Biden’s student loan plan opens a fresh midterm front
President Joe Biden’s plan to slash some student loan debt could help millions of borrowers but a decision he spent months wrestling over could also have profound and unpredictable electoral consequences.
The cacophony that followed the administration’s Wednesday announcement reflects the high-stakes issue’s possible impact on the November midterm elections while also helping to explain the political, cultural and economic evolution of both major parties.
The immediate effect of Biden’s executive order, if it survives possible court challenges, will be alleviating some of the burden of debt for graduates who sometimes struggle to make payments or have to delay major life decisions like buying a home.
But no White House decision happens in a vacuum. This debate has been especially charged politically and Biden had been under extreme pressure from more liberal members of his party to take sweeping action ever since winning the election in 2020, during which he campaigned on some loan forgiveness. The proximity of the 2022 midterms, in which Democrats now hope the long-expected Republican red wave may not crest as high as feared, means the President’s strategy could turn out to be especially significant.
Biden supporters hailed his decision to cancel $10,000 in debt for those making less than $125,000 a year as another bold bid to improve the lives of middle class Americans, following efforts to fight child poverty and to lower the cost of prescription drugs for seniors.
Progressives welcomed the move but wanted more, underscoring the uneasy alliance between the White House and the left that has characterized this presidency.
Some economists, meanwhile, even those who have worked in Democratic administrations, argued that canceling student debt could further spike inflation and inflate the national debt. And some education experts pointed out that while it may ease the pain of some debtors, Biden’s effort does little to fix the fundamental problem — the high cost of college that prices many Americans out or leaves them laden with loans.
Across the aisle, Republicans who are looking to flip the House and Senate in the fall saw a political opening in making an argument about fairness — that poorer tax-payers who didn’t go to college and thus racked up no education debt essentially will end up subsidizing those who did and stand to earn more over their lifetimes.
The differing reactions on both sides of the aisle reflected a shift in the identity of the Republican and Democratic Parties. In the Donald Trump era, the GOP coalition has evolved from its country club roots and increasingly drawn from the White, blue-collar base in the industrial Midwest and the South, which once formed the bedrock of Democratic support. This is why cultural, class warfare rhetoric might work for Republicans on this issue, especially layered on top of Americans’ already strong economic woes.
In a simultaneous shift, Democrats have made gains among suburban and affluent professional voters who once might have preferred the GOP, but were turned off by Trump. One reason for Biden’s victory, however, is that he also appealed to many working-class Americans after building his half-century-old political ethos on blue-collar families like his own in Scranton, Pennsylvania.
How Biden’s move could play in the midterms
With the midterms already being fought over the high cost of living, Biden’s job approval ratings and the riotous legacy of Trump, the current President threw another controversial issue into the mix Wednesday.
“It’s about opportunity, it’s about giving people a fair shot, and it’s about the one word America can be defined by — possibilities,” Biden said at the White House.
His speech was a detailed rebuttal of many Republican arguments. He said 43 million people would benefit from the plan, 60% of whom were Pell Grant recipients. Some 45% of people could see all their student debt canceled and be able to get on top of rent and utilities, he said. Biden rejected claims the plan would hike inflation and expand the deficit and punctured Republican complaints by pointing out many of them had voted for Trump’s 2017 tax cut bill, which disproportionately favored the wealthy and corporations.
The President’s student loan gambit won a qualified endorsement from some key figures on the left of his party. Massachusetts Sen. Elizabeth Warren told CNN’s Bianna Golodryga that the development was “truly transformative for millions of Americans” and but warned more needed to be done to tackle the cost of college. Vermont Sen. Bernie Sanders, an independent, said the President’s decision was “an important step forward” but that it didn’t go far enough at a moment of gaping wealth inequality. Both Sanders and Warren made canceling much larger slices of student debt a cornerstone of their 2020 Democratic presidential primary campaigns and the pressure that Biden felt to act was a validation of their strategies.
His move could stoke turnout among young voters this fall who had soured on Democrats, who, in recent elections have appealed to young college-educated voters and young suburban families. A higher ceiling of $20,000 dollars in debt cancellation available to graduates from low-income families who used Pell Grants for college could energize minority voters in swing states.
But the President’s move was still a relatively small step, another example of how his compromises have delivered less for the Democratic monopoly on political power in Washington than progressives had hoped. That disappointment is most clearly illustrated in the way the vast Build Back Better Act, which would have fundamentally overhauled education and health and home care, shrunk to the smaller Inflation Reduction Act concentrating on cutting prescription drugs prices for Medicare patients and combating climate change. And the enthusiasm gap could remain an issue for Democrats if their liberal base is peeved that Biden did not answer their calls for a much higher or total debt cancellation.
The sensitivity of Biden’s move was, meanwhile, underscored by the tepid reaction that it drew from some Democrats in tight midterm races. Rep. Tim Ryan, the Democratic nominee for Senate in Ohio, complained that it “sends the wrong message to the millions of Ohioans without a degree working just as hard to make ends meet.” Ryan, who’s running in a rust belt state Trump has twice won, called instead for a tax cut for working and middle class families and more opportunities for student borrowers to refinance their loans.
Colorado Sen. Michael Bennet, who is facing a potentially competitive reelection this fall, said the debt relief should have been more targeted and that he wished the administration had “proposed a way to pay for this plan” — a nod to the economic concerns Republicans are already seizing on. While acknowledging that “immediate relief to families is important,” he called for systemic reforms to cut the “absurd” cost of a degree and an attempt to build economic security for Americans who do not get a two- or four-year college degree.
For Republicans, the decision could be a chance to activate a working-class base, including many voters who may not be college graduates and will not benefit from what the GOP is branding as a government bailout for the elite.
Mitch McConnell, the GOP leader in the Senate, laid out a rhetorical checklist for his candidates, warning the plan would worsen inflation, reward far-left activists and do nothing for millions of struggling families. He sought to enlist every taxpayer who will not benefit from loan cancellation as a critic.
“President Biden’s student loan socialism is a slap in the face to every family who sacrificed to save for college, every graduate who paid their debt, and every American who chose a certain career path or volunteered to serve in our Armed Forces in order to avoid taking on debt. This policy is astonishingly unfair.”
While arguing that the plan represented socialism — a doctrine that, among other aims, prioritizes the working class over the rich — the Kentucky Republican also argued that Biden had set out to reward the most wealthy.
“Democrats specifically wrote this policy to make sure that people earning six figures would benefit,” McConnell said.
Republican Sen. Ben Sasse accused the President of spinning the debt cancellation program with “Pell window dressing” to disguise the way that it “forces blue-collar workers to subsidize white-collar graduate students.”
The Nebraskan also identified one of the great omissions of the President’s approach in that it does not do much to fundamentally reform an education system that sees the cost of college soar year after year and makes it even harder for people from working-class backgrounds to access the social mobility pipeline that often comes with an advanced degree.
That kind of transformation is beyond a president wielding executive power and needs an act of Congress. But the hyper-politicized reaction on both sides to Biden’s announcement shows that higher education — like many other challenges — is yet another issue that is beyond the capacity of a divided nation to fix.