Tangle - Biden tries again on student debt cancellation.

Episode Date: October 17, 2023

Student loans. Earlier this month, student loan repayment restarted for the first time in three years. Shortly thereafter, President Biden announced an additional $9 billion in student debt cancellation, a move that impacted roughly 125,000 borrowers. The administration says approximately 3.6 million Americans have now received $127 billion of student debt relief, and the Biden administration is now exploring other options for larger-scale cancellation.You can read today's podcast ⁠⁠here⁠⁠, today’s Under the Radar story ⁠⁠here⁠⁠, and today’s “Have a nice day” story ⁠⁠here⁠⁠. You can also check out our latest YouTube video, a recording of the “My Take” from Tuesday’s Israel piece ⁠⁠here⁠⁠.Today’s clickables: Quick hits (1:03), Today’s story (2:50), Left’s take (4:57), Right’s take (9:12), Isaac’s take (13:31), Listener question (16:36), Under the Radar (21:08), Numbers (21:59), Have a nice day (23:06)You can subscribe to Tangle by clicking here or drop something in our tip jar by clicking here.Our podcast is written by Isaac Saul and edited by Jon Lall. Music for the podcast was produced by Diet 75. Our newsletter is edited by Bailey Saul, Sean Brady, Ari Weitzman, and produced in conjunction with Tangle’s social media manager Magdalena Bokowa, who also created our logo.--- Send in a voice message: https://podcasters.spotify.com/pod/show/tanglenews/message Hosted on Acast. See acast.com/privacy for more information.

Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. The flu remains a serious disease. Last season, over 102,000 influenza cases have been reported across Canada, which is Chinatown is streaming November 19th, only on Disney+. yourself from the flu. It's the first cell-based flu vaccine authorized in Canada for ages six months and older, and it may be available for free in your province. Side effects and allergic reactions can occur, and 100% protection is not guaranteed. Learn more at flucellvax.ca.

From executive producer Isaac Saul, this is Tangle. Good morning, good afternoon, and good evening, and welcome to the Tangle podcast, a place we get views from across the political spectrum, some independent thinking, and a little bit of my take. I'm your host, Isaac Saul, and on today's episode, we're going to be talking about student loan forgiveness. Earlier this month, student loan repayments restarted and the Biden administration is looking for a new way to cancel student debt. So we're going to talk about exactly what's going on. Obviously, this story has not been in the news a bunch since the Supreme Court struck down Biden's original plan, but we're going to catch you up on everything

that has happened. Before we jump in, though, as always, we'll kick it off with some quick hits. First up, House Republicans are expected to hold a full House floor vote today to determine the next speaker, with Representative Jim Jordan, the Republican from Ohio, the favorite to capture the gavel. Number two, President Biden will head to Israel today as a show of support and then travel to Amman, Jordan to meet with Palestinian President Mahmoud Abbas, Egyptian President Abdel Fattah el-Sisi, and Jordan's King Abdullah II. 3. Russia returned four Ukrainian children to their families as part of a Qatar negotiated deal. Ukraine has accused Russia of kidnapping more than 20,000 children during the war.

4. A federal judge in Washington, D.C. issued a gag order on President Trump, the second this year. Trump saw a surge in fundraising afterward. Number five, violent crime in the United States dropped last year, but property crime skyrocketed, according to data in the FBI's annual crime report. More than 28 million people must now begin paying their student loans back. The resumption began this month, and it's expected to be challenging in many ways as the Department of Education tries to answer borrowers' questions about how the monthly payments will look. Interest will once again accumulate on federal student loans

in September. In October, loan repayments are set to be scheduled. This marks the end of a three-year pause on both that started under former President Trump as a response to COVID lockdowns. The fact that they stopped for three years in the first place is a once in a lifetime thing. It's never happened before. It almost certainly will never happen again. Earlier this month, student loan repayment restarted for the first time in three years. Shortly thereafter, President Biden announced an additional $9 billion in student debt cancellation, a move that impacted roughly 120,000 borrowers. The administration says approximately 3.6 million Americans have now received $127 billion of student debt relief, and the Biden administration is now exploring

other options for larger-scale cancellation. In Biden's original plan, borrowers who made under $125,000 or $250,000 as a couple would have qualified for up to $20,000 in relief if they had received a Pell Grant and up to $10,000 if they had not. The plan would have canceled $400 billion of debt and impacted nearly 43 million American borrowers. Biden tried to use the HEROES Act of 2003, which was designed to grant relief to student loan recipients in connection with a war, military operation, or national emergency to cancel student debt payments. However, the Supreme Court ruled that Biden was exceeding his authority in that attempt. Biden has since directed the Education Department to find another path for debt cancellation. Now, the administration is exploring options

