Tangle - Forgiving student debt.

Episode Date: May 2, 2022

President Joe Biden is reportedly nearing a decision on how to handle forgiving student debt for borrowers, a policy he ran on in the 2020 election. Plus, a listener question about a new law in California, and an extension of our pod listeners only membership offer!You can read today's podcast here.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 produced by Trevor Eichhorn. 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+. From executive producer Isaac Saul, this is Tangle. Good morning, good afternoon, and good evening, and welcome to the Tangle Podcast, a place where you get views from across the political spectrum, some independent thinking, without all that hysterical nonsense you find everywhere else. I am your very sick host, Isaac Saul. I am battling through a cold, you know, the classic man cold. I feel like I'm dying, but I just have the common cold. So I apologize. I know I sound awful, but I also can't really take a day off. So here I am recording, trying to get through it. And Trevor will be sure to edit out all of me sneezing and blowing my nose

and getting all sick all over my microphone. Anyway, before we jump in, first off, I just want to follow up. On Thursday, we had a special offer we launched for Tangle podcast listeners. About 20 people claimed the offer, and I got a few other emails from people asking us to extend it. So I have turned the offer back on readtangle.com slash podcast. If you are a podcast listener, you're the only person who knows about this. You can go to readtangle.com slash podcast and get 20% off our yearly subscription right now. I'm going to let it run until tomorrow morning because I know a lot of people listen to this podcast on their way home from work on Monday. 20% off. It's ending tomorrow. I have to end it at some point,

so it's ending tomorrow. But this is the best way to support our podcast, our newsletter, our website. That money, that subscription goes directly towards hiring people for the podcast, our newsletter, our website. That money, that subscription goes directly towards hiring people for the podcast, hiring social media editors, hiring interns. It helps me. It is just, yeah, it's the only way to really throw your support behind us in a financial way besides maybe donating on Anchor, becoming an Anchor supporter, which I know many of you have done. But if you want to subscribe, you can go do that right now. Get 20% off readtangle.com slash podcast. All right, let's jump in with our quick hits for the day. First up, House Speaker Nancy Pelosi met with Ukraine's President

Volodymyr Zelensky, becoming the highest-ranking American to visit Ukraine since the start of the war. Number two, President Biden's approval rating is still underwater, but ticked up slightly in the latest Washington Post-ABC News poll. Number three, Arkansas Governor Asa Hutchinson said he is considering a run for president regardless of whether former President Donald Trump jumps into the race or not. Number four, the Nasdaq fell 13.3% in April, the worst month since October of 2008. The S&P 500 fell 8.8% its worst month since March of 2020.

Number five, more than a dozen states will hold primary elections this month as the 2022 midterm season kicks off. There is a ticking time bomb looming over the American economy. Nearly $2 trillion in student loans owed by 50 million borrowers. Americans now owe more in student loans than they owe in car loans and credit cards. And it falls disproportionately on the poor and non-white. President Biden is reportedly considering his options in canceling student loan debt. That's right. He made broad comments on the topic during a meeting Monday with members of the Congressional Hispanic Caucus. Those who attended the meeting say Mr. Biden was open to hearing about loan forgiveness for students from both public and private institutions. Secondly, I am considering dealing with some debt reduction.

some debt reduction. I am not considering $50,000 debt reduction, but I'm in the process of taking a hard look at whether or not there will be additional debt forgiveness. And I'll have an answer on that in the next couple of weeks. President Joe Biden is reportedly nearing a decision on how to handle forgiving student debt for borrowers, a policy he ran on in the 2020 election. Since taking office, Biden has repeatedly extended the COVID-era moratorium on student debt for borrowers, a policy he ran on in the 2020 election. Since taking office, Biden has repeatedly extended the COVID-era moratorium on student debt payments, but now his administration says it is making a decision on a permanent fix for student debt. According to the Washington Post, the administration is considering various ways to forgive some student loan debt through executive action. In recent weeks, senior Biden aides have examined

limiting the relief to people who earn less than either $125,000 or $150,000 as individual filers in the previous year. The plan would set the threshold at around $250,000 or $300,000 for couples who file their taxes jointly, the people said. No final decisions have been made and the people familiar with the matter stressed that the planning was fluid and subject to change. Last week, Biden told reporters that he would forgive less than $50,000 of debt per student and in conversations with other Democrats has said the administration is looking at cutting at least $10,000 of debt per qualifying borrower. That plan, along with the threshold for borrowers earning less than

$125,000 or $150,000 per year, is a similar plan to the one he campaigned on. The administration is also considering a plan that would only forgive debt for undergraduate degrees rather than including borrowers who went to graduate school. For now, the plan remains unclear and the administration's path forward looks to be fluid, though Biden has said he hopes to have a final decision in the next couple of weeks. Unlike many other policy priorities, though, Biden could make significant headway on student loans with executive action alone. Today, about one in eight Americans has student debt. Americans owe nearly $1.6 trillion in student loan debt held by approximately 43 million borrowers.

