I think there are three groups that should be addressed at once by any policy looking to provide relief to student debt holders.
- Current student debt holders
- Future college attendees
- Non-college attendees
These three groups are more relevant than income brackets for understanding the moral basis for debt relief. Student debt relief is not about strict income redistribution, but instead about:
- Rationalizing the debt load that college attendees have taken on in the last twenty years with the costs to past generations. Recent college attendees pay significantly higher costs and have had two (or maybe 3 if you squeak in the tech bubble) major recessions that they have faced. The Warren plan of forgiving the first $50,000 of student loan debt works nicely here as a way to make the debt load of recent students better resemble the debt loads of previous generations of college graduates.
- We have to also tackle the costs of college going forward, because they are still too high, and debt relief does nothing to avoid recreating this problem. Here, we can imagine a number of policies that the federal government could pursue to curtail rising costs. I would love to see some combination of restricting federal financial aid and student loans to certain top-level caps and remove institutions from being eligible for federal support that raise costs too much year over year with an increase in Pell Grants. We need both more grants for low income college attendees and a reduction in the federal governments role in ensuring the higher education market can easily increase their sticker price.
- Federally guaranteed sick and paid family leave is long overdue, and will materially change the condition for non-college graduates most of all. College graduates are far more likely to have jobs that provide some form of paid sick and family leave as a private benefit, but these benefits should be universal. And although student debt relief is not about strict income redistribution, there’s no strong moral reason why we should provide large assistance to past college attendees without providing something to the many Americans struggling who don’t and haven’t attended college. Pursuing a parallel policy that will most impact non-college graduates helps to demonstrate that these policies are meant to provide relief to all Americans. An alternative policy that would also pair well here is a raise in the federal minimum wage and no longer excluding restaurant waitstaff from the minimum wage.
That’s how I’d pursue tackling debt relief as solid stimulus during COVID, while bending the cost curve on higher education and not leaving behind many Americans who don’t end up in higher education.