By: Charles Hilu
Like most other Americans, I do not stand to gain from President Joe Biden’s student loan debt plan, announced Wednesday. I will graduate with no debt because my parents worked as hard as they possibly could to give me a better life. My mother was the only person in her household to go to college, and, after she graduated, she worked as a nurse to help support our family. My father came from Lebanon in the 1980s with nothing, worked his way through college and medical school, and became a doctor so he could pay off his own loans by himself and provide for my mom and me. They both realized that I would need to attend college to succeed, so they began to save money for me when I was born.
As expected, the plan, which will give $20,000 in debt relief to Pell Grant recipients and $10,000 to anyone else with student loan debt who makes less than $125,000 per year, is both immoral and inflationary. It will help a small, well-off group of people while transferring the beneficiaries’ debt to the majority of the population, who will pay for the plan in both taxes and economic consequences.
Our family’s story is not rare. There are millions of Americans who had the foresight to see the hazard of taking on loads of debt to pay for college and chose either to pursue alternative routes of education or to take on extra work to help with the costs. The parents who took on second jobs for the sake of their children’s education and the children themselves who worked nights in addition to their classes made admirable sacrifices, but Biden’s proposal makes it all for naught.
The plan is an affront to those who thrifted, saved, and worked as much as they could to send themselves or their children to college without any debt. They made the responsible decision not to spend more than they had, and they will become disadvantaged for it.
Those of us who graduate without debt – either because of our parents’ hard work or our own – pay for this plan not only in taxes but also in economic disaster. The day before Biden released his plan, the University of Pennsylvania’s Wharton School released its grim cost estimates for potential versions of Biden’s plan.
The policy that eventually took shape was the cheapest option the researchers at Wharton predicted. Though the school’s estimate does not include the relief for Pell Grant recipients, the $10,000 for those making under $125,000 per year will add almost $330 billion to our deficit by itself. For context, President Biden’s Inflation Reduction Act will reduce the deficit by $305 billion, the Congressional Budget Office estimated.
All Americans will pay the price of the policy with inflation, but the fact that the plan forces people who are not in debt to pay the bills of those who are illustrates its immorality. Plumbers without college degrees, who earn a median salary of just over $56,000, will be forced to shoulder the responsibilities of college graduates who earn more than double their income.
Americans without loans should be lauded for their prudence in their lifestyle. They knew they could not afford college in their present condition, so they chose to learn a trade, worked before or during college to make up the difference, or acknowledged their responsibility to pay back the loans they freely chose to take out.
The lesson from their success is not that they are any better than those who graduated in debt, but that anyone can emulate their hard work. Biden is cheating those who took it upon themselves to pay for the benefits they now enjoy. We should not discount the difficulty that those in debt have incurred, but it is not cruel to demand that they do the same as others who strove to live debt-free.
If Biden is allowed to proceed with his disastrous plan, the government will doubly punish, through both taxation and inflation, the responsibility and sacrifice of countless Americans.
Charles Hilu is the chairman of the University of Michigan’s Young Americans for Freedom chapter.