Along with the continued pause on payments, the Biden administration says it has discharged or is in the process of discharging $17 billion in student debt covering more than 700,000 borrowers, which includes over $5 billion of debt for more than 300,000 borrowers with disabilities that has been forgiven. Of the people who attend four-year college, the average student loan debt upon graduating in 2018 was about $29,000. Tuition at public four-year colleges increased 36% between 2008 and 2018. According to the Washington Post, as of 2019, 97% of all student debt was held by people earning below the thresholds the Biden administration is considering, $150,000 per single person or $300,000 per couple. The Committee for a Responsible Federal Budget

says it would cost about $245 billion to cancel $10,000 of loans for every student borrower. billion to cancel $10,000 of loans for every student borrower. Only 6% of borrowers in America owe more than $100,000 in debt, but they account for about one-third of all student debt in the U.S. 54% of borrowers owe $20,000 or less. Before the pandemic moratorium, the average monthly payment on these loans was $300. The poorest 20% of Americans, when measured by income alone, hold just 8% of all student debt. Almost a third is owed by the wealthiest 20% of households. You can find previous coverage of our student loan forgiveness in today's newsletter, along with our review of Biden's first year, where we touched on how he handled student loan forgiveness. And you can also find my opinion piece I published in Tangle a few months ago, where I argued that forgiving

student loan debt would help his approval rating. In a moment, you'll hear some arguments from the left and the right about how to handle student loan debt, and then my take. Hey everyone, it's Isaac here. So as I mentioned not long ago, we are trying to start experimenting with ads on the podcast. And in order to do that, we are choosing things that we like here at Tangle. We're choosing real, genuine recommendations here at Tangle as our advertisement partners. And we want to start off with a great new podcast called Let's Find Common Ground. This podcast is built in the ethos of Tangle. It is a space where you'll hear remarkable, innovative people who are working to bridge differences and reach an understanding with those who see the world a little differently than they do. You'll hear from politicians, scholars, activists, journalists, and just everyday people sharing personal stories about

finding common ground on race, the environment, criminal justice reform, and many other controversial topics. New podcast episodes are released every two weeks, and you can join hosts Richard Davies and Ashley Milne-Tight for Let's Find Common Ground. You can find episodes at commongroundcommittee.org slash podcast or wherever you get your podcasts. That's commongroundcommittee.org slash podcast or wherever you get your podcasts. That's commongroundcommittee.org slash podcast. First up, we'll start with what the left is saying. The left mostly supports some student forgiveness, though they disagree on how much. Some argue Biden cannot wait any longer. Others say it is a bad idea, both politically and

economically. In MSNBC, Hayes Brown said Biden can't wait any longer. The confusion of debt holders about what is going to happen, how much we will have to pay back and when, has become a potential political liability for the Democrats, Brown writes. More importantly, it's caused an untenable state of limbo. Should we be paying down our debts now when the interest rate is still frozen and our payments can go directly to the remaining balance? Or do we wait until the moratorium is over, holding on to the cash the pause has freed up, even as prices rise thanks to inflation? Last year, the White House said it had ordered the Departments of Justice and Education to review whether Biden has the power to delete federal student loan debt. We haven't heard how that

review has gone, even though Democrats in Congress have pushed Biden to act. The White House may be planning to wait closer to August to announce a debt cancellation to better give Democrats a needed boost heading into the midterms, Brown said. But for now, there's a clear information gap as the administration figures out its game plan, which can only feed into the perception among 18 to 34-year-olds especially that the Biden presidency hasn't benefited them. Meanwhile, a new poll from the Harvard Kennedy School Institute of Politics found that the vast majority of 18 to 29-year-olds surveyed, 85%, wanted at least some government help with student loans. A majority of those wanted student loans canceled for at least

