The decision by President Joe Biden to forgive some college loan debt has led to many folks proclaiming that they managed to pay their way through school. Why does anyone else deserve a government handout?
When I attended graduate school, my total tuition and fees came to less than $6,000, which I raised by waitressing in the summers and working two jobs during my final year of college. Today, the cost of that same graduate program is $81,460, which I only could have afforded if my summer job were embezzlement.
Critics of Biden’s plan regard higher education as a private benefit rather than a public good. But the payoff from a college degree transcends the individual earning it. Educated residents strengthen state economies and bolster local communities. The forgiveness program encompasses Americans who used federally backed loans to attend community colleges, vo-tech programs or professional schools.
A 2019 report by the U.S. House Committee on Education and Labor found that for every dollar states invest in higher education, they receive up to $4.50 back in increased tax revenue and lower reliance on government assistance. An American Community Life Survey shows college graduates are more socially connected, civically engaged, and active in their communities than people without a degree.
The rancor toward providing debt relief to borrowers with student loans seems overblown when you consider the taxpayer bailouts in 2008 and 2009 of banks, automakers, insurance companies and other industries. More recently, the federal government handed out $800 billion in a Paycheck Protection Program to counter wages lost to pandemic shutdowns and slowdowns. A 10-member study team from the Massachusetts Institute of Technology found a lot of that money went to business owners, their shareholders and creditors rather than workers.
The White House places the cumulative student loan debt at $1.6 trillion. An analysis of the three-part Biden loan plan by the University of Pennsylvania’s Penn Wharton Budget Model pegs the cost at $519 billion with 75% of the benefit falling to households making $88,000 or less per year.
The impacted Americans include many older people: More than 3.5 million are over age 60. Georgia is among the states with high numbers of borrowers. Federal Reserve 2021 data shows more than 1.6 million Georgians hold student loans. Those Georgia borrowers carry the third-highest average loan balance in the country, $41,600, after Washington, D.C., and Maryland, according to the Education Data Initiative.
The U.S. Department of Education will provide up to $20,000 in debt cancellation to Pell Grant recipients, who, as students, came from low-income households. Two-thirds of Pell recipients come from families that earn less than $30,000 per year. Non-Pell borrowers can get up to $10,000 in debt cancellation. Borrowers are eligible only if their individual income is less than $125,000.
The reaction to the college loan cancellations has featured lots of hypocrisy, especially by Georgia politicians who took taxpayer money during the COVID-19 pandemic. Among them are U.S. Rep. Marjorie Taylor Greene, whose family construction business, Taylor Commercial, had $183,504 in Paycheck Protection Program loans forgiven. Yet, she blasted debt relief for education loans.
So, too, did U.S. Rep. Andrew Clyde, who called Biden’s student loan bailout “highway robbery.” In an email to constituents, Clyde said: “Why should a poultry farmer in Gainesville pay for a Gender Studies degree from Berkeley? In what world is it acceptable to require an elementary school teacher in Ellijay to pay off the student loan debt of an unemployed graduate in Portland?”
Clyde was the recipient of forgiveness of PPP loans worth $154,950 that his gun store, Clyde Armory, received. U.S. Senate candidate Herschel Walker criticized the student loan forgiveness plan even while taxpayers underwrote $182,800 in PPP loan forgiveness for his poultry business.
There is a lot of debate among economists on the viability of the Biden plan. However, there is no debate on the need for more educated workers.
“Georgia, along with the rest of the South and the nation, need more students to enter — and graduate — across postsecondary education,” said Stephen Pruitt, president of the nonpartisan Southern Regional Education Board in Atlanta. “More specific to the workforce, we need more students from families with limited income to succeed in various types of college. The present and future workplace is demanding that more people have advanced career training and two- and four-year degrees. We need more folks in Georgia ready for the current high-demand and the high-skill career fields of the future.”
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