From the very beginning of the pandemic, we have expected essential workers such as grocery store clerks to grab a mask and get to work. Yet, for some bizarre reason, the federal government decided that relatively well-off college graduates needed a vacation from their student loan payments — at taxpayer expense, of course. The educated class’s vacation from paying their bills continues 18 months later and, thanks to an extension from the Biden administration, isn’t set to end until January 2022.
This is nonsense. While some Americans do indeed continue to struggle amid the pandemic and government restrictions on their livelihoods, college-educated workers are doing just fine. After all, broadly speaking, college graduates are much more likely to work in roles that function remotely, so they were far less likely to get laid off during the pandemic.
You don’t have to take my word for it. As of August 2021, the unemployment rate for college graduates aged 25 and over, the group that holds most student loan debt, was an astonishingly low 2.8%. So, even those who thought there was some justification at the very beginning of the pandemic for this moratorium on student loan payments must acknowledge that college graduates aren’t experiencing economic duress or joblessness. Why, then, should they be off the hook for paying their bills like everyone else?
While the total of $1.6 trillion-plus in outstanding student loan debt owed to the federal government sounds daunting, it’s more manageable than you’d think. Most people’s monthly payments aren’t actually some crushing burden. As of 2017, the median monthly student loan payment was just $222, a significant sum but hardly budget-busting for most college graduates. Despite progressive rhetoric, it’s not a radical or ruinous move for the federal government to ask people to resume paying back taxpayers what they owe.
And this continued vacation from personal responsibility is not without its costs. According to the nonpartisan Committee for a Responsible Federal Budget, federal taxpayers lose $4.3 billion every month the policy remains in place. (Payments are still eventually owed, but revenue is nonetheless lost due to waiving of interest.) That’s money that ultimately will need to be made up elsewhere through higher taxes or more crushing federal debt.
Under this status quo, taxpayers are spending billions on a student loan subsidy that is actually regressive: It overwhelmingly benefits the affluent.
“Not only is the student loan moratorium expensive, it is also regressive,” the CRFB reports. “Like blanket debt cancellation, it benefits those who borrowed more, and those who borrowed more tend to be more highly-educated and have higher incomes. They also are the least likely to have lost their job for an extended period of time during the pandemic. Almost 75 percent of repayment dollars are made by those in the top 40 percent of income earners.” (Emphasis mine).
One simple graphic from the CRFB makes it painfully clear that the people benefiting from the current student loan vacation are mostly high-earners:
The facts here are incontrovertible. When it comes to the student loan moratorium and student debt “cancellation” more broadly, progressives claim their policies offer much-needed relief to the struggling. But, in reality, their schemes force working taxpayers to subsidize a well-off and affluent segment of society that’s more than capable of paying its bills.
We shouldn’t wait until the student loan moratorium expires in January 2022. It’s time to end this insanity — today.
Brad Polumbo (@Brad_Polumbo) is a libertarian-conservative journalist and a Washington Examiner contributor. Subscribe to his YouTube channel or email him at [email protected].
