Plain English with Derek Thompson - The Messy Debate Over Student Loan Forgiveness

Episode Date: August 30, 2022

The level of student debt in this country represents a massive policy error. But is forgiving up to $20,000 of student debt really the best way to help low-income Americans, or fix the nation's education-financing problems? The Atlantic's Jerusalem Demsas joins Derek to discuss the student loan forgiveness debate and weigh the positives and negatives of Biden's controversial new policy. If you have questions, observations, or ideas for future episodes, email us at [e-mail]. You can find us on TikTok at www.tiktok.com/@plainenglish_ Host: Derek Thompson Guest: Jerusalem Demsas Producer: Devon Manze Learn more about your ad choices. Visit podcastchoices.com/adchoices

I'm Matt Bellany, founding partner of Puck News, and I'm covering the inside conversation about money and power in Hollywood. With my new show, The Town, I'm going to take you inside Hollywood with exclusive insight on what people in show business are actually talking about. Multiple times a week, I'll talk to some of the smartest people I know, journalists, insiders, all of whom can break down the hottest topics in entertainment to tell you what's really going on. Listen now. Today's episode is about student debt forgiveness. the big, bold, beloved, despised, possibly midterm clenching and possibly illegal new policy from the Biden administration, which will forgive up to $20,000 of student loans for all but the richest student debtors.

So one thing that I try to do in most of these episodes is to try to find ways to express complicated ideas in a simple way. And I want to begin today's episode with a bit of a confession, not quite an apology, but a confession, which is that I don't think I know how to do that with this issue. I am incredibly torn about the substance and the wisdom of this policy of student loan forgiveness. And I'm trying to hold several thoughts in my head at the same time. Thought number one is that the level of student debt in America represents a massive and possibly inherently a moral policy mistake, and that there's a strong moral case to be made

that we should reduce outstanding student debt to help people who went to college, who did the right thing, move on with their lives. Thought number two is that lots of Americans are suffering from lots of problems, and maybe it's kind of nakedly transactional for Democrats to craft a debt relief plan for student loan holders

who represent just one seventh of the country that is mostly middle class or on their way to becoming middle class. This is not a policy that does the most for those with the least. Thought number three, though, is that, well, politics is transactional. Biden promised to do something like this. Democrats elected him, and now he's doing what he promised.

Thought number four is that, yes, he is upholding a promise, but he's not fixing a system. Student debt is a chronic problem, a chronic problem, and devising a one-off solution to an acknowledged chronic problem is kind of weird. Like when someone is a back problem, you devise a course of treatment. You don't write a one-week prescription for painkillers and say, good luck to you. Thought number five. is that maybe it's okay to have a one-off prescription in this case because student debt was, in fact, statistically,

an unusually big problem for members of my generation, millennials, and younger members of Generation X who graduated into an economy in the late 2000s, early 2010s that was really, really sick, that had very little demand, that had high unemployment, and that happens to be when student debt on an annual basis peaked. It's actually been declining since 2011. So maybe the one-off nature of this policy is totally moral. And then thought number six is that maybe I don't have any standing to deeply criticize this policy.

And maybe it's fundamentally immoral for me who has no student debt to criticize a policy that brings everyone else to student debt figure closer to mine. Last year I called this policy, student debt forgiveness, a B-minus idea in a C-plus world. I think that's still pretty much right. And joining me today in my state of tortured ambivalence is Atlantic writer Jerusalem Demsus. Together we walk through the best case for and against this policy. We discuss and occasionally debate the economics,

the morality, and the politics of student loan forgiveness. If you have any feedback for this episode or ideas for future episodes, please email me at plain English and Spotify.com. I'm Derek Thompson. This is Plain English. Jerusalem Demsus. Welcome back to the podcast. Hi, Derek. Thanks for having me. Since Joe Biden announced his plan to forgive up to $20,000 of student loans for tens of billions of households,

I've been pretty overwhelmed by the chaos of the debate over this law. And before sitting down to do this podcast, I wanted to figure out, like, why is this debate in particular so overwhelming and nonsensical? And I think it's because there isn't just one debate happening here. There's at least five different debates about this policy that are pretending to be talking to each other. You've got people debating economic justice, racial injustice, politics, the consumer economy, inflation, education financing. So what I thought we would do here is rather than have a scrum where we pretend to talk about all these things at once, we break them down into their constituent categories and talk about them one by one.

