Commentary: Loan forgiveness raises testy questions (Sept. 21, 2022)

The controversy over President Biden’s student loan forgiveness plan is a touchy one.

As with about every other topic these days, it’s rapidly become a partisan issue.

Last week 22 Republican governors signed a letter to Biden demanding that he withdraw the program, saying that they “fundamentally oppose (Biden’s) plan to force American taxpayers to pay off the student loan debt of an elite few.”

Of course, the White House had a comeback: Spokesperson Abdullah Hasan responded in an email to USA Today: “These same Republican governors didn’t seem to object when their Republican colleagues in Congress passed a $2 trillion tax giveaway for the rich or had hundreds of thousands of dollars of their own small business loans forgiven.”

Fact is, just like those COVID handouts, which we really haven’t gotten the bill for yet, this debt forgiveness plan is going to cost American people, many of whom have never even attended college, And that’s a real issue.

It also raises this question, which is an important one for the very individuals who may benefit from this and other handouts: At what do government transfusions like this become too much?

Perhaps not surprisingly, estimates of what this is going to cost all of us range all over the map, as high as $1 trillion (per University of Pennsylvania’s Wharton School of Business) and most hovering around half that.

Estimates are that taxpayers will get bills ranging from $12,000 (for the wealthy) all the way down to $190 for low-income taxpayers (making below $50,000).

Even if we factor in a little bias and a little hyperbole that might accompany these analyses, the cost to individual Americans is going to be significant enough to notice.

Likely, most of us know people who are struggling to pay off student debt, and who clearly would benefit from this reprieve. Not all of them were irresponsible, taking out loans intended to help finance education that would lead to a competitive salary that, maybe, didn’t happen. Sometimes life takes nasty turns.

We also get that those with student debt feel slighted when the government hands out PPP forgiveness. However, a significant difference between student loans and PPP loans is that, for better or for worse, the latter were issued in response to government-forced business shutdowns, to keep the economy afloat.

Fact is, that CARES loan forgiveness program wasn’t something businesses signed up for; it was passed by Congress and any qualifying business owner would have been a fool to not take it, because they’re going to be paying for it whether or not they may not agree in principle with those government handouts.

But this is a direct taking. American taxpayers will be asked to fill that $1 trillion-or-whatever-it-turns-out-to-be gap. And here’s another concern: What’s this going to do to the cost of college for those already there or planning for higher education, if higher education realizes there’s this government money available?

Elections are coming. Certainly, the timing of this thing is questionable, particularly to those on the right-wing side of the aisle, but it raises an issue that voters across the U.S. and particularly in Oregon need to think about: How eager are we to pay for “care” and “support” from a notoriously inefficient government that can change the rules, seemingly arbitrarily?