through the Higher Education Act in meetings known as negotiated rulemaking, which the Education Department regularly holds to gather input from people outside the government. Similar to the HEROES Act, the Education Act grants authority to the Secretary of Education to waive or release student loans. However, the same question remains of how far that authority extends. With student loan repayments restarting this month, some economists have suggested the resumption of payments will cause a drag on the economy. Biden is trying to avoid such a downturn and fulfill a campaign promise to young Americans that he would cancel some of their student loans. Today, we're going to take a look at some of the reactions from the left and the right for the latest on student loans, and then my take. First up, we'll start with what the left is saying. The left thinks Biden and Democrats

need to do more to offer relief to borrowers, but their solutions vary. Some propose targeted relief for those who are most impacted by the pandemic. Others say the responsibility falls on Congress to take aim at the worst elements of the federal student loan system. In the New York Times, Yara Marabonio wondered what pain will a new wave of student loan payments bring. Loan payments are resuming at a time when the cost of living has risen sharply, interest rates are higher than they've been in years, and the average American household is carrying an estimated $10,000 in credit card debt, Bonilla said. The Biden administration can craft more robust changes that could affect student loan borrowers now and into the future, even if those

changes could take months, if not years, to hammer out. But the new effort no longer addresses the unfair burdens of the pandemic. For workers who lost wages, the pandemic has introduced the economic equivalent of long COVID. They haven't recovered from the financially devastating blows of this virus. A targeted relief program focused on those who lost their savings in the pandemic could help people get back on track. More effectively regulating interest rates, offering relief to those who have overpaid because of compounded interest, and developing a program similar to the public service loan forgiveness to address pandemic debt would be crucial steps forward. The Biden administration has already started to quietly reform the student loan system

by creating an income-driven repayment plan, canceling the debt of people who went to predatory colleges, and expanding the public service loan forgiveness program. But we need more than reform. We need true transformation. In MSNBC, Eleni Schirmer said if Biden can cancel some student debt, he can cancel all of it. The president still has the power to cancel student debt swiftly, completely, and for everyone, Schirmer wrote. While Biden is showing his willingness to pursue cancellation, the effort needs considerably more gas. Canceling student debt is perfectly legal and urgently needed. These adjustments all depend on the Higher Education Act, which lets the Secretary of Education modify, compromise, waive, or release existing debt. But there's nothing in that law that delimits either

the volume or the velocity of cancellation. If Biden can cancel a corner of the debt, then he can cancel it all. Because the president has not gone this route, though, student debtors are facing their first loan payments in three years. The Department of Education has attempted to soften the blow by revising repayment plan options, supposedly helping borrowers lower their monthly payments, but many borrowers are reporting that their payments have instead skyrocketed. Many student debtors are feeling left high and dry, Shermer said. The president has promised them an alternative. Now it's time to fight for it. For Inside Higher Education, Representative Joe Courtney, the Democrat from Connecticut, made the case for a bill that would eliminate interest on federal student loans. With the reactivation of debt collection on a portfolio of $1.7 trillion for 43 million borrowers,

there are many reasons for Congress, on a bipartisan basis, to reduce the consequences this will have at both the macroeconomic level for the country and the micro level for borrowers and their families. both the macroeconomic level for the country and the micro level for borrowers and their families. Paying the bill for that amount of debt will significantly stress borrowers' budgets, and the fallout will ripple beyond just the plight of those 43 million Americans. Ask any real estate agent and they will tell you student loan debt is one of the biggest barriers for new home buyers. In July, I introduced the Student Loan Interest Elimination Act alongside Senator Peter Welch and 23 House co-sponsors. The bill would virtually eliminate interest on federal student loans for current and future borrowers, Courtney said. Here's how it works.

Rather than having borrowers' principal and interest payments deposited in the U.S. Treasury General Fund, the borrowers' principal-only payments would be deposited in a revolving trust fund where they would be invested in low-risk securities. The gains on those investments would be used to defray the cost of the student loan program, thus avoiding a negative impact on the federal deficit. Such a mechanism is used today to fund the right is saying. The right has opposed any additional relief for borrowers and thinks student loan repayment should resume in full. Some say Biden continues to pursue loan forgiveness programs for his political benefit, but at the expense of taxpayers.