So let's start first with student loan forgiveness and the case for economic justice. Now here I've heard two broad classes of arguments. On the one hand, I hear people who say, look, student debt is morally indecent. No other country has saddled a generation of college graduates with debt like this for committing the sin of getting a college education. But then there's this other group that says, well, you know, debt is a contract. This was a contract that was taken on knowingly. and it happens to be held of a student debt

by Americans who overall are roughly middle class or have average to above average incomes. So I wonder, do you think one side has the clear advantage here? Yeah, I mean, I think that both those arguments certainly are being made a lot, and I think that they're both kind of wrong and where they're coming from, because I don't think it's useful to kind of talk about, you know,

the moral valence of debt in the abstract and like whether or not it's fair or whatever. I think the question is, does this debt allow people to make their lives better or not, right? So, you know, I took out, I think, roughly $30,000 in student loans to go to undergrad. That's all federal debt. And my parents not have the money to pay directly for my tuition. And so I was able to go to school. And then I was able to get a job that was good enough to pay down that debt.

And so for me, the bet really pays off, right? And then there are some people for whom that doesn't happen. They either they don't get a job that help lets them do so. Maybe they don't finish college, and so they don't get the benefits of an increased wage premium that comes with a college education a lot of the time. So, you know, I think the real question here is like not, oh, does debt in the abstract? Is that good or bad? But like there's a reason we're talking about student loan debt and we're not talking about

forgiving a bunch of people's mortgage debt, right? Because it's broadly accepted within the United States that taking on mortgage debt is, of course, a great bet. You're getting to leverage a ton of money that you don't actually have in order to make a to pay for something you definitely need regardless, you have to have shelter. And so people don't talk about forgiving mortgage debt in the same way. So I think the big question here is just,

is this bet actually paying off for most people? Could someone make the argument that we already do use federal policy to preference mortgage debt? Because we have a mortgage interest deduction in the federal tax code. But on the other hand, with student debt, we don't have similar privileges,

the tax code. We don't allow student debt to be written off in bankruptcy, that while it's useful to build human capital and move people hopefully between classes, it's not treated the same way that other debt is treated and that maybe this policy is a way to rectify that historical injustice, that finally now we are treating student debt a little bit more nicely like we treat other debt. Yeah, I mean, I think this is one of the weird things with policy debates when people talk about like kind of balancing instead of like fixing the actual problem. Like, yeah, student debt should be able to discharge your bankruptcy. And like, we shouldn't just like try to make student debt a little bit better in some random way. You should just fix the actual problem we've identified, which is that if you were bankrupt, you definitely didn't probably get a good, you didn't get the good benefits that come with a college wage premium that you were clearly not living the economically productive life that you were promised after you went to school. And so you should just allow people to discharge the debt. during bankruptcy. I think it's very odd. And I think this is like a kind of a larger problem we have within politics is when people feel like the actual problem is too difficult to solve or there's like some political barrier in the way of solving that problem. They kind of like nibble around the

edges in weird ways in order to kind of attack the problem. And often it's to satisfy some constituency or because they actually do feel bad about the problem that exists. But in doing so, they end up pursuing policy aims that don't actually address the core harm that's being perpetrated on a population. One of the reasons that I struggle with this policy so much and why, as I mentioned at the open, I feel like it's a C plus policy for a C plus world, is that I think there is a accurate diagnosis here that the way that we finance public education in this country is really messed up and that there's simply too much student debt and that there are reasons why there's too much student debt. We don't have enough local state financing of public institutions and that as a result,

that decline in local and state financing is put on the backs of families and students. I think it's a really useful diagnosis. What's weird about this prescription is that we've identified a chronic problem for Americans and as a prescription applied a one-off means-tested cash transfer. We don't do this with other problems in America,

at least typically or ideally. Like if we say, you know, raising a child in America is too expensive. We have to find some way to reduce the cost of raising a child in America. It's very strange to say,

as a result, what we're going to do is give $10,000 to every family that happens to have a child between the ages of 5 and 15 today and is under $250,000, and next year we're just going to stop the policy entirely. It's just a one-year policy. Okay, well, people are still going to have children

next year, and the year after that, and the year after that. And in the exact same way, people are going to still go to college next year, in the year after that, in the year after that, and we're not doing anything with this policy for them either. I think you've actually identified a pattern, since we kind of did do this, the child tax credit, which is why.

