If you want to know how far the Democrats have gone from the Labor Party to the Party of Affluent Professionals, consider how much Progressives are pressuring President Biden to extend — for the sixth time — the loan repayment freeze. academics.
It’s class warfare – and people with 21st century versions of monocles and top hats are winning.
People who have college loans to repay are, on average, quite well off. It’s no surprise: only one in three Americans of working age has graduated from college, and college graduates make more money than people with only high school diplomas. . The same goes for people who go to college but don’t graduate. University loan forgiveness is primarily government assistance to people with above-average incomes.
If you know anything about higher education, you won’t be surprised to learn that the most indebted people are the ones with the highest incomes. These big loans don’t usually come from funding a liberal arts degree at an Ivy League university: elite schools have a lot of money themselves, which is why, for example, the big majority of Princeton graduates finish with no student debt at all, while the small proportion who take out loans typically end up with less with debt under $10,000.
Instead, large loans are usually used to finance higher education, especially vocational training: law school, medical school, MBAs and other preparations for high-paying careers. Americans sometimes forget where the money actually lands in our economy: Your local college principal doesn’t have Jeff Bezos’ money, but he makes nearly $20,000 a year more than the typical architect, earning a just under $100,000 on average in 2020, according to the Bureau of Labor Statistics. This guy can afford to pay his student loans. The same goes for his lawyer (average salary of $126,930) and the local nurse practitioner ($117,670), who makes about as much money as the typical aerospace engineer ($118,610).
Policy analysts, including progressives, who take the time to crunch the numbers consistently, come to the same conclusion: Every seriously considered college loan forgiveness program disproportionately benefits high-income earners. A study by Sylvain Catherine of the University of Pennsylvania and Constantine Yannelis of the University of Chicago finds that a universal debt cancellation program would benefit earners in the top 10% five times more than those in the bottom; capping the rebate at $50,000 — or even $10,000 — would produce similar results, offering far more benefits to the well-to-do than those in difficulty. As the researchers note, this is true in large part because big student loans come with big income.
Poorer Americans won’t benefit much from college loan forgiveness for the same reason they don’t benefit from income tax cuts – the same wealthy people who pay most income taxes also most of the university debt.
The COVID-era repayment freeze has already provided $200 billion in benefits to borrowers who have relatively high incomes. That’s $200 billion out of the pockets of American taxpayers, including low-income taxpayers. If we want to alleviate the debts of the poor, we could pay off the credit card balances of the lowest-paying 20% of American households for half that amount. For the $200 billion, we could buy a $350,000 house for every homeless person in the United States. Instead, we’re funneling that money to the country’s “poor and struggling” personal injury lawyers, suburban dentists, and lavishly paid McKinsey fools.
Because Democrats would rather use your money to buy votes. In the United States, the cities are Democratic and the countryside is Republican – the real political contest is in the suburbs, where these affluent, college-educated professionals live and vote.
Democrats are happy to help the rich get richer, as long as they vote the right way.
Kevin D. Williamson is the author of “Big White Ghetto: Dead Broke, Stone-Cold Stupid, and High on Rage in the Dank Woolly Wilds of the ‘Real America’.”