Others suggest colleges should bear some of the burden of the country's student debt crisis. In National Review, Robert S. Etel and Paul Zimmerman criticized the Biden administration's zombie student loan bailout efforts. Biden's Department of Education has announced a new rulemaking committee to search for new ways to appease the left's demand for a massive student loan debt bailout. The department's appointments of negotiators to its Student Loan Relief Committee show that the fix is in, Yutal and Zimmerman said. The 14-member committee includes four student representatives, three student loan borrowers, and one currently enrolled student, one of whom has demanded cancellation of all student debt and tweeted about the generational trauma caused by student loans. Notably absent from the committee's membership are representatives of organizations that advocate for the very people who have to pay for the bailout, taxpayers. This snub is an admission that the administration is not concerned about the cost of its debt forgiveness and doesn't want the discussions to deal with the unfairness

inherent in forcing people who never attended college or paid off their student loans to underwrite the debt of others, they said. The administration is making the mistake of gravely underestimating the common sense of the average American who can identify an illegal and unfair policy when he sees one. In the Daily Caller, Andrew Wilford calls the Biden administration's messaging on student loan repayments outrageous. Even as student loan repayments were finally allowed to resume after more than three years, the Biden administration recently announced yet another $9 billion in student loan forgiveness. For taxpayers concerned about how a total of $204 billion in loan forgiveness under President Biden will affect the out-of-control national debt, fear not. Apparently, it benefits everybody and hurts nobody, Wilford wrote.

That's a very hard claim to take seriously. While the White House claims that it has forgiven $127 billion in student loan debt, the Committee for a Responsible Federal Budget, or CRFB, estimates that the total cost is $204 billion, including the $9 billion in additional forgiveness. Factoring in $69 billion in additional interest obligations, that brings the total cost to taxpayers to $273 billion. The idea that student loan forgiveness grows the economy and benefits everybody is also highly questionable. Throughout the pause on student loan repayments, the majority of the benefit has clearly gone primarily to Americans who took out big loans to pursue lucrative careers. CRFB estimates that 70% of student loan debt is held by just a quarter of borrowers,

borrowers who benefit most from student loan repayment pauses because they often have high interest rates. In USA Today, Inez Stepman argued the government should tax universities, not the rest of us, to deliver loan forgiveness to struggling students. The resumption of student loan payments after a long pandemic hiatus will worsen household finances for many families already stretched thin or spending on credit due to inflation and the generally poor economic outlook. But asking the majority of Americans without college degrees or those who sacrifice for decades to pay off expensive loans to bail out the rest of debtors is an unfair solution that doesn't solve the problem going forward. Instead,

we should ask the universities that have benefited from student loan programs to foot their share of the debt forgiveness. Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. The flu remains a serious disease.

Last season, over 102,000 influenza cases have been reported across Canada, which is nearly double the historic average of 52,000 cases. What can you do this flu season? Talk to your pharmacist or doctor about getting a flu shot. Consider FluCellVax Quad and help protect yourself from the flu. It's the first cell-based flu vaccine authorized in Canada for ages six months and older, and it may be available for free in your province. Side effects and allergic reactions can occur, and 100% protection

is not guaranteed. Learn more at FluCellVax.ca. Investing in higher education was supposed to make it easier for bright kids from impoverished backgrounds to launch themselves into their American dreams. Instead, 60 years of huge benefits to universities have resulted in a smaller proportion of students from the lower half of the income spectrum on campus, not larger. Universities have used taxpayer generosity instead to become the ideological gatekeepers of the professional class, credentialing an army of cultural revolutionaries who make our country neither wealthier nor wiser, Stettman said. Now that the bill for these decades of degree largesse has come due, it should be dropped firmly at the university door and not at taxpayers.

