The Fairness Frame
A particularly aggravating line of attack on student loan forgiveness
(Update at bottom)
As you know, this is Frame week here at Jonathan’s Newsletter. So, I’m going to cap it off by talking about a particularly pervasive frame for attacking the Biden administration’s announced plan on student loan debt relief (and about some other criticisms of the Biden plan).
The program includes the discharge of debts of up to $10,000 for all borrowers who make less than $125,000, and up to $20,000 for those who were Pell Grant recipients. It also improves substantially existing income-based repayment provisions.
These new rules will provide meaningful relief to a lot of people - they will completely cancel student loan debt for about half of all borrowers. I also understand that for many others, it’s not nearly enough. Advocates for broader relief, for example, have pointed out how college debt exacerbates America’s deep and persistent racial wealth gap. And all of this treats the symptoms of a systemic problem - the too-high costs of higher education in the United States.
With that said, I want to call out a couple of particularly persistent complaints about the program. First and foremost has been a relentless focus on the issue of fairness - specifically how unfair it is to ask people who’ve paid off their loans, or didn’t go to college at all, to shoulder the burden of loan forgiveness. Look, if you’re a regular person on the street, as they say, who fits this category, you’re entitled to your feelings, of course. But insofar as the fairness frame is being pushed by people with large platforms and who insist that this is the central feature of and problem with the program - I am frankly gobsmacked by that. My frustration this week is not primarily with the predictable bad faith arguments of Republicans. Instead, I’m talking about critics who broadly live in the “reality-based community.”1
For a flavor of that argument, here’s the Atlantic’s David French on Twitter (and my response to him):
To elaborate, we spend tens of billions of dollars a year on mortgage interest deduction, which *overwhelmingly* benefits better-off Americans. It’s expensive, it’s bad policy, and it’s indefensible in distributional terms. But the larger point, and the reason French’s line of argument is so aggravating, is that every non-trivial government program has distributional effects. When Congress passes a half a trillion dollar farm bill every five years, the benefits accrue disproportionately to already well-heeled agribusinesses that our tax dollars support. The federal government provides billions of dollars in flood insurance, storm mitigation and disaster relief, expenditures that flow largely to people in susceptible coastal areas. The rest of us pay for that. Then there’s the hundreds of billions of dollars the government doled out via the PPP program, which everybody and their mother has been bringing up this week and whose upward distributional skew has been egregious.
In fact, every one of us who pays taxes is contributing to schools, health care, highways, the military-industrial complex and more, regardless of how much we individually get out of all that spending. In a newsletter he sent out this week elaborating on his opposition to debt relief, French could scarcely bring himself to acknowledge this basic fact of life about modern society. It’d be one thing if it were a persistent complaint of French’s, or other critics of the Biden administration’s plan, about how we deploy our tax dollars in general. But the relentlessness of the distributional fairness frame in this particular issue - well, I find it to be bewildering.
French’s Atlantic counterpart (the Atlantic appears to be an anti-forgiveness hotbed), Tom Nichols, also bashed the policy this week. Nichols, a never-Trumper and Biden supporter, took as a given that debt relief just handed Republicans a winning issue this fall. Why? Because Nichols believes it reinforces Democrats’ image as the party of entitled college grads. Nichols is right about how Republicans will try to spin student loan forgiveness. But he’s wrong about public opinion on the issue - every poll I can find shows majority support for at least some debt relief (and ten thousand dollars is the *minimum* amount that any poll asks about). And Nichols’ own biases lead him to make misleading arguments about who the actual beneficiaries are. For example, Nichols points to the fact that only about a third of adult Americans are college grads. However, many people who have outstanding student loans - by some estimates a majority - have not graduated more than six years after having left college. That figure is also higher for Black and Hispanic borrowers than it is for whites. None of this is consistent with the picture Nichols tries to paint - that the typical “winner” is the caricature of entitled young liberal college students that Nichols himself clearly believes.
Let me pause here to note that there are some legitimate concerns about the distributional effects of student loan forgiveness. While the majority of the relief will accrue to the bottom 60% of the income distribution, a substantial chunk of beneficiaries are themselves doing well or come from well off families. Biden’s proposals are an imperfect response to larger inequities in our country and sure, it would be great if, as Larry Summers says, we could better fund Head Start or science research, which he believes to be more worthy priorities than student loan relief. But unless Summers knows of a secretly available new reconciliation process that Congressional Democrats are themselves unaware of, that’s a moot point. Both Nichols and French (as well as Summers) fail in their criticisms to acknowledge any such nuance, or larger understanding of the complexities of the tradeoffs involved here.
Instead, they appear to be projecting some of their own grievances onto a mythic everyman who finds abhorrent the idea - one that all such critics appear to have just woken up to this week - that a government program would produce losers as well as winners. And they’ve done so from a bubble of privilege in spite of their pretensions to being bubble-averse. Here’s the economist Trevor Logan on the problem among many of his colleagues, applicable also to the non-economists French and Nichols:
In their pretensions to be speaking for regular folks, French, Nichols and others like them are ignoring a whole lot of such folks.
Another set of complaints focuses on the presumably inflationary effects of loan forgiveness, issuing from critics like the former Obama economic adviser Jason Furman. Furman described Biden’s plan as a $500 billion inflationary “bomb” being dropped on the economy (the program is estimated to cost somewhere between $300 and $600 billion over ten years).
But numerous eminent economists have debunked the inflation story. They include Professor Susan Dynarski, who argues that because loan repayments have been paused since 2020, the bulk of the inflationary effects have already happened. In fact, loan repayments for some 23 million borrowers will definitely resume on January 1. That will cause a drag on the economy, mitigating substantially the presumably overstimulating effects of the discharge of debts. I had a brief email exchange last night with another eminent economist, Dean Baker, who agreed with Dynarski that the soon-to-end moratorium will certainly off-set the effects of debt relief.
Of course, a chorus of Republicans was going to start screaming in bad faith that elitist Democrats have once again betrayed hardworking, deserving Americans2. But as I said, I’m less aggravated by them this week than I am by those outside the GOP talking-points machine, like French, Nichols, Furman and Summers. Each appears, in one way or another, to be channeling what they believe are the resentments of ordinary Americans at having to enable the entitled. French, for example, takes as a given that it’s the normal and natural response for people to be resentful in the way that he describes. That may be so in his orbit, but that doesn't make it true for everybody. In fact, lots and lots of people who have paid off their loans are *delighted* that others will get some relief. And to repeat, public opinion polling runs contrary to French’s premise.
Obviously, I support the thrust of debt forgiveness. But there are, to repeat, legitimate debates to have about what our spending priorities should be and where student loan forgiveness fits in that list of priorities. Each of the people I’ve mentioned here has a large platform and an opportunity to contribute constructively to those debates. Each, so say I, has instead chosen to perpetuate bad arguments that reinforce insidious frames which, in other contexts, I presume they would recognize as such.
Update: I appear to have undersold the progressivity of debt forgiveness. I said the “majority” of relief would accrue to the bottom three quintiles of American earners (the 60% I referenced above). According to the Penn/Wharton budget model, it’s a supermajority, if you will, with those bottom three quintiles accounting for fully three quarters of the forgiven loan dollars. Courtesy of Kevin Drum.
As a reminder, this was Karl Rove’s sneering term for liberals which, as a further reminder, was itself a fundamental premise of the original Colbert Report.
Quite delightfully, when GOP members of Congress have whined on Twitter this week about how unfair it is that people are having loans forgiven, the White House Twitter account has been tweeting back at them the amount of the PPP loan they’ve had forgiven. Here’s an example:
