Saturday, April 30, 2022

I have more student loan debt now than when I graduated in 2003, and I'm not sure canceling student loan debt is good policy

I grew up a stone's throw from the Pro Football Hall of Fame, so it was kind of foreordained I would at least try to play high school football. It went okay my freshman year; I started both ways on the 9th grade team, and it seemed reasonable that I'd progress over the next few years to play junior varsity and then get playing time on the big stage as a senior. But my sophomore year threw a wrench into all of that. 

Sophomores rarely logged playing time on the varsity team, but they did practice with the varsity squad. We were the "scout team," mainly there to help the varsity team practice by getting beat on. There were also hazing rituals for sophomores. One involved running at a wall of upper classmen who would then flip you over when you got to them. While you were in the air, other players, who had been perched on top of a blocking chute, would jump off the chute and hit you in mid-air. We didn't dare question it, but some upper classmen offered a justification of it anyway. "We had to do it when we were sophomores" was what they usually said.  

As apologias go, that's not a great one. Would an ex-slave oppose the abolition of slavery because he'd had to go through slavery? The previous existence of a pernicious practice is never a reason to continue the practice. I made it through that sophomore year, mostly because I didn't want anyone to think I had quit because I just couldn't take it, but I refused to play as an upper classman. There was no way I was going to keep playing for a team like that after I knew what they did. 

The comparison many people are making to student loan debt is not good 


I doubt I have to argue long to convince most people that the kind of logic the upper classmen produced is faulty. "I had to, so you do, too" is not just a logical fallacy, it envy incarnate. It's evil.  

I'm not sure, though, that the ubiquitous argument in favor of cancelling student loan debt, one that compares a common argument against cancelling the debt to an "I had to, so you do, too" fallacy, is sound. 

I've seen this argument cropping up all over. Here's a Tweet I saw this week that captures the basic point people are trying to make:




Hahahaha. Yes, I get jokes. 

In any sort of metaphorical juxtaposition of two things, there is the original image, the new image, and something those two images have in common the metaphor wants to highlight. In technical terms, these are the vehicle (original thing), tenor (new thing being compared to original thing), and the ground (thing they have in common). In the sentence "Achilles is a Lion," the lion is the vehicle, Achilles is the tenor, and bravery or strength is the ground. 

What are the vehicle, tenor, and ground in a Tweet like the one above? Something like this:

Vehicle: A terrible person who resents people who haven't had to suffer the same things he has.
Tenor: A person who paid all their student loans and is now angry that others might get their loans forgiven.
Ground: Both of these people are uncharitable and jealous. They resent any good thing that happens to someone else if it didn't happen to them, and want any bad thing that happened to them to happen to everyone. They're haters.  

Does this metaphor hold? I'm not sure it does. Cancer is an unmitigated evil. There is no upside to cancer, ever, unless maybe if Hitler gets it. But taking out a loan for a desired good or service, then paying off that loan in a timely manner, might be good or bad. Yes, you can make an argument that society should provide all the education citizens need to become productive for free. I'm open to that argument. But our society has never done this. We've left it up to people to decide for themselves if the cost of a higher education was worth it. That might be a bad way to run a society, but at least we've all been living under the same rules. Given those rules, the existence of student loans was either a qualified evil or a qualified good, not an unmitigated evil like cancer. 

Moreover, paying off one's loans isn't like beating cancer. While there are certain things one can do to help beat cancer, one certainly has more control over paying off loans than whether your particular cancer is going to be one that treatment can beat. Yes, people have things beyond their control that keep them in debt and yes, capitalism can be cruel. But overall, there are more things you can do to take control of your debt than there are things you can do to beat cancer. That means there's more personal responsibility involved. It's not your fault if you succumb to cancer. It might partly be your fault if you get in over your head in debt. 

A bigger reason the comparison doesn't wash


For better or worse, capitalism does, in some sense, pit all of us in competition with one another. We frequently use the metaphor of a race for capitalism. Arguments for economic justice especially like to use this image, because they argue that it's neither fair nor good for competition the way some people have to start the race behind. 

If student loans represent a handicap in a race, then you can certainly make an argument for removing that handicap. The next time the race starts, we should try taking that handicap away and see what it does. But canceling student debt suddenly is like removing the handicap in the middle of a race, and only for some people. 

An example from my own life


I got through undergraduate school without any debt, thanks to help from my parents. (This is the original unfair handicap all capitalism strains under. Nobody can pick their parents, but you can get a huge head start or a huge disadvantage in life based on something you can't control.) My parents didn't pay for grad school, though, so I picked up debt then. So did Mrs. Heretic. We picked up quite a lot of debt, actually. When we both finished our M.A. degrees in 2