some people, with 38% in favor of canceling all federal student loan debt. In the Philadelphia Inquirer, Will Bunch said, It's unfortunate that the fate of this initiative may be decided by the increasingly right-wing, Trump-fried federal judiciary, because forgiving these debts on a massive scale, and probably totally, is the right thing to do from a moral standpoint. and probably totally is the right thing to do from a moral standpoint. A whopping 45 million Americans hold college debt right now, and every one of them has a different story of some sort. What most folks don't realize is how many of these loan recipients,

nearly 40% according to the best research, weren't able to earn a degree and ended up in the worst of both worlds, struggling to get a good enough job to meet their monthly payments, Bunch wrote. The Biden administration hopes the $10,000 number would particularly help this category. The young people who were given loans but not any help in dealing with the many other hassles middle-class kids face in finishing college are just one piece of the moral argument for loan forgiveness, which in my mind matters more than any economic argument. In one way or another, almost every American who went off to college since the mid-80s was sold a bill of goods. For some, this scheme was blatant, as lower-income kids desperate to climb the ladder were targeted by scammy for-profit universities

that used boiler room recruitment tactics and steered students to max out on loans in a system in which the schools got all of the dollars from Washington, while these young people taught underwhelming career skills were on the hook, assuming they even graduated, Bunch said. But even kids who went to reputable public or private universities have been cheated. That's because conservative state lawmakers pulled the plug on college as a public good and slash funding for higher education at the exact time that rapid changes in the economy made a college degree practically the only valid passport for staying in the middle class and at the same time that

colleges fought to woo students with expensive prestige branding rather than any effort to keep tuition low. The Washington Post editorial board said Biden should resist canceling student debt. A broad cancellation would offer huge undeserved benefits to doctors, lawyers, and others who do not need taxpayers to foot the bill for their valuable educations, the editorial board said. The vast number of American taxpayers lacking university degrees would subsidize well-heeled, white-collar professionals. And it would be expensive. Simply extending the pandemic-era pause on student loan payments for four more months,

which the Biden administration did this month, will cost some $20 billion. That could finance massive numbers of Pell grants for poor students. Canceling student debt has become a trendy cause in left-wing circles in part because, advocates insist, Congress delegated so much power over student loans to the executive branch that the president could make this massive change with the stroke of a pen, they wrote. Mr. Biden should continue to resist these irresponsible demands, even as his administration looks for ways to offer more targeted relief. Congress, meanwhile, should make clear that high-income borrowers need no more federal help and instead put the money into university finance programs tailored to aid the needy. All right, that is it for what the left is saying,

which brings us to what the right is saying. 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+. how Democrats sold their student loan takeover as a money saver, now millions of borrowers can't or don't want to repay their loans, so President Biden says he may cancel their debt, the board said. The taxpayers who repaid their loans or didn't go to college will pay instead. The administration has repeatedly extended what was supposed to be a temporary pause on student loan payments and

interest accrual. This reprieve has cost the government $100 billion and counting, money that Congress hasn't appropriated. Now Democrats want Mr. Biden to compound the damage to taxpayers and the Constitution by writing off loans by presidential fiat. Most borrowers don't need debt relief, but Democrats are hoping to buy themselves political relief before the midterm elections. Young people have soured on President Biden, and Democrats worry they will be as motivated to vote this November as they were to attend a 9 a.m. class. Democrats plan to bribe them to the polls, the board said. Federal student loans were established as part of the Great Society to help low-income students. Yet, step by step, Democrats have turned

student loans into an entitlement for academia and the affluent. Rather than make college free on the front end, which might have failed to pass Congress, they want to waive the costs at the back end. Kristen Tate called it welfare for the middle and upper classes. Contrary to the picture painted by left-wingers of greedy banksters taking advantage of impressionable young students, 92% of student loan debt is held by the federal government, not by private banks. Most of these loans offer an interest amnesty until after graduation. Furthermore, the richest 40% of the American public holds 60% of student loan debt, while the bottom 40% holds just 20% of the debt, Tate wrote. By 2019, over half of student loan debt was held by those with master's or doctorate degrees.