All right, that is it for what the left and the right are saying, which brings us to my take. So as the kids are saying these days, I think it's probably time for Biden to just take the L. Throughout this debate on student debt relief, I've held four pretty consistent positions. Nothing that has happened recently has changed them significantly. One, student debt relief can be a good economic stimulus. I think there was justification to pause debt repayments during the pandemic when so many people were initially out of work and our economy was sputtering. But at a time when we have high inflation and low unemployment, I don't think student debt relief is a useful macroeconomic tool. Two, targeting student debt relief is a worthy cause. It's true that most student debt is held by the upper and middle class, but lower income Americans hold a significant portion and could

very much benefit from debt relief. Plenty of middle and lower income Americans were duped into predatory loans with insurmountably high interest rates or entered the workforce shortly after the 2008 recession and have been fighting an uphill battle against crushing debt ever since. The good news there is that Biden has already executed targeted student debt relief, $127 billion worth. Three, it seemed obvious to me that Biden did not have the authority to cancel student debt under the HEROES Act, but the question was always whether conservatives would be able to find a plaintiff to challenge the justification. Once they did, I suspected the court would strike it down, and they didn't disappoint. We haven't seen a new plan, but as a very general

rule, I would not expect this court to allow an administrative agency like the Education Department to implement a massive economic policy without the input of Congress. And number four, if Biden were to cancel billions more of student debt for tens of millions of borrowers, that wouldn't do anything for the new generation of borrowers entering the workforce now. Borrowers who also keep taking out absurd amounts of debt as the cost of college continues to go up. In fact, a debt cancellation could make their problems worse. What if the next generation sees this cancellation and assumes they can take out as many loans as possible without worrying about paying them off. The hard reality for the future is that no amount of debt cancellation will matter if we don't actually reduce the cost of college. Many of my friends are buried in student loan debt, and I've heard countless stories about

how relief has or would help them. I don't doubt for a minute that a lot of people would benefit personally from the cancellation, and if that is your only bar for policy, then debt cancellation passes muster. But it gets a lot more complicated when you consider who would pay for the cancellation and whether it would actually help Americans climb out of debt long term, especially students who are taking on the same kind of debt right now. Biden has both lost this battle in court and done a pretty good job of actually getting billions of dollars of debt relief to millions of Americans. I think it's time for him to sell what he's done to the public and move on. All right, that is it for my take, which brings us to your questions answered. This one's from Logan in San Jose, California. Logan said, how is Tangle doing as a business? I don't need the

numbers, but I know there was some hesitancy to add advertisements to the newsletter, and I'm curious how that has panned out. Any sneak peeks as to what is next for Tangle? So the short answer is that things are going really, really well, and I'm happy and proud to share the numbers. In fact, transparency about our business model and what we're building is one of the core tenets of what I set out to do. When I first started Tangle, my goal was for the newsletter to bring in $60,000 a year so I could have a salary and work for myself. This week, after all the attention from our coverage on the Israel-Palestine conflict, we broke the 12,000 paying subscribers threshold and are now bringing in over $600,000 per year in annual recurring revenue from subscriptions. The advertising

business has added about $5,000 per month in revenue, so on the one hand, it is a small part of our business. On the other hand, that's $60,000 a year, which is a salary and what I set out to make for myself when this thing started initially four years ago. It's pretty amazing, and very few people seem to be bothered by the advertisements, so it has gone much more smoothly than I initially feared. As a result of all this, I've been able to invest in Tangle like never before. For the first time ever, I now have a real team. Four employees, my first hire, Magdalena, is now running all of our social media and our advertising business. Ari, who was a part-time editor and contributor for a while, is now our full-time managing editor. We hired John to launch

our YouTube channel and edit podcasts. And most recently, we brought on Will, who does research and editing as well as running all our communications and booking. And of course, we still have part-time editors like my dad, my first editor, Sean, our copy editor, Zosia, who tags in as a podcast editor here and there, and a rotating group of interns. Right now, Daniel is our social media intern. To think we have nine people on this project is frankly pretty incredible. So what's next? Well, first, I want to keep growing our audience. 77,000 newsletter subscribers is amazing, but we're still competing with network news outlets and their millions of viewers. Going forward, we are planning to invest heavily in growing our mailing list, this podcast, and the YouTube channel. I'm planning to introduce our team members to our audience and

give them more face time so it isn't just me. Speaking of which, tomorrow and the rest of the week, I'm traveling. So John, our podcast editor, will be on the mic again, just a heads up. And we're also planning to invest more in some short-term and long-form videos. I want to do more interviews too, and I'm also planning to open the door to large donations as we have received a lot of inbound interest from people who want to support our work with grants and impact funding. Second, we are going to be redesigning our website and announcing a new Sunday newsletter product, which we are very excited about. I can't say more than that right now, but I think we've got some incredible new content ideas in the pipeline, and they are coming soon. Finally, I have no plans to become the next CNN or Fox News. I'm not trying to build a 1,000-person newsroom. When I set out on this journey, I really just