We did. So with the child tax credit, we essentially topped it off for like nine months only, for 12 months only, and then we couldn't pass extended child care. So you're a child tax credit. So maybe you're entirely right. Maybe we do just keep identifying chronic problems and applying acute one-off solutions. But to that point, maybe just talk about the degree to which, This is a very contained problem, or excuse me, I should say, a contained solution that really doesn't do anything for the broader issue of education financing.

Yeah, I mean, I think that the core issue of college costs being too onerous for folks, and then the other core issue of are people who are graduating from college getting good enough jobs are actually quite separate from the question of people who currently have debt. How do you help those people out? But we've conflated all three conversations together, right? Like forgiving student loan debt doesn't really do anything for people who are having trouble finding good jobs, good paying jobs. It doesn't do anything really for people who are, you know, kind of scared against sticker shock from the price of college tuition right now. And maybe they don't go to the school that would be best for them or their labor market

outcomes or for the fact that we're not really sure in a lot of places why exactly we're seeing such ballooning college costs. There's like so many different theories out there right now. but we're not actually really sure what the diagnosis is on why that's happening. And so all of these different things are all being kind of put together under the same blanket of, quote, higher education affordability. And then that blanket is kind of being addressed on this one-off college debt forgiveness. I mean, there's one part of this policy, of course, that we've yet to mention around

income-driven repayment, which does try to deal with this problem in perpetuity. So income-driven repayment basically what it tries to do is it counts. the monthly payment that someone has to make on their college debt at a reasonable level of their discretionary income. And, you know, Biden with this new plan has said essentially that it's even more generous, like even a smaller percentage of your discretionary income from 10% to 5% now of your discretionary income can now be taken on when you're making income-driven repayments. And so, you know, that's something that does try to address the problem in perpetuity. I mean, there are people who have pointed out some issues with this, but I think it is actually

an attempt to do something about the fundamental issue of the debt burden that people have to carry on. But again, you're right, does not address the core problems of higher education financing. I think you're totally right. And I'm really glad that you schooled me there in terms of bringing up the fact that the child tax credit is a perfect example of how we identify a long-term problem and apply short-term solution. I suppose the distinction is that right now, if you look at the terms of the debate, it's the left or liberals who are saying, this is a really good policy by Joe Biden and the right saying it's a bad policy.

Whereas the child tax credit, it was the left that was saying, we need to extend the child tax credit and make it permanent because this is a permanent problem. People will keep having children and children will be too expensive given all of these certain inputs

for raising a child in America today. Whereas I don't see enough as much energy right now in terms of turning this one-off solution into a chronic solution. There doesn't even seem to be that much energy in terms of getting Biden

to do something blatantly political, like announcing some kind of blue-ribbon commission to say, we're going to look into the inputs in terms of why education inflation is so incredibly high, and we're going to really figure this out in a bipartisan manner and come up with all sorts of solutions that can, you know, pull down tuition inflation over time. It does just weirdly seem like a one-off thing. You mentioned education financing. Let's talk about that specifically. As you said, the $10,000 of $20,000 of forgiveness is not the only part of the policy that matters. There is also the fact that student loans are now eligible for this new income-based repayment plan. Do you worry that the

income-based repayment plan plus the $10,000 to $20,000 of student loan forgiveness are going to send a signal to colleges that say, keep raising prices, we're not going to do anything about those tuition prices, that's the federal government, we're not going to do anything about these tuition prices, but we are going to, on the back end, give your students. a bunch of money or limit the pain of holding debt. And so you can raise prices as much as you want, and we're not going to do anything about it. Do you feel like it may be sends colleges and universities

