The Political Problems With Student Loan Forgiveness

Editor’s Note: The following is an excerpt from The Problems with Student Loan Forgiveness, a new report from the Texas Public Policy Foundation that argues against universal and complete student loan forgiveness. This is the fifth in a series of six excerpts from the report.


Part 5: Political Problems With Student Loan Forgiveness

There are also a host of political problems with student loan forgiveness.

Forgiveness Is Not Popular

While student loan forgiveness may be popular on Twitter, Twitter does not provide a representative cross section of America. It is not even a representative cross section of younger generations. “Sixty-six percent of millennials,” one of the generations most supportive of student loan forgiveness, “have no student debt at all” (Akers, 2019a, para. 1). Indeed among the broader population, 54% oppose student loan forgiveness (Swaminathan & Smith, 2021). While other surveys (e.g., Williams, 2021) have found more support for forgiveness using different wording of the question, there is little reason to believe that student loan forgiveness is overwhelmingly popular.

One of the reasons student loan forgiveness is not more popular is that even though college attendance primarily benefits the individual student, student loan forgiveness would force everyone else to pay for it. As pointed out in the introduction to an article by Robin Smith, “Student loan forgiveness doesn’t forgive the loan. It just transfers the loan to those who never asked for the loan, agreed to the loan, or benefitted from the loan” (Smith, 2022).

If student loan forgiveness were popular, it should have been possible to make these college programs free to students years ago. Yet as Adam Looney explains,

there seems little political appetite or public support to make graduate programs or professional schools free, or to spend federal tax dollars providing grant support to lawyers, doctors, or MBAs. If we are unwilling to make their education free, why pay for those programs retroactively for yesterday’s graduates? (Looney, 2022, p. 15)

Much of the Population Would Resent Student Loan Forgiveness

Student loan forgiveness would also fuel resentment among many groups of people. As Marguerite Roza notes, “when the rules are changed midstream, those who sacrificed under the old rules see themselves as losing out” (Roza, 2021, para. 9).

The first group that would resent forgiveness consists of some of those who did not attend college—98.5 million Americans (Solon, 2019)—many of whom would presumably be unhappy about paying the cost for someone else to attend. As Antony Davies and James R. Harrigan ask, “is it reasonable to charge people—via the higher taxes loan forgiveness will bring—who did not go to college to subsidize those who do?” (Davies & Harrigan, 2021, para. 8).

A second group that may be resentful consists of many college attendees who either did not borrow or already repaid their debt. Michael Solon estimates there are 106 million people in this category (Solon, 2019). Popular television host Mike Rowe summarizes how many of them would view forgiveness

My reasons for opposing student loan forgiveness are not a secret. I’ve written at length on this page about the fundamental unfairness of doing such a thing – especially to the millions of Americans who have paid their college debts, and sacrificed much to do so. (Quoted in Conklin, 2020, para. 3)

A third group that would resent forgiveness consists of former college students who chose a lower-cost school, worked while enrolled to limit their borrowing, or chose a safer major to ensure they could repay their debt. As Rick Hess writes,

Those who chose to attend cheaper colleges will realize they left free money on the table, compared to those who disregarded such concerns and borrowed big. Those who waitressed during college, worked nights, started out at community college, or scrimped and saved in order to minimize their borrowing wind up feeling like suckers. (Hess, 2020, para. 11)

Recent college graduate Ethan Ames provides a compelling account of how many graduates would view forgiveness:

I’d already passed up the opportunity to attend the more expensive and more prestigious Denison University, a private liberal-arts college in my home state of Ohio. Denison, I thought at the time, was too expensive. But now the same seemed true of South Carolina. So I transferred to the University of Toledo, a public institution much closer to home, where I studied accounting. Accounting isn’t my passion, but like a Honda Civic it’s safe and reliable. After three years, two universities and thousands of hours spent studying debits and credits, I graduated and accepted a job…

If I could have borrowed without limit to pay for my education because the loans would later be forgiven, this wouldn’t have been my path. I wouldn’t have majored in accounting, transferred to Toledo, or even attended South Carolina. I would have attended a pricey private school on Uncle Sam’s dime and majored in political science—a subject I might have found more engaging if less remunerative…

The greatest flaw in plans to forgive student loans: Like all ex post facto policies, they would punish or reward people for decisions made based on laws and information available at the time, while casting an air of uncertainty over present decisions (Ames, 2019, para. 2–5).

A fourth group that would resent forgiveness consists of parents who sacrificed to pay for their children’s college education. The best illustration of this occurred during the 2020 presidential primaries, when Democratic contender Sen. Elizabeth Warren was

confronted by an angry man this week in regards to her proposal to eliminate student loan debt. The father of a current college student said he had worked double shifts, diligently saving for college, so he could pay for his daughter’s education without the need for student loans… “I just wanted to ask one question,” said the man at a presidential town hall campaign in Grimes, Iowa. “My daughter is getting out of school… She doesn’t have any student loans. Am I going to get my money back?” When Warren responded of course not, the man frustratingly questioned her plan further. “So, you’re going to pay for people who didn’t save any money and those of us who did the right thing get screwed?” (Kuchar, 2020, para. 1-4)

A fifth group of people that would resent forgiveness consists of other debt holders. After all, what’s so special about college debt? Some may argue that if we are trying to find sympathetic borrowers, why not focus on medical debt? Others may contend that, in terms of the number of people affected, forgiving home mortgage debt would benefit an even greater number of people.

Overall, as Michael Solon argues

debt forgiveness punishes those who did the right thing, made sacrifices, and acted wisely and frugally, as well as those who simply didn’t have the opportunity to go to college. Isn’t this the sort of private gain at public expense that people on the left claim to abhor? (Solon, 2019, para. 6)


Image: Element5 Digital, Public Domain

Andrew Gillen

Andrew Gillen is a Senior Policy Analyst at the Texas Public Policy Foundation.

2 thoughts on “The Political Problems With Student Loan Forgiveness

  1. A simple equation, for those yearning to help those burdened with debt owed to lenders via funds paid to educational institutions:

    25% of debt balance retained, and monthly payments thus reduced, by debtor, aka student.

    25% of debt balance forgiven, aka taken by lender as loss, by lender.

    25% of debt balance rebated by receiver of loan, aka education institution, to lender.

    25% of debt balance paid to lender via a GoFundMe account, established by all those who anguish over the unbearable burden being experienced by those unbearably burdened debtors being unbearably burdened by the debt they each found they must choose to impose upon their future to acquire the offered products produced by the receivers of said borrowed funds, aka education institutiions.

    Easy peasy, huh?

  2. I fit in every group except for the first, since I attended college.

    The loan proposed forgiveness programs are wrong and immoral. I never objected to repaying those hardy souls who worked in ghettos or on hot and dusty Indian reservations. They earned a break. Not all the others though. Not me, my children or my grandchildren. They borrowed and should pay it back. That’s moral. The original rule of exempting these borrowers from bankruptcy protection was wise too. Experience shows that some would graduate on Saturday and file for Chapter 7 protection on Monday; which is also wrong and cheating. And no. I’m not for debtor’s prison.

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