wanted a place to write freely and honestly. I wanted to build something my liberal and conservative friends could trust all under one roof. Today, I'm much more mission-oriented. I've seen the impact of our work and the feedback from readers. And I believe strongly that what we are doing is good for the country and good for people's brains. So I want a small, nimble, tight knit, well-paid team that is fully dedicated to our mission of bringing trust back to the news and getting people out of their bubbles. So in short, a lot to come, but also a lot has happened. In the last year, we've grown to a team of five, launched a YouTube channel, refurbished our podcast, begun a new website redesign, nearly doubled our audience, and held our first ever live event, which was a smashing success, and we are going to do it again

soon. I'm thrilled about where we are and more convinced than ever that our mission is important and people are hungry for this kind of reporting. Finally, I would be remiss not to mention that Tangle members get updates on the business once or twice a year. So if you ever want a consistent behind the scenes look at our business, or you want to unlock Friday editions, or you don't want to see ads, or you just want to support our work, you can become a member by going to readtangle.com forward slash membership. All right, that is it for our reader question, which brings us to our under the radar section. Supreme Court Justice Amy Coney Barrett said on Monday that she favored the idea of an

ethics code for the Supreme Court, adding a Republican appointed justice to the growing chorus of justices who have publicly backed the rules. It would be a good idea for us to do it, particularly so that we can communicate to the public exactly what it is we are doing in a clearer way, she said in an interview at the University of Minnesota Law School. Following stories about Supreme Court Justices Samuel Alito and Clarence Thomas enjoying lavish vacations alongside major Republican donors, there has been increased levels of pressure for the court to adopt an ethics code from the public and especially the left. The New York Times has a story about Amy Coney Barrett's comments and there's a link to it in today's episode description.

All right, next up is our numbers section. The average monthly student loan payment, according to estimates from the Education Data Initiative, is $503. The time it takes the average borrower to repay their student loan debt is 20 years. The interest rate that accrues on an average student loan over 20 years at the average interest rate of 6% is $27,000. The average student loan payment in 2005 was $227, The average student loan payment in 2005 was $227. That's equivalent to $361 when adjusted for inflation. The average student loan payment in 2016 is $393. The percentage of student loan debt in the U.S. that is owed by the federal government is 92%. The remaining amount is owed on private student loans. The total student loan debt in the U.S. in Q1 2008 was $619 billion. In Q1 2023, it was $1.77 trillion.

The number of student loan borrowers who had left school without completing a degree as of 2021 was $40.4 million. All right, that is it for our numbers section. And last but not least, our have a nice day story. Griffith University's Olaf Menke from Coastal and Marine Research Center and manager of the Whales and Climate Program in Australia is an expert in baleen filter feeding whales. According to a new study from Dr. Menke, humpback and other baleen whales in different populations across the northern and southern hemispheres appear to roll around and play with clumps of kelp and seaweed at the water's surface. The research, published in the Journal of Marine Science and Engineering, emphasizes that the behavior can be observed in different individuals in different parts of the world. Though the behavior may also have sanitary benefits, the kelping could indicate an underappreciated playful side of the largest mammals on the planet. Science Direct has the story and there's a link in today's episode description.

All right, everybody, that is it for today's podcast. As always, if you want to support our work, please go to readtangle.com and consider becoming a member. And once again, a quick reminder, I am going to be traveling the rest of this week and through Monday next week on the road. So John is going to be tagging in for Wednesday, Thursday and Monday's podcast. I appreciate if you give him your loyal ears. And you'll hear from me again on Tuesday and us again tomorrow, same time as always. Have a good one. Peace. Our podcast is written by me, Isaac Saul, and edited by John Law. Our script is edited by Ari Weitzman, Bailey Saul, and Sean Brady. The logo for our

podcast was designed by Magdalena Bukova, who's also our social media manager. Music for the podcast was produced by Diet75. For more on Tangle, please go to readtangle.com and check out our website. We'll see you next time. Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. The flu remains a serious disease. Last season, over 102,000 influenza cases have been reported across Canada, which is nearly double the historic average of 52,000 cases. What can you do this flu season? Talk to your pharmacist or doctor about getting a flu shot. Consider FluCellVax Quad and help protect yourself from the flu.

It's the first cell-based flu vaccine authorized in Canada for ages 6 months and older, and it may be available for free in your province. Side effects and allergic reactions can occur, and 100% protection is not guaranteed. Learn more at flucellvax.ca.