Biden’s student loan forgiveness plan corrects only one problem of unsustainable college debt

President Biden’s decision to forgive up to $20,000 in unpaid college loans has reignited debate over the responsibilities of taxpayers, students and their families to sustain a “learn now, pay later” system that has become for many a path to indentured obligation rather than a portal to expanded opportunity. 

It has also exposed yet another ideological divide in our country over the experience of the haves and have-nots on an education pathway that shifts suddenly after high school from what we as a society value and pay for to what we collectively valorize as an individual investment decision. You’re on your own when you walk off that high school graduation stage, even though we tell you that what you do next will shape a lifetime of earnings, status and respect.

These are important issues to address. And it’s fair to ask whether Biden’s debt forgiveness plan will help to fix the underlying causes of inequities in our higher education system. But I’ve concluded that the arguments against Biden’s plan, often waged by those of my age who enjoyed a debt-free college education, can sound specious and uncaring when compared to the experience of a generation ensnared in a predatory lending model that glamorized benefits and camouflaged costs. 

These observations are based on my own experience. First, as a college graduate who benefited from generous federal and state financial aid. Then, decades later, as a member of Oregon’s higher education board and chair of the state’s Higher Education Coordinating Commission, where we wrestled constantly with the issues of access and affordability.

I was part of the effort to expand the reach of the Oregon Opportunity Grant program and signed on later to support the state’s college completion goals, which committed to getting 80% of our kids across community college and university finish lines by 2025 – a stretch goal from which we now recoil as its deadline approaches.

The trouble with the Opportunity Grant expansion was that it was ill-timed, coming to maturity just when the state budget was decimated by the 2008 recession. The trouble with our 80% college completion goal was that it never took into account the amount of money required not just from taxpayers, but from the hard-pressed working parents and young adults whose contributions would be needed to achieve it. And the larger problem is that these and other programs were forced to chase an accelerating cost curve that far outpaced the growth of state revenues and family incomes.

So, yes, higher education is too expensive. And though loans and grants can make it less so for those deemed financially needy or especially deserving, they can also perpetuate an unsustainable cost model that has to change if we believe our own rhetoric. That rhetoric continues to tout the importance of education after high school. But it has devolved into a marketing pitch for an overly-expensive, campus-based experience, when it should be promoting lower-cost and more accessible options like distance learning and three-year pathways to four-year degrees.

As often happens to interventions that tackle only one piece of a complex problem, we’re hearing many objections to Biden’s plan. Here are three.

Education reformers lament that loan forgiveness will do nothing but delay higher ed’s reckoning with fiscal realities – even though that’s not its purpose; its purpose is relief for those most burdened by a programmatic failure. 

Policy wonks obsess over how much this will benefit an already thriving portion of the middle class – something we don’t worry about when it comes to paying for high school. 

And economists warn of the moral hazard of encouraging students to take on more unaffordable debt – although Biden’s plan restructures the federal loan program to limit its claim on future earnings.

There is a moral issue here. But it’s not moral hazard; it’s moral dissonance. If we can’t recognize the government’s responsibility for the adverse effects of its loan program and do something to change that program, those effects will persist and continue to set back a generation that, unlike that of my contemporaries, is paying for their education long after they graduate. 

Biden’s plan corrects just one of many problems that plague our higher ed system. But this is a problem with individual and societal impacts that we allowed to fester for too long. Biden’s response to this problem is one of those “best next steps” that can help to focus attention on, and boost demand for, a much-needed overhaul of our system of education beyond high school.