that pernicious signal? Yeah, so policy won Matt Brunig makes this argument in a blog post. So folks who are interested in how this will play out can go read that. But I think generally, kind of the logic of this, right, is if you know going into college, that all that's going to happen when you take out debt is that 5% of your discretionary income will be removed from your, um, uh, from your, uh, paycheck

every month. And at the same time, too, that after 10 years, you know, it's, you're not paying anymore. It's over. If you know that, it doesn't really matter to you, right? Like how much money you're taking out in debt because you're paying the same amount of money regardless. And so the concern here, right, is that, which you kind of articulated here, is that like, because students will become more insensitive to the amount of money, they're expected. to take out in debt, then colleges can say, okay, I'm actually going to charge you the full amount student that I previously was giving some sort of discount to or trying to reduce tuition for. Instead, I'm going to charge you the full amount since I know the federal government's going to just give you that money.

And then the college can turn around and create their own kind of income-driven repayment program where they can essentially give you some of that money that the federal government gave them. And so that sounds really convoluted, but essentially what happens is that all of that money that the federal government has loaned out just goes straight to college coffee. and individual students are often not really paying attention to where that's happening, but it allows colleges to continuously raise tuition. And it contributes to, of course, like ballooning college costs. And then there are beneficiaries of this essentially end up being these colleges and universities

and not actually addressing the core problem of college costs. So I think that's like a reasonable, you know, there's a reasonable argument there. There are caps on how much money you can take out for student debt based on a variety of things, including your parents' income and stuff like that for federal student debt. So it's not like infinite. You can't just like take out like infinite amounts of money from the federal government. And also like people do experience sticker shock with prices. We do know this from like economic research that people often don't realize that the money

they're paying is not usually the sticker price on college websites. And so like the idea that the college website would now say like $100,000 a year for tuition is not like something that colleges could just do without any sort of cost to the types of students that would be willing to come there and the decisions those students would make. and of course people just have a general discomfort with carrying large debt burdens, even if the income-driven repayment thing becomes really a common to use. And so I think there are a lot of reasons to think this won't be as insane, but I do think it is a real problem.

And I think that one thing that I've heard is that perhaps this will force policymakers to really take seriously the underlying issue of college costs ballooning, and the sticker prices ballooning, because they'll be afraid of kind of getting ripped off by colleges and universities here. So I'm not sure how much stock I put in that, but people are saying it. It's sort of some people call this like the accelerationist argument. You make the problem of tuition so eye-bleedingly obvious that politicians have no choice but to get together and set up that blue ribbon commission and do something like price controls

in college campuses. You know, I could say the problem is already pretty eye-bleedingly obvious. We just gave $15,000 away to tens of millions of people because student debt is so terrible. But, you know, I think you did a great job explaining that policy, and I just want to be clear about what the outcome of this policy is. If the federal government is encouraged to continue to subsidize universities and colleges without any kind of price sensitivity on the part of students, what it means fundamentally, especially in a high inflation and high interest rate environment, is that you have taxpayers funding governments to pay universities to hire. more administrators. Now look, I am not against college administrators. I think college administrators can be absolutely essential and do some wonderful jobs. But the way this system is going to work out, the way it's going to cash out, if the worst happens, if these incentives are followed to their logical

conclusion, is that more tax dollars are going to the federal government to hire more and more and more college bureaucrats. And that just doesn't seem to me like the absolute best use of money in a world where we have very serious problems and where we are somewhat constrained because interest rates are much higher today and will continue to be higher than they were for much of the 2000 to the 2010s. This is not a world without trade-offs anymore.

So let's actually go to the economic question here. There's a consumer economic argument that says that student debt and student loans have for many, many years, been holding back the U.S. economy. That has kept people from buying houses. it's kept people from buying cars. It's kept people from taking the job that they really want

because they were taking the job that was paying them the most money rather than the one that was the best expression of their skills. How do you feel narrowly about the argument that relieving student debt could unleash the consumer economy in these ways and in particular help the cause of housing affordability? Yeah, I mean, this is something that gets cited a lot around how canceling student loan debt could boost home ownership. And on the margins, right, it makes a lot of sense to the argument, right?

