Could the US student debt crisis unite Republicans and Democrats?
Very few Republicans in Congress are enjoying their jobs right now. Defending President Trump from the impeachment inquiry has become an exercise in escalating absurdity. Party loyalty forces Republicans to betray some of their most deeply held beliefs by making hypocritical excuses for the soaring deficit and Trump’s abandonment of US strategic interests in the Middle East. And many Republicans seem to prefer stupid political stunts (like the invasion of a secure room in the Capitol where impeachment hearings were being held) to the hard work of policymaking.
That’s why it made headlines when A Wayne Johnson, a former senior official in Trump’s education department, recently announced a plan to forgive hundreds of billions of dollars of federal student loan debt. Johnson is a longshot candidate seeking appointment to a soon-to-be-vacant US Senate seat, and his plan is unlikely to be enacted anytime soon. But it is rare indeed to see a Republican official seeming to side with left-leaning Democratic presidential candidates such as Bernie Sanders and Elizabeth Warren (who have both proposed major debt-forgiveness plans) against his former boss, the education secretary, Betsy DeVos (who has called such proposals “crazy”). What does it all mean?
Student loan debt is a metastasizing national problem and political issue (as this Guardian Q&A helpfully explains). Some 45 million Americans have student loans, and student debt has doubled over the past decade. The overall national student debt is $1.6tn, which is expected to balloon further to $2tn by 2022. Nearly a fifth of borrowers who are not presently enrolled in school are at least 90 days delinquent in their payments. Student loan debt exceeds both credit card debts and auto loans, and appears to be damaging the economy by causing young people to put off marriage, childbirth, home ownership and small business formation.
Johnson, who oversaw the Office of Federal Student Aid in the Trump administration, points to repayment trends that suggest much of the student loan debt will never be repaid. The debt burden, he says, “rides on [debtors’] credit files – it rides on their backs – for decades. The time has come for us to end and stop the insanity.
“If this was a medical problem,” he adds, “it would be a pandemic, and the whole country would be figuring out how to inoculate against it.” The system, he concludes, is “fundamentally broken”.
Johnson proposes to cancel up to $50,000 in loan debt for each student and to provide up to $50,000 in tax credits for those who have already paid off their student loans. He calculates that his plan would cost $925bn – more than Warren’s plan, though less than Sanders’ – and would be paid for with a 1% tax on revenue generated by all employers.
“I do respect Elizabeth Warren and Bernie Sanders for bringing the nature of the discussion forward,” Johnson says. But he does not support the Democratic candidates’ plans to end tuition and fees at public colleges and universities, which he claims would amount to a “government takeover of post-high school education”. However, since under Johnson’s plan students would continue to borrow, there presumably would need to be another round of debt forgiveness in the future. Johnson also proposes to end the federal government’s provision of student loans, instead offering a $50,000 grant that students could use to enroll in colleges or vocational schools, with the remainder of loan-financing to be shifted to private lenders.
Republicans have become increasingly suspicious of higher education; at the beginning of this decade, 58% believed that colleges and universities had a positive impact on the course of the country, only 33% say the same now. Nonetheless, most Republicans also acknowledge that a college degree has become important (or even essential) for helping young people succeed in today’s economy. Johnson feels that members of his party would support a tax increase to pay for his plan since Republicans “understand the concept of investment, and particularly an investment in human capital”. A college education, he adds, “is valuable to our citizens and it’s valuable to employers – but right now, only the students pay. Employers say they need a bettertrained workforce. My plan sets forth an easy way to achieve that important goal.”
Johnson’s plan for student loan cancellation, like those of Warren and Sanders, is vulnerable to criticism that it’s a regressive policy, since it would disproportionately benefit students who take out loans to obtain graduate credentials (such as a law or medical degree) and eventually will become rich enough not to need debt relief. His $50,000 grant proposal also would be insufficient to pay for many advanced degree problems, and wouldn’t do much to address the rising cost and uncertain quality of many programs.
Nonetheless, the significance of Johnson’s student loan forgiveness proposal lies not in its details but in its very existence as a Republican response to the problem of rising indebtedness. Johnson’s proposal may help move the concept of debt-forgiveness into the political mainstream and encourage bipartisan efforts to address it.
If that were to happen, it would be a small sign of a return to normalcy in government, of the sort that prevailed before the present era of ideologically driven partisanship and Trumpian tribalism. Even today, there are many Republican members of Congress who ran for office out of a sincere conviction that both parties care about many of the same issues but offer different ways of solving common problems. That doesn’t describe the present political reality, but it’s a critically important aspiration. The country desperately needs to return to a system in which our two parties offer serious policies, debate the alternatives rationally, and engage in compromise to find common ground. The growing urgency of the student debt crisis may offer a way back.
Geoffrey Kabaservice is the director of political studies at the Niskanen Center in Washington, DC as well as the author of Rule and Ruin: The Downfall of Moderation and the Destruction of the Republican Party