“Nobody’s telling the person who is trying to set up the lawn service business that he doesn’t have to pay his loan,” said U.S. Supreme Court Chief Justice John Roberts during oral arguments about President Joe Biden’s student debt forgiveness plan. Roberts continued his logic on behalf of this hypothetical lawn service operator, saying, “he still does, even though his tax dollars are going to support the forgiveness of the loan for… the college graduate, who’s now going to make a lot more than him over the course of his lifetime.”
It’s remarkable how concerned Roberts and other conservatives have been about the exploitation of the average American when it comes to loan forgiveness. The Supreme Court’s chief imagines that college graduates will go on to make enough money to pay back their loans and they are choosing not to—apparently in order to take advantage of business owners like lawn care operators.
Does Roberts not think the lawn business operator may be college educated and have student debt? Or that perhaps a college graduate might like to open a business but is financially stuck paying off huge loans?
Associate Justice Ketanji Brown Jackson, the newest member of the court and the first Black woman in the nation’s history to be appointed, had a very different take. She rightly asked, “I’m wondering whether or not the same fairness issue would arise with respect to any federal benefit program.”
Indeed, why is it fair for only people over the age of 65 (and a few other categories of people such as veterans and very low-income people) to qualify for government-funded health care? Those who don’t qualify for such government programs pay for others’ benefits via our taxes because that’s the point of taxes—to pool together a cut of everyone’s personal income and help pay for the things that make society better, fairer, more livable.
But it’s this very point that conservatives see as anathema to their grim worldview, the one that Ayn Rand brought to life in her (unintentionally) dystopian novels.
Justice Jackson continued her thought process, saying, “I just don’t know how far we can go with this notion of, to the extent that the government is providing much-needed assistance to people in an emergency, it’s going to be unfair to those who don’t get the same benefit.”
Indeed, student debtors are in trouble precisely because they didn’t get the same government benefits compared to their predecessors. According to Business Insider, “From fall 1973 to spring 1977, boomers paid around $39,780 in today’s dollars for four years of public college. That’s a little more than half the cost for millennials attending public college from fall 2006 to spring 2010: $70,000. And what Gen Z is paying today is more than double that: $90,875.” This is directly the result of the federal and state governments paying less toward the cost of higher education and shifting more of the cost of college to individuals.
If Roberts’s hypothetical lawn care business owner hails from the baby boomer generation, then the question of fairness is turned on its head: Why should older generations have benefited from tax-subsidized college education (thereby helping them avoid debt), when younger generations have not had the same advantage?
If the Rand-ians could travel back decades in time to rectify this, they certainly would roll back all government benefits aimed at middle- and working-class boomers.
If Biden could go back a few months in time, he would have done better to be more aggressive in his approach to debt relief. In August 2022, after dragging his feet for years to make good on his campaign promise, the president invoked emergency powers in light of the COVID-19 pandemic—a weak basis—for justifying debt cancellation.
Debt experts like Harvard Law School’s Eileen Connor make a persuasive case that Congress has given the secretary of education the authority to make—or waive—college loans. In other words, with the stroke of a pen, Education Secretary Miguel Cardona could forgive all student debt. According to Connor, he would have the legal right to do this under the 1965 Higher Education Act signed by President Lyndon B. Johnson.
Instead of using the 1965 law as the legal basis for his actions, Biden chose the 2003 HEROES Act, saying that he had the authority to pause student loan repayment because of the emergency conditions created by the COVID-19 pandemic. Dalié Jiménez, a law professor at the University of California, Irvine, called this an “unsurprising compromise,” and added that “[t]ime will tell if it was the right thing” to do.
Time will indeed tell. Emergencies are, by definition, temporary. In August 2022, Biden used the pandemic to make his case for debt cancellation. Then, in September, he declared the pandemic over. He ran out his own clock.
Nebraska’s Republican attorney general, Mike Hilgers, pointed out in a Wall Street Journal op-ed that, “The president can’t have it both ways. He can’t tell the country the pandemic is over while claiming that it justifies this unilateral action.”
As I explained in an analysis last year when the president first announced his plan, it was a paltry gesture that could have gone so much further. Given that Biden would face the same stiff opposition whether he forgave $10,000 or $100,000, he should have aimed higher and been more aggressive. Instead, his actions indicate that he too may be unswayed by the unfairness of student loan burdens.
Conservatives are also predictably touting the high cost of debt relief—“We’re talking about half a trillion dollars and 43 million Americans,” reminded Justice Roberts during the Feb. 28 oral arguments. Lawmakers, including most of the liberal ones, rarely balk at the much, much higher annual cost of funding the Defense Department.
Unlike the cost of maintaining a perpetual war machine, Biden’s (far too modest) debt relief can impact the lives of 43 million living, breathing human beings. One debtor, 26-year-old Ella Azoulay, told Associated Press that her 2018 degree from New York University has left her with $40,000 of debt. Her father is even worse off, having taken out more than $400,000 in loans to educate his three children. For many borrowers, Biden’s plan would eliminate just a fraction of their debt.
What does $10,000 to $20,000 in debt forgiveness mean for an individual? For those people whose repayment plans were paused during the pandemic, a CNBC survey found that resuming payments would impact their ability to pay off other loans, as well as save for retirement or buy a home. A small minority said it would impact their decisions to get married or have a child. So, we’re talking about serious life decisions.
Ayn Rand, near the end of her life, benefitted from the same welfare system she railed against. Government benefits are easy to dismiss and denounce—until you need them.
Meanwhile, what does $10,000 to $20,000 mean for the wealthiest Americans? So little that it would not even cover the price tag of this $32,500 Hermes handbag. According to the Financial Times, the market for luxury goods is booming. Further, “wealthy people have more time in which to spend their money, since they now live roughly a decade longer than their low-income counterparts, thanks to better health care, diet, nutrition and rest.”
There you have it. If fairness is the basis for deciding whether or not to forgive student loans, conservatives would do well to examine such disparities.