Like, this is a group of people that likely has reasonably high income jobs. Like, one of the things that might be holding them back from getting a mortgage is that they have this high debt burden that they have to service. And of course, just in general, like, you give people money. They have more money. They'll spend it on other things. And therefore, one of the things they might spend it on includes a house. And so, you know, that's an argument for, like, just giving people money. And, like, maybe they would increase their home ownership rate.

we would increase the U.S.'s homeownership rate. But I think there are a couple things weird about this. Like, one, like the problem with the housing market right now is that an insufficient amount of demand. I mean, at least in general, like not talking specifically right now, but like in general, the issue is not that like people, there aren't a lot of people who are trying to buy homes. The issue is, as we talked about in this podcast before, Derek, it's a supply side problem.

It's an issue of how much housing availability there is where people need it and that the type of housing that's available actually meets their needs are there. smaller single-family homes, are there homes that have enough bedrooms for their kids near jobs that they need to work in? So, like, this is the real problem with housing affordability. And there's some evidence that if you don't actually deal with that, just increasing demand, it does increase potentially the homeownership rate, but it also could raise prices because you are increasing demand for a good while the number of goods is actually pretty stagnant. So that's kind of a problem there too. But I think, like, most broadly here, like, I don't know which way this plays out.

Like, perhaps it increases the home ownership rate some small amount. But I think the question here is just, is this the policy that someone would pursue if they were actually concerned about whether or not people were able to afford homes? If they were concerned about whether people were able to buy the kinds of goods they wanted, whether it's housing or something else, I think the answer there is, like, transparently no. This is one of those arguments that's, like, come about because, you know, someone was able to run some sort of study and found there was, like, some small income. in homeownership among people who did not carry student loan debt and people who did carry student loan debt. And so it is not the case at all that if you talk to like housing economists

or housing policymakers that on the top 10 list of things that they want to have happen in order to increase the home ownership rate, that student loan debt makes an appearance. So I think that's one of the weirdest arguments I hear a lot. This leads to the question about inflation. There was a huge, huge debate among centrist and conservative and liberal economy. about whether or not this policy would increase inflation at a time when we are clearly trying to pull inflation down. So on the one hand, there are people who say that there's already a student loan moratorium. So this doesn't radically change the status quo. There are tens of millions of people that aren't paying interest on their student loans and have not been since March 2020,

and they will simply continue to not pay as much on their student loans after this amount is forgiven, and I suppose that in a few months that moratorium is going to end. On the other hand, I've been surprised by the number of liberals who reject the idea entirely that this will affect inflation, because right now you have the Federal Reserve very busy trying to depress the purchasing power of Americans. But it seems to me, and tell me if you think this is wrong, but it seems to me that one of the reasons to forgive student loans is to raise the purchasing power of student debt. betters. So why do we think that raising the purchasing power of tens of millions of people

won't raise the overall purchasing power of Americans at a time we're trying to destroy demand rather than create it? So I don't think it's catastrophic. I'm not one of these people who's like, oh my God, we're pouring gasoline on the fire of hyperinflation in America, like this is the path to Weimar. Not that at all. Not that at all. But like at the margin, I don't understand how this would reduce inflation. And so it seems very likely to me to at least buffing. a little bit the inflationary winds that we're trying to cool. Yeah, so I've dunked on a few arguments made by the pro-student debt cancellation folks. I think it's one of those anti-student cancellation arguments that's also quite bizarre

that there's so much energy on it because I agree that like, you know, the net effect of this has to be so marginal, even though the claims that people are making on the side of this will increase inflation are just like very, very small. And the reason is because this is not a policy where people are being handed like 10, thousand dollars or twenty thousand dollars what's happening is that people are getting no like a bill is disappearing in future imagine someone said like your cell phone bill is disappearing for the future like yes maybe you feel like 75 100 dollars like richer each month but like for the population of people that we're talking about here that's not something where all of a sudden like you know your

behavior might is going to change drastically and you're going to be buying a bunch of stuff like right now like heading to your amazon and and and clearing out your shopping cart immediately i mean this is the kind of thing where it's not really clear to me how people end up fully behaving obviously they do have their on the margins, their purchasing power is increased. So like we would expect potentially that they would maybe increase more. But also as a population whose marginal propensity to consume, like it's lower than average. And by that it means like the marginal dollar that a population gets when it's relatively high income, they are more likely to save it than spend it when compared to people who are poor, obviously.

