nicely.) Dominique Baker also offered thoughtful testimony. She’s in favor of loan cancellation but also makes the often neglected point that cancellation, without further significant reform, won’t solve the problem.
I’ve also continued beating this drum in my popular writing. My recent piece for USA Today argues that Biden shouldn't buy into the “student loan pity party.” This isn’t one of my more compassionately argued pieces, which has become apparent in my Twitter mentions, but the facts are indisputable. People with college degrees, even if they also have debt, are among the most privileged in our economy. They don’t generally need our pity or our tax dollars.
However, my recommendation for President Biden to stay out of student loan cancellation is not based on these facts alone. It’s also based on the recent development in Senate procedural rules that will allow Democrats to pass multiple reconciliation bills in the same year. In theory, that means they don't need President Biden to forgive student loans through executive action, and they don’t need any votes from Republicans to pass it through legislation. They can do it themselves with a simple majority (51 votes.) In practice, however, I’m not sure they have the votes to get there. Either way, it takes the pressure off Biden, who I don’t really believe is a fan of mass student loan cancellation anyway. Stay tuned on this one, my full explainer is coming soon.
I hope you’ve now had a chance to check out my new podcast, An Economist Goes to College, as the first episode went live last week. For your listening pleasure, I have a new episode coming on Tuesday. (We’ll be releasing episodes on a biweekly basis.) In this upcoming episode, I talk with Michelle Singletary of the Washington Post about the idea that we’ve all gotten too “romantic” about college. She and I disagree fervently throughout, but I think it makes for a fun listen. Her perspective on this issue is really fresh and I enjoyed talking with her. I hope you’ll check it out and let me know what you think.
That's all for today. Thanks for reading and please do let me know if you have comments, suggestions or recommendations for future podcast topics or guests.
Take care and be nice to each other!
Beth
Author of Making College Pay (May 2021)