Joe Biden Administration cancelling Student Debt. Is it Fair to Cancel Student Debt?

 Joe Biden Administration cancelling Student Debt. Is it Fair to Cancel Student Debt?

Agreed. As a millennial who worked very hard to pay off their student loans, I definitely have mixed feelings about it. College is too expensive and the cost of it needs to be lowered, but it would be a huge slap in the face considering I literally paid my loans off in 2019. To know that if I'd just waited a few more years they would have been erased would be awful. I could have used that money for a down payment on a house, but instead I chose to do the responsible thing and pay what I owed. I work a non-profit job in the bay area. Saving that money up wasn't exactly easy, but it was doable.

As others have pointed out, it is not appropriate to compare slavery to anything else. Comparing it with things like 9–5 work, debt etc greatly diminishes the level of indignity of being physically forced by the threat of violent punishments to work against one’s will. Let’s take another distasteful analogy for example. Say, a person feels displeasure when for various practical reasons (kids, stigma of divorce etc), they have to pretend to love and to continue sleeping with a spouse they don’t really love anymore. It is emotional suffering no doubt. But to say that it is the same level of suffering as the trauma undergone by someone who was violently raped - is deeply disrespectful to the rape victim. Sorry for the horrible analogy. I just wanted to point out how bad the analogy in this answer sounds. 

This, this is what i struggle the most with America’s handling of history: how slavery is still considered either a taboo or a thing of the past, despite its fundamental role in the creation of the nation and its identity. It was a tragedy, but it was also an economical and political system which repercussions continue to this day.

Also, I would hardly say that presenting a similar example is “comparing”. I can’t help but wonder what the real intentions are. Are we paying respect to its victims, or are we simply trying to cut slavery out of the socio-political discourse.

Now, if loan forgiveness is discussed as such without any such guilt trapping analogies, it might be possible to find some common ground. Debt waivers are done periodically in various countries for various reasons. They definitely do run the risk of destabilizing the credit and banking systems. Once it is done once, future loan takers will always defer payments hoping to get a waiver.

But if a government decides that the social costs of the loan burden is too high, it can go ahead and cancel. But when doing so, it must take care not to unfairly punish those who had paid back the loan.

Take 3 students. One of them decided to work extra hours, used her spare time to take another part time job, cut down on her living expenses, delayed buying a car, delayed making other investments for her future and spent all her time and money in closing out her student loan faster.

The second one didn’t quite cut down on her lifestyle. She continued to have a good time attending parties. She kept off the loan repayment for a future date, assuming she will do it when she eventually has to grow up and settle down.

And there is the third one who was also responsible like the first, but in a different way. She had decided to spend time and money to earn more and make some investments first, so she spent her spare time preparing for interviews and she invested her spare earnings in high return investments, maybe even bought a house. But she decided to prolong her loan repayment on the basis of some financial calculations she had made about her own future earning potential.

When loan waiver is announced, only the first student suffers - only because she naively believed that it was her responsibility to repay her debts first before consuming or investing her earnings.

And it is not just an injustice in her past alone. She will continue to suffer in future due to this loan waiver. Repaying the loans had a huge opportunity cost for her. When she was doing that, her competitors who chose to delay the repayment, were availing themselves of various opportunities. She didn’t spend her time on socializing like the second one did. So she lost a good chunk of her dating years and will have to make up for it in the future. She also didn’t invest in her career and wealth like the third one did. But she is in the same dating and job market as them. If there were no loan waiver, then her competitors would eventually have had to stop and repay those loans at some point, during which time she could have progressed ahead and caught up with them. But instead, the loan waiver has ensured that they don’t have to stop to repay anymore and can instead enjoy the head start that both of them got over her. It has unfairly rewarded both of them and punished her - by giving both of them a sum of money (forgiving debt is equivalent to giving that amount in cash ), while denying that same amount to her.

Considering that Americans are still living in a capitalistic system where everyone is supposed to compete, this loan waiver is essentially an unfair advantage given to a subset of competitors in the job market.

If a loan waiver is being given, then it is essential that a corresponding credit also be given in some form - to those who had repaid the loans. For example, if the loan waiver is given to all those students with outstanding loans who joined college after 2010, then a corresponding credit - in the form of tax refund or just plain cash - should be given to the students from the same batches who had paid their loans as well. That is the only fair solution. They were forced to pay their loans because government told them that there will be negative consequences if they didn’t. Now if the govt has decided that there are no such consequences, then it has to recompense the money they paid on the basis of that false threat.

When those students ask for a credit, it is not fair to accuse them of wanting others to suffer. A loan waiver is a cash payout and if it is being given to students, it should be uniformly given to all students from those years since they are all competitors in the market. If instead the government gives cash only to some of their competitors and denies the same to them, they have the right to be angry at that injustice.

(PS: I am not an American. So I might be wrong about the specifics of some mechanisms. I just found the moral arguments in this issue interesting and wanted to share the opportunity cost dimension which was not being discussed much )

Well, the Civil War was a mistake of those who adamantly believed that their rights to own a slave is higher than their commitment to a nation. If owning a slave is their reasoning to do such a thing, should we cry them a river?

And you don’t think the Civil War was expensive? It’s probably more expensive since it’s not only paid in dollars, but also in blood.

It’s known that debt prevents people from unlocking their full economic potential as that’s more expense for the average student/would-be worker to cover. Just like how slavery is also limiting the economic and personal freedoms of individuals. Not having debt is a good idea.

This, this is what i struggle the most with America’s handling of history: how slavery is still considered either a taboo or a thing of the past, despite its fundamental role in the creation of the nation and its identity. It was a tragedy, but it was also an economical and political system which repercussions continue to this day.

Also, I would hardly say that presenting a similar example is “comparing”. I can’t help but wonder what the real intentions are. Are we paying respect to its victims, or are we simply trying to cut slavery out of the socio-political discourse?

Oh, wait. It’s not 1863 is it. My mistake.

But, truthfully, you would not believe the cost of freeing the slaves was. There were roughly 4 million slaves in the United States in 1864. A really crappy one would be worth as much as a car. A really good one might be worth as much as a house.

So, someone luckily did the math

Their estimate - freeing all the slaves had an economic impact equivalent to somewhere between 6–12 trillion dollars in today’s money.

If you were a southern slaveholders, a single slave could be worth more than the rest of your property put together. I mean, imagine if Wal-Mart didn’t have to pay any of their employees and they all had to work for them from the time they were 16 until they were 65.

And, yes, there will be an immediate cost to eliminating all that debt.

But, on the other hand, that debt is turning many students into what are, in effect, debt slaves. Take a look at this former student loan debtor.

He graduated law school and got a job in biglaw, which probably paid him over $100,000 a year. That wasn’t enough to pay off his student debt. In fact, he didn’t pay off his debt until he became a best-selling author.

“But Steve” you say “What about all those people who worked hard to pay off their student debt”

Well, I’m sure some of them will complain bitterly. However, back in 1865, very few ex-slaves that had literally paid for their freedom complained other blacks got their freedom for free.

Especially this guy

Frederick Douglass was born a slave, was educated on the sly (it was illegal to educate slaves), escaped and to prevent being sent back, his friends literally bought his freedom. Not everyone should have to go through that.

Picture Source Google

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