Student Loan Debt Relief is Self-Interest, and Self-Interest is Politics

the selective demand for selflessness is just another rigged political game

The rationalist community has this concept of the selective demand for rigor. It’s simply the idea that we should be careful about when we expect higher evidentiary standards for some people or about some topic relative to the baseline, as it will always lead us to biased conclusions. I think something similar is happening with the student loan debate happening right now, only here it’s a selective demand for selflessness. The undercurrent of the debate is this perpetual sense that those demanding debt relief are doing so for selfish reasons, and that this somehow violates their left-leaning beliefs. “You say you care about the poor and oppressed, but you’re only in this for yourself!” Which is stupid. All left-wing organizing, going back as far as the left-right metaphor has had any meaning, has entailed appealing to people’s sense of self-interest; what makes us the left is recognizing that our self-interest is shared. Pursuing self-interest is what politics is, including left-wing politics, and as far as self-interest goes asking to be freed from crushing financial burden that feels almost compulsory in our society today seems like a pretty legitimate one.

Rich people, of course, treat politics as nothing else than the expression of their purest self-interest. One of the other controversies roiling the Democratic party is the SALT (State and Local Tax Deduction) issue. The SALT deduction helps those with very expensive property tax burdens pay lower federal taxes. Lifting the cap on those deductions, obviously, would benefit the wealthy. Almost no one pretends this is some sort of matter of progressive principle - Democrats know that the bill is a sop to their wealthy blue state constituents, which they see as a political pay-for. Check out this inspiring quote from Massachusetts House member Richard Neal: “There’s a series of competing views on SALT, but I mean, it’s pretty obvious something has to be in there, that’s for sure.” Something has to be in there, that is, to wet the whistle of the people who hold the purse strings of the party. And yet if you were to peruse my Facebook feed you’d find plenty of people who seem to understand that transaction to be the ordinary dirty work of politics, while seeing student loan debt relief as both unrealistic idealism and cynical selfishness. Tax cuts for the wealthy? Business as usual, even among many Democrats. It’s a funny definition of selfishness operating here.

Is student loan debt the most important issue, from a left-wing perspective? Is forgiving it the most progressive thing we could do? No, on both counts. Yes, it’s true that most of the debt is held by people who are actually doing pretty well financially. (But that most is a far cry from all.) It’s also true that there are all manner of programs that would be better constructed to help the poor. And if for some strange reason we could have student debt relief or food stamps but not both, for sure I’d choose food stamps without a second thought. But we don’t have to make that choice! The fight for a progressive, humane policy agenda is not a fight over which group suffers most deeply but for all of them to recognize that their burdens are intertwined and can only be lifted if we all lift together.

And the case for abolishing student loan debt is strong on its merits. We should cancel student loan debt because, as Ryan Cooper pointed out months back, the government is going to end up eating this money one way or another. We can do an intentional, compassionate forgiveness now, or we can wait for all of these people holding all of this debt to die off without ever having paid what they owe. I’m serious, read that essay - there are untold millions of people who will never have any realistic chance to pay back what they owe even if they’re dedicated to doing so. If the government is going to eat the cost, why on earth would we wait until the debtholder is dead, rather than release them from it now, out of basic compassion? A huge portion of this debt is a write-off, period, end of story. And the fact that it’s more advantageous for political bookkeeping to let it evaporate on death rather than to forgive it just shows the inherent sickness in our system. (A good point to remind everyone that the current access to immense amounts of loan money through the federal student loan system was enacted in part to balance the books for a previous generation of Congress’s stupid budget battles.)

I will also stress this part: we should forgive the debt because doing so is about as simple as policy gets. 90+% of this debt is held by the feds. We can wave a magic wand and make it disappear. That is a very rare condition in politics. I would absolutely love a huge federal commitment to ending poverty, and would be equally thrilled if we spent trillions on it. But I don’t pretend that we could magically make poverty go away with any such program, because that problem is big and complex and diffuse and has defied policy efforts to solve it for generations. With the debt we can just literally erase it, overnight. Nothing is stopping us. And as many have pointed out, you’d suddenly be freeing a lot of people to buy cars and houses and tax vacations, which was once a big part of the basic economic picture - that people graduated from college and into lives with disposable income, which then grew the economy. If you won’t do it for the sake of the debtholders, do it for the realtors, hotels, and the automotive industry. They’re counting on you.

I understand the point about moral hazard. But we should reform the whole college financing system. There should be a far greater commitment to public subsidy for post-high school training (certainly including trade school), especially since per-pupil spending by states has cratered in the past 15 years. Undergraduate student loans should be subject to stricter caps, and the absolute madness of uncapped graduate student loans has to end. Yes, we should partially fill in this gap with more Pell grants and state funding, but we also have to find some way to force colleges to compete on price. With the loan spigot perpetually turned on, schools see little reason at all not to charge high sticker prices for tuition. (Actual total tuition costs are almost always less than a school’s advertised sticker price, for complicated reasons, but tuition is still insanely expensive and assorted fees and costs can be just as bad.) Right now there’s an enrollment crunch and lots of schools are feeling the pinch; acceptance rates at schools that aspire to selectivity, winnowed down after years of internal admin pressure, are creeping back up to fill the gap. But this urge to attract more students hasn’t yet resulted in a price war, which is what we need. But why would it, when there’s so much loan cash floating around the system? Something has to compel these schools to stop hiring more vice deans.

Also: for God’s sake, make student loans dischargeable in bankruptcy again. Bankruptcy sucks. It’s effective enough at discouraging irresponsible borrowing that you don’t have a lot of people serially running up credit card debt and then getting a credit card as soon as their record is clean and then going bankrupt again. Give people some recourse to get out from under that mountain of shame, please.

For the record, I am finally actually paying down my student loan debt in earnest, now that I make more money. I don’t enjoy it, but I’m doing it. I suspect I’ll eventually pay it all down without receiving significant debt relief, though I hope I’m wrong. But if they forgive all the debt the day after I pay mine off, I’ll still drink to the good fortune of those who benefit. I’ve previously quoted Marx, in this space, on how Marxism is not powered by selflessness but rather by an appeal to shared self-interest. I do think that there’s something to be said for the basic principles of charity and goodwill to neighbors as animating leftist commitments. But ultimately I think anyone should understand that we built a system that was hardwired to compel unscrupulous institutions to push large debts onto impressionable young people who are uniquely bad at thinking about the future, and the result is a dysfunctional and inhumane state of affairs that no one would design on purpose, one which creates a major drag on the spending of the young people we used to count on to power the economy. And if the response is to complain that this is the politics of selfishness, my answer would be to ask - as opposed to what, asshole?