In other words, those who are typically in the best financial position to pay off their loans are the ones benefiting from the successive student loan repayment pauses. The student loan pauses have cost taxpayers $120 billion so far, and the latest one will tack on another $17 billion. If student loan debt were fully forgiven, there would be an almost $2 trillion bailout. The best way to make college affordable is to get the federal government out of the college business. The feds fund most of the student aid, and most college students can qualify for as much money as they need to cover the cost of tuition, regardless of the price tag or personal credit history. These taxpayer-funded loans are given out with artificially set interest rates and with zero regard for the earning potential of secondary education. This system allows colleges

to hike tuition each year with impunity because no matter what they charge students can finance it with government money. Jim Garrity called it Biden's plan to punish the responsible. President Biden is on the verge of rewriting a long-standing social contract by deciding that taxpayers should repay significant portions of student debt instead of the borrowers who took out those loans and received the education, Garrity wrote. The biggest beneficiaries would be white Americans under the age of 40 who have graduate degrees and live in high-income majority white neighborhoods, in other words, extremely online Democrats. white neighborhoods, in other words, extremely online Democrats. Biden's Hail Mary pass for the coming midterms is a massive wealth transfer from taxpayers to the Democratic Party's activist class, and that will exasperate the already bad inflation crisis. If you take out a loan to buy a house,

you must pay it back over time with interest. If you take out a loan to buy a car, you must pay it back over time with interest. If you take out a loan to pay for a college education, you must pay it back over time with interest. You signed a contract. You knew the terms going in, or at least you were supposed to know them. You're supposed to read the documents you signed, Garrity wrote. You knew the payments you were going to have to make and when you would have to make them. If you don't want to deal with the financial pressures of debt, don't take out the loan. Joe Biden is on the verge of crossing out that part of the social contract with a red pen and declaring that taxpayers will pay back those debts instead, or at least a significant chunk of them for his preferred demographics. Alright, that is it for what the left and the right are saying, which brings us to my take.

So I could probably write three or four newsletters on this issue, and I may end up having to. But for now, I'll try to hit on the basics. First, let me call out the weakest arguments against doing this. Quote, it's welfare for the middle class, end quote. Welfare is a word people use when they don't like where their tax dollars are going. Progressives deride corporate welfare and conservatives deride the welfare state. But the truth is the government gives some money and a variety of tax breaks to basically everyone. Democratic-led states are less federally dependent than Republican-led states. America's farmers get billions of dollars of taxpayer welfare and nobody bats an eye.

Calling something welfare doesn't make it bad. The question should be, does it help Americans? Is it good for the economy? Is there a moral case for the policy? Another argument is, I paid my debt off, so you should too. I'm certainly sympathetic to this argument. I spent my first few years out of college living a low-budget lifestyle to pay off my student debt. I also got an assist from my parents, who had to do their own budgeting to help pay down my college degree.

My wife and I are about to uproot our lives and change cities so she can attend a graduate school where she got a scholarship. Certainly, some people who have their loans forgiven will be lazy or rich or both, and in a vacuum, they may be less deserving than others who had to pay down their debt. But good policy doesn't have to help all people to help many people. And again, this is a policy question. Forgiving loans, for instance, could have a positive impact on the economy, which would benefit the country as a whole, not just these individual borrowers. Biden is bribing voters is another common argument. Look, Biden ran on canceling student debt. In fact, the plan he ran on is basically identical to the one he's floating now. When former President Trump did exactly what he said he'd do as a candidate, it was celebrated by his supporters. Why shouldn't Biden also be celebrated for following through on his campaign promises? He got elected, the proposal is wildly popular with

the people who voted for him, and now he's trying to execute it. Is the pre-midterm timing conspicuous? Sure. But he's had plenty of other issues to deal with until now. Plus, there's nothing wrong with doing what you said you were going to do and pushing through a policy that's popular with the people who elected you. Frankly, that's just democracy in action. The glaring issue to me is not that this proposal will benefit a lot of middle or upper class people, which it will, but that it doesn't solve the actual root cause of the student debt crisis and is a huge risk at a time when inflation is already running sky high. If Biden is going to forgive, say, $10,000 worth of student loans, the plan should come with a proposal to reform the system that created all this debt. Otherwise, colleges are going to keep jacking up their prices

and students may think that taking out loans is even less serious than they thought it was 20 years ago, figuring that eventually their debt will be forgiven anyway. Americans aren't just taking on debt to get to college, they're taking it on to own homes or buy cars or feed their families. Overcoming subprime mortgages, predatory lending, and exorbitant student loans is the path to today's middle class. As Nicole Hemmer aptly put it,

debt is how the U.S. has chosen to deal with inequality. Until that changes, forgiving loans every 20 years is only going to start the same cycle over again. As for inflation, the Committee for a Responsible Federal Budget estimates a full cancellation would increase the inflation rate by 0.1 to 0.5 percent. Full forgiveness seems unlikely, and that rate bump isn't huge, but at a time when we are already in such a precarious spot, the risk should not be ignored. The solution, of course, would be to push through a comprehensive piece of legislation delivered to targeted relief and also reform the loan system or help fund cheaper and more

accessible public universities. Americans seem to be getting wise to the diminishing returns of a four-year college degree, but that won't stop the next generation from burying themselves in debt in the hope for a middle-class life. I could get on board with some debt forgiveness, but in this economic moment, and with so little else on the docket to address the problem, it's hard to see how it ends well. That's it for my take. That brings us to your questions answered. This one is from Laura in Cedar Rapids, Iowa. She said, I heard California passed a new abortion law that the child can be aborted up to 28 days after birth. Is that accurate? Isn't that legalizing murder or euthanasia? Okay, Laura, so this is one of those stories that immediately failed my sniff test. If a state were

legalizing a law that allowed newborn babies to be murdered, it'd be the number one story in America and probably the world. The truth is that California recently passed a bill that does away with mandatory investigations of stillbirths because in many states, stillbirth investigations occur anytime a woman has a stillbirth in a hospital. Healthcare providers and institutions can report people for spontaneous pregnancy losses. Then women and families who are often grieving are subjected to having cruel and unnecessary investigations. However, the confusion is in part the fault of the legislators in this case.

An original draft of the bill said, Notwithstanding any other law, a person shall not be subject to civil or criminal liability or penalty or otherwise deprived of their rights based on their actions or omissions with respect to their pregnancy or actual potential or alleged pregnancy outcome, including miscarriage, stillbirth or abortion or perinatal death. But perinatal death includes fetal death and death days or weeks after a child is born. Analysts of the bill made a note of this. They called the legislator out on it and then the legislators changed the draft once they realized the mistake they had made. Anyway, the point of the bill was to ensure parents aren't

criminalized for a failed pregnancy except in the most extreme cases. The idea that any judge would allow infanticide or any legislator would try to make infanticide illegal is the worst kind of nonsense. I don't always endorse these websites, but I thought factcheck.org did a good breakdown of the confusion over this bill. There is a link to it in today's newsletter. Alright, next up is our story that matters for the day. Families across the country are struggling as a baby formula shortage continues to worsen. Pandemic-induced supply chain issues and product recalls have sent the price of baby formula skyrocketing.

One mom in Connecticut said she bought a pack of baby formula for $238 on eBay before shipping that usually goes for $130 at a wholesale store. Meanwhile, major drugstores like CVS and Walgreens are limiting the amount of formula parents can buy in one visit. Axios has the story. There's a link to it in today's newsletter. Next up is our numbers section. The increase in the cost of college between 1980 and 2019 was 169%. The increase in earnings for workers between the ages of 22 and 27 during that same time period was just 19%. Today, the median earnings for young adults with a college degree is $45,000.

The median earnings for young adults without a college degree is $30,000. for young adults without a college degree is $30,000. The average cost for in-state students at a public four-year university today is $10,740. The average cost of college for students at a private four-year university is $38,070. All right, last but not least, our have a nice day story. This one is about California, which is building the world's largest wildlife crossing. Spanning 10 lanes of Highway 101, the construction is aimed at making life safer for mountain lions and other animals living in the Santa Monica Mountains. The $87 million crossing will be 165 feet wide and provide a way to connect the mountains to the Simi Hills, 10 miles above the freeway. The crossing will be surrounded by sound barriers, trees, and bushes to encourage the animals to enter. The goal is to bring back genetic diversity to many species that have been isolated from the

rest of the state due to the highways and are thus at risk of extinction. CBS News has the story. There's a link to it in today's newsletter. there's a link to it in today's newsletter. All right, everybody, I'm sick as a dog and I need to get out of here and go home and rest. So I'm wrapping up. Don't forget, readtangle.com slash podcast. You got 24 hours to go claim your special offer for podcast listeners, 20% off our subscription. First time we've ever done this. Probably won't do it again for a long time. Definitely won't, actually. So, you know, go claim it. All right, everybody. See you tomorrow. Peace. Our newsletter is written by Isaac Saul, edited by Bailey Saul, Sean Brady, Ari Weitzman,

and produced in conjunction with Tangle's social media manager, Magdalena Bokova, who also helped create our logo. The podcast is edited by Trevor Eichhorn and music for the podcast was produced by Diet 75. For more from Tangle, subscribe to our newsletter or check out our content archives at www.readtangle.com. So based on Charles Yu's award-winning book, Interior chinatown follows the story of willis woo 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 plus