David Leonhardt of the New York Times paid off his own student debt (Yale ’94), even though he didn’t like doing it. Younger generations of his fellow upper-middle-class degree-holders, he argued yesterday, should do the same.
If there had been a movement for mass loan forgiveness back in his day, as there is now, Leonhardt wrote, it would have been “silly,” and it would have “conflated the real struggles of poor and working-class young adults with the mild discomforts of the professional class.” About half of the country’s $1.4 trillion in student-loan debt is held by people in the top income quartile, who have the degrees and professional standing to eventually pay it back, so writing it off would be regressive:
It is the sort of proposal—alluring but counterproductive—that Democrats should avoid as they build an agenda.
The fatal flaw of universal student-debt cancellation is that it’s not, in fact, progressive. It mostly benefits the upper middle class.
One thing Leonhardt was right about is that the professional class habitually conflates its own problems with the problems of poorer Americans. Unfortunately, his entire argument was built on just that conflation. When he looks at the benefits of universal debt forgiveness, he sees only a dollar figure, like the dollar figure he himself had to pay back: the individual debt loads of upper-middle-class people are higher, therefore, they are the people who would gain the most from a program.
But the smaller debts owed by poorer people are much bigger burdens, relative to how much money they have. Leonhardt knew this, but he couldn’t grasp what it meant:
To be clear, student debt is a real problem. But it’s a complicated problem. Most people struggling to pay off their debts are not graduates of four-year colleges. They are instead non-graduates—people who attended college (often a for-profit college) but never received a degree. They have the worst of both worlds: debt and no degree.
So: half the debt is owed by people with incomes in the top 25 percent, and half is owed by people in the bottom 75 percent. But that would mean that for every Yale graduate who would get $30,000 in debt forgiven, three people who owe $10,000 to for-profit colleges could also get free—out from under a burden that would otherwise be able to ruin their credit and opportunities indefinitely.
Leonhardt never explained why this result, liberating three people from crushing debt and one from a financial drag, would be “counterproductive.” He just waved at the idea that “this country has too many big problems” for it to be possible accept the inefficiency of helping out the well-off and the poor at the same time, and he argued that the only responsible way to enact debt relief would be by means-testing it.
Means-testing is the time-honored strategy for making sure a social-welfare policy fails, by narrowing its constituency and by making it burdensome to actually get.
This is the performance of virtuousness as the enemy of virtue. Means-testing is the time-honored strategy for making sure a social-welfare policy fails, by narrowing its constituency and by making it burdensome to actually get. (For an idea of what happens under strict qualification standards, consider the Public Service Loan Forgiveness program, which was supposed to lift student debt from people if they worked 10 years in the public sector, and which has been rejecting 99 percent of applicants.) Universal debt relief is a clear and straightforward goal; debt relief only for the deserving is a starting point for recriminations.
Even within what he thinks is his own socioeconomic band, Leonhardt’s Ivy-professional point of view is too narrow to see the politics. Not every four-year graduate went to Yale, and not everyone in the top 25 percent of income experiences a five-figure debt as a character-building annoyance to be worked through. It’s a payment that gets made in place of a house payment or a retirement-savings deposit; it’s a reason not to quit a bad job; it’s a monthly reminder that society is shaped by scarcity and competition, and those bottom three quartiles are a lot closer than the top one percent is.
The appeal of student debt relief is that it’s a program of solidarity. The means-testing already happened, in reverse, at the front end, when the rich people got into the top schools and could pay their way out of pocket, while the professional and middle classes took out mortgages and loans, and the poor people got steered into borrowing for scams and diploma mills. The whole system is predatory. The country may have bigger problems, but a lot of those look a lot like the student-loan racket. Fixing them has to start somewhere.