Worthy Reads: I Really Wasn't Planning to Talk About Student Debt At All But Here We Are I Guess

Worthy Reads for 29 August 2022

For readers new to De Civitate, Worthy Reads is a feature where I list articles I recently encountered that I think are worth your time, and then I usually provide a little extra commentary. I try to do these once or twice a month, but Dobbs ate May and June, and July was a catch-up month, so we haven’t had one since April.

With the recent death of PredictIt, full access to Worthy Reads has also become De Civitate’s sole remaining reward for paid subscribers. Free readers always get the first half of Worthy Reads, and paid subscribers get both halves.

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“Is There a Christian Case for Biden’s Debt Relief Plan?”, by David French:

…But while I think Christians can disagree in good faith, I see something out of alignment with the biblical precedents for debt forgiveness. The biblical precedents point time and again to debt forgiveness as relief for profound oppression. In his essay on biblical justice, Tim Keller highlights the biblical necessity of both “radical generosity” and “life-changing advocacy for the poor” as both individual and corporate responsibilities of Christians.

I agree. Yet Biden’s program doesn’t meet those requirements. It’s radically generous, yes, but the generosity is backwards. It’s taking from those who have less and giving to those who have more. 

Rather than, say, a discharge of debts in bankruptcy—which relieves debts for the destitute—the decision to forgive student loans benefits America’s wealthiest and most powerful citizens.

Betteridge’s Law of Headlines tells you the column’s answer to the title question is “no,” but French is quite a bit more nuanced than that, and rightly so.

I know I have friends (and, more importantly, subscribers) who are enthusiastic about the Biden student debt plan, and I don’t want to cheese them off, but it seems to me that French is correct. There is nothing wrong with generosity to those in need—if one has the resources to be generous and one is being generous with the neediest before being generous with people who aren’t needy. The current size of the national debt + the inflation rate tells me that the Biden debt relief plan does not meet the first criterion. Moreover, the Biden debt relief plan is going to give $8,328.16 to me (and my dear wife), which tells me that the second criterion is not met, either.

Could me and my wife use the money? Of course. Catholic school tuition don’t pay itself. But our inflation-adjusted household income, objectively, puts us in the top 30% of American households, and in the top 40% in our area. We’re firmly middle-class and moving steadily toward the upper-middle. The money being given to us is being extracted from high-school graduates at the bottom of the pyramid, who will pay for this bit of largesse twice: first through taxes, then through inflation (because throwing $500 billion cash into an already inflating economy tends to create more of it).

Worse: we are getting a refund from the federal government for higher-education opportunities it paid for. Those opportunities, which have now been converted into a free gift, have been worth a lot more to us than $8,328. What are the single moms battling to pay for groceries getting refunded? Why doesn’t the government pay off, say, their medical debt before it tries helping us?¹ I don’t currently “have a cleaning lady,” as the saying goes, but I’m in at an income level where I have had a cleaning lady in occasionally. Should I send her a note thanking her for the $8,328 check she’s gifting me? This is perverse.

In defense of the Biden debt relief plan, I have seen a number of people complain that the loan system is “much less cut-and-dry” than “Boomers” realize, so relief is justified. They argue that certain debtors selected income-based repayment plans (introduced by the Obama Administration in 2009) which allowed them to have much lower monthly debt payments than usual. These debtors have paid those minimums for many years, but, today, they owe more than they did when they started out. For example, this person would have paid $1478.18/mo on her PLUS loans under the “standard” repayment plan. During the early years of the loan, $800 would have gone to interest and $700 to principal, and the loan would have been paid off in exactly ten years. Instead, she opted for an income-based plan that allowed her to pay only $659.40/mo — not enough to make progress on the loan, and the owed amount actually grew.

On the one hand, this does indeed strike one immediately as unfair, even unjust. How can they ever escape the crushing burden of a debt that grows, rather than shrinks, over time?

On the other hand, it is simple math: when you take out a loan at a certain level of interest, you are paying back both the money itself (the principal) and the money the lender lost by generously letting you have the money instead of investing it and accepting the risk that you might not pay it back (the interest). If you don’t pay back the interest in your repayments, you are naturally still on the hook for both interest and principal. The interest on taxpayer student loans is certainly not sufficient to cover the true opportunity cost of the loan, so nobody can complain that they’re “usury”² or that the taxpayer is “profiting” off debtor suffering.

(Also note that, under pre-existing law, people who consistently pay their minimums will nevertheless become eligible for automatic full forgiveness 20-25 years after starting payments, even if they never even started to pay down the principal.)

I think I have less sympathy than French does for 33-year-olds complaining about how income-based repayment plans work, because I’m the same age they are, I went through the same loans process they did, and I know as well as they do that they were warned that income-based repayment could lead to a longer repayment period. All you had to do was pull out a calculator when you were 22, which everyone really should have done given the extremely scary-sounding documents the government had made us sign.