Because if you're poor, you have a bunch of needs that are not being met currently. But for this population, a lot of the arguments that the anti-student debt can't insulation crowd has made, is that this is not a population that really needs the money. And that indicates to me that this is also not a population that's going to go out and need to spend a bunch of money right away either. And I, you know, and also at the same time, like, I think that it makes sense that given that this population has had, you know, a moratorium on payments for a long time, they've kind of normalized to the level of income that includes not paying their student debt off. So like, you know, maybe sure this does some little bit on

inflation, but as many people have talked about for the last year or whatever, the focus on inflation is not going to be whether or not, like, student debt gets cancel or not. It's going to be on a lot of other factors that have to do with supply chains and have to do with Fed policy that have to do with other fiscally expansionary, contractionary policies. It's just not to me, like something that we should be focusing on. And the fact that it's gotten so much airtime is bizarre. Yeah. It's interesting. I feel like you're disagreeing with me at actually a really, really smart way. I mean, I try to, like, put both arguments that I'm hearing on the table that the student loan moratorium is already happening. And this doesn't really change the status

quo that much. So why would it have a huge inflationary effect? But I do think that you're right, that thinking about this as a cash transfer is a little bit strange because it's like, it's almost like an amortized cash transfer into the future, right? It's like saying to someone, you're not going to have to pay your mortgage for 12 months, 12 years from now. Right? It's like if I, it's like giving someone a bunch of money that's not actually going to make contact with their lives necessarily for many years. And that as a result is very likely to affect consumer demand in the next month. I think you're, I think you're probably right that that's the right way to think about it. And behavioral economists out there, if you, if you guys are take issue with what I've just said because there's some research, please, please reach out. No, I think you're totally right. I mean, I follow a lot of economists who have been analyzing. the inflationary effects of this policy.

And, you know, the argument that sat best with me was this idea that, look, a lot of people were arguing in 2021 that on the margin, one reason to support student loan forgiveness was that we needed a little bit of a kick in the butt in terms of demand. And so this couldn't hurt. Not only is it helping people who've been overly burdened by bad federal education policy,

but also we could always. use a little bit more demand. But right now we're in a situation where we clearly could not necessarily use a little bit more demand. In fact, we're actively trying to destroy it. And so shouldn't the argument flip? But what you're saying, and actually, I'm actually changing my opinion here. I think you're right. What you're saying is that argument might have been wrong from the beginning. It might have been wrong from the beginning that this policy was going to have almost any effect on sort of month to month, immediate month to month demand. I think that's probably true. Let's go into politics. Because the political dimension of this, I think, is very interesting.

I first want to talk about this from the perspective of Democratic, capital D, democratic politics. So on the one hand, only 13% of the country currently carries federal student debt. On the other hand, that 13% is about 40 million Americans who are disproportionately college-educated, like almost by definition, these are student loans, and therefore leaning Democratic because college-educated Americans have been listing toward the Democratic Party for the last few years. There's a midterm election a couple months from now, and these 40 million Americans who, who are overall leaning Democratic, have just gotten billions and billions of dollars

going forward over the next few years. What else should we be thinking about when considering this sort of political strategy behind this policy? Yeah, I think this is actually the most interesting part of the debate because I think that often people are discussing policies. They're just like, is this good or bad?

Thumbs up, thumbs down. And there's not a lot of discussion about agenda setting and how it happens. Like, how is this policy something that we're talking about, Why is it gotten to the fore when there's, you know, ostensibly there's a million different policies that could have garnered this much attention. How did this get this much purchase?

I think it is really interesting. I think largely, of course, you know, it has to do with the growing power of college-educated voters. It's not just something within the Democratic Party, but it is largely within Democratic Party that we're seeing college education explain a lot of who chooses to vote for Democrats. And, you know, there's even been explicit stuff. I've seen like a, you know, Democratic Party communication staffer tweeted, like, of course, this is, we're giving money to our base. So it's just some of those things like, okay, like, clearly. And like, you know, that doesn't have to be bad. Like, people want to reward voters who

vote for them. Like, that's what you do when you get into office. People vote for you into office. And then you provide them the services and the policies that they ask you to provide. And that's not necessarily bad. I think it just helps explain it. The second thing, of course, is that, you know, the Great Recession, I think was a unique phenomenon, right? And it's really become like a really big political sticking point for people, which is that, you know, if you graduated in college during the Great Recession, like, you just got the worst luck imaginable. I mean, it was a really bad time to be joining the workforce. This group of people is now kind of in their prime, entering in their prime, like, home buying years. This is the group of people that's, you know, older millennials

who have a lot more voting power now and are a lot more relevant to Democratic Party politics interest, but then before when they were much younger. I mean, this is the group that was, you know, ignore during Occupy Wall Street. That's where they are now. Now they're much older. Now they're really relevant to the interest in the Democratic Party. And I think that like the question of like how this plays out is really hard to tell. I think you see a lot of polls that indicate that people are in favor of this move by Joe Biden, especially younger folks are in favor of this move by Joe Biden. I think that it's really hard to tell because often when people get asked questions, they interpret them kind of broadly. And I think that the one way is that, you know, people hear like, oh, should

student debt be forgiven? And they think kind of hear like, Shouldn't college be affordable for people? Like, shouldn't the American dream be accessible to individuals? And also, often, a lot of these polls don't actually explain the con arguments. You can get a majority on basically anything to say it if you don't explain to them the reverse harm of that policy. And so I do think this is, like, probably net popular. I don't think it's, like, massively popular or anything like that. But I think it's probably net popular amongst a group of people that is the Democratic Party's base.

But I also think that, you know, I think that people are tend to really blow up. off the unfairness argument because they don't think it has merit. And I'm not someone who thinks we should evaluate policies based on whether someone in the past did not have access to that benefit or not. But I think generally, people get kind of mad when like, you know, something that seems like they worked really hard to avoid, whether or not it's true that it's based on hard work, but they feel like they worked hard to avoid it is not being given to someone else. I think that's just something that's kind of like a fact about human nature. I think there are probably a good amount of people who get annoyed by stuff like that. But I guess the fundamental

question the end of the day is like, are people voting on? student debt relief. You know, are they voting on this question of whether or not Joe Biden forgave $10,000 or $20,000 of student debt? All of evidence indicates that stuff around the economy and increasingly abortion are things that are driving a lot of what's going on within the electorate coming up in the midterms. It does not really make sense to me. This would be a big factor, but I think the smartest argument in favor of Joe Biden doing this from a political perspective has been the idea that, you know, it helps this general sense that Joe Biden's getting stuff done. We have past build back better. We have infrastructure funding. We have now a promise

that he made on the campaign trail to forgive some student debt. I mean, these are things where you kind of have a general sense that, like, this is a president who's acting in a way that is in favor of my coalition, even if the specific policy itself is not super relevant. There's one more piece of politics that's really interesting to me, which is the way that this policy was created. This is not a law. This is not a piece of legislation. This is a decision by the executive. branch. And building wealth for low-income Americans, bringing down the cost of education, which is the biggest goal here, that is complicated. That is a long, long process. On the other hand, canceling student loan debt is a pretty easy change. It's a pretty easy thing to do. And so

Biden could do it. But I wonder if it seems easy now, but it won't actually be easy to be operationalized because the courts might strike it down. Something like this hasn't really been tried before. So what is your outlook for the degree to which this policy even survives the next few months of legal challenges? Yeah. So one of the big arguments for why it was important to focus on this policy was that, you know, Ayanna Presley said that it would take just a stroke of a pen to get it done. This is not something that has to go through Congress. It can be done by the executive. The legal theory that this comes from is from a, I believe it's a Yale law graduate, who co-founded the Debt Collective, which is a nonprofit fighting to reduce debt burdens,

student debt, but also medical debt, other stuff like that. And basically, it's like an argument that gets made up in 2017. And I mean, I don't say made up in like a pejorative sense. I mean, like legal theory that gets developed and is quite novel in 2017 by this person at the debt collective. And, you know, it's not been taken. tested in any way, right? There's been some counterarguments by lawyers. I'm not a lawyer. I'm not really qualified to evaluate the validity of these things. But there are quite a few law professors who are very skeptical that this is something that will be upheld by the courts, especially now that we have a very conservative Supreme Court that doesn't seem particularly interested in granting the

executive branch a ton of power to be innovative. I mean, we've seen recent rulings and just other comments they've made in dicta that indicate that they are really suspect of the federal government kind of following the sort of legislating process, whereas there's like a really broad power granted to the federal government by Congress. And then, you know, agencies can kind of just go in and like do a bunch of policymaking that they feel should be left up to Congress, that the Supreme Court feels that should be left up to Congress. And so I think that it's one of those things where it's not clear what happens is a really novel place. But I mean, I don't think Democrats are in a really good position with the courts to bank on that they're going to

allow them to do this kind of novel behavior. I think it is hard because, you know, at the same time, the court has allowed tons of debt to get effectively canceled by pausing the, by allowing President Donald Trump and Joe Biden as well to pause the student debt payments that hasn't been challenged. And I think one of the really big questions here is like, who even has standing to challenge whether or not the courts can, whether or not the executive branch can, whether or not the executive branch can cancel student debt. So there's a lot of really weird legal things going on right now. It's not really clear how it's going to shake out. If it does end up going to the Supreme Court, I am not very optimistic this stands. But yeah. So we've talked about this policy from a bunch of

different angles. We've talked about its economic effects. We've talked about its morality. We've talked about its effect on the future of education financing and we've talked about its political dimension. I want to close by giving you the stage to tell me what you think the best case for this policy is and what the best case against this policy is? The best argument for it is that like the government can do something easily and quickly to alleviate a financial burden on a population of people, many of whom would be very helped by that. I think the case against is that there's a, there's a million things that you can be doing and that the government can be doing to help people. And I am very skeptical about the amount

of time and attention that has been taken up by this policy. And a lot of the arguments in response to my skepticism have been kind of just like, oh, but it's so easy to do. It's a stroke of a pen. And that kind of ignores that the reason why there is even this novel legal theory that allows the federal government to consider debt cancellation is because a ton of time and energy and attention were given to this issue to begin with. And so I think throughout this podcast, I sound like pretty ambivalent about this. And that's because I am pretty ambivalent about this. I'm pretty ambivalent because I don't think that this is something where if I would order my top 100 policies for the federal government spent time on, that this would place anywhere in there. And I think that's also

true for a majority of Americans. I talked to Gallup earlier this year, and they asked us question about, what is the most important problem facing the nation? And this pollster told me that they're unable to report the percentage of Americans who have mentioned student debt or cancellation, because it hasn't garnered enough mentions to do so. And that in four polls that this guy had conducted in the last year in 2022, where this is already a hot button issue, only one respondent has ever mentioned this is the most important problem facing the nation. And now, the government does a bunch of stuff that is not the most important problem. I'm not trying to say that this is something where the government should act completely in a, you know, or create an order list of all

of the, all of the policies that matter. But I do think that we should be skeptical in general about the agenda setting power that we as college graduates have and whether we're using that to benefit the progressive policies we say are really important. or if we're doing it just fully out of self-interest, which, you know, that seems to me what's going on here. Jerusalem Demzis, you could read her at the Atlantic. Thank you so much. Yeah, thanks for having me.

I'm Derek Thompson. That was Plain English. Thanks very much to our producer, Devin Manzi. If you have any questions, comments, ideas for future episodes, please shoot us an email at plain English at Spotify.com. That's plain, no space English at Spotify.com. and don't forget to check out our new, beautiful TikTok page. You can find us at at plain English underscore.

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