Nevertheless, many people my age fell into precisely this trap, whether because they were too foolish to do their own math, too frazzled or too young or too inexperienced to make good choices about their lives, or genuinely too poor to make the standard payments. They were therefore too easily bamboozled (by… someone? loan servicers? college aid officers? government bureaucrats?) into signing up for an income-based repayment plan that not serve their best interests (or the taxpayers’).

That it is possible to pay for years into an income-based repayment plan and owe more at the end, and that many people have fallen into this trap, strongly suggests that income-based repayment plans are a predatory lending practice. These plans should not be made more lenient, as the Biden plan proposes. They should simply be abolished. Don’t encourage more predatory lending!

That is hardly the only necessary change to the structure of our student loan system that has to be made. There’s plenty more, such as treating student loans the same as other loans in bankruptcy, and putting colleges themselves on the hook for some of the loans. (I know a ton of professors and employees at various schools. Colleges absolutely get bloated off the taxpayer money they can pipe into their coffers on demand, and why wouldn’t they, when they get to stick students with the bill?)

But President Biden conspicuously avoided making even the slightest gesture in the direction of reform. Why? That’s a question voters should be asking, after they get over the fundamental unfairness of this debt forgiveness scheme: even if the forgiveness were good policy, why wouldn’t he couple it with needed reforms to a student loan system that everyone knows is broken?

And don’t you dare answer, “Because the President lacks the power to make systematic reforms without Congress.” That’s true, but the President lacks the power to forgive $500 billion of student loans without Congress, too, and that isn’t stopping Joseph R. Biden!

On that note…

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“The Hidden Authority to Enact Everything Republicans Want,” by Charles C.W. Cooke:

…Naturally, I cannot promise creativity on the scale displayed by the [White House Office of Legal Counsel, which says that Biden’s debt forgiveness plan is legal] — having forgone law school on the grounds of cost, there are limits to my comprehension — but, via a little squinting, some well-developed motivated reasoning, and a near-total lack of respect for America’s constitutional order, I can offer some insights that those of a generous disposition might at least deem adjacent to the OLC’s monumental achievement. Famously, James Madison argued that if the executive branch can’t get his own way, he should trawl through emergency legislation in search of a tenuous pretext, and it is in that spirit that I offer up my own analyses of the law.

First, we have the Antiquities Act of 1906. On the face of it, this law was designed to protect Native American ruins from poachers and private collectors. But, if you dig a little deeper, you’ll find that it enacts a national ban on abortion. At the outset, the Antiquities Act records that “The President may, in the President’s discretion” — which is obviously extremely important, because it confirms that the president can act in this realm without Congress. The law’s plain text cites “objects of historic or scientific interest” — a grouping that includes unborn children, who are very scientifically interesting and, if left unmolested, will eventually become historic — and it is limited in scope to “land owned or controlled by the Federal Government to be national monuments,” which although not a perfect match for “all of America,” should be read in concert with the general-welfare clause to convey plenary power. Taken together, these three provisions clearly empower the executive branch to prohibit the termination of unborn life. Or, as the OLC might put it: “We conclude that the Act grants that authority.”

Cooke has two more examples, both similarly humorous.

We have been on this path for a long while. The inflection point was ten years ago, when President Obama executed and completed a coup d’etat against American immigration law, and succeeded. (I wrote about it at the time.) It continued during the Trump Administration, when the President declared a fake national emergency in order to steal funds appropriated by Congress in order to build a border wall. This was mostly notable for failing: although Trump shared Obama and Biden’s autocratic impulses, he lacked their competence, and we got no border wall out of Trump’s lawlessness. Biden has only expanded this general practice of executive imperialism, starting with his flagrantly illegal eviction moratorium. But, hang on, conservatives, because the eviction moratorium started under Trump, and was just as illegal than as it became under Biden!

Presidents no longer are bound by, or particularly interested in, the law. The next President should simply cross his fingers during the part of the oath about “taking care that the laws be faithfully executed” and then use some insane reading of the Robinson-Patman Act or something to close all opposition newspapers and magazines.³ I can already see the doublethink in Dahlia Lithwick's column at Slate: “The time-honored tradition of crossed fingers communicates a clear meaning: President Buttigieg is not bound by that part of the oath. Although he is still legally President because he did swear the entire oath, the portion of the oath that he crossed his fingers for does not bind him.” Nearly every paper has endorsed either left-wing or right-wing versions of this, so let them be hoisted on their own petard.

Seriously, the only thing stopping this is norms, right? Laws are supposed to say you can’t do this stuff, but they already do, and that hasn’t worked.

Goodness, I’m crabby today. Let’s change gears and talk about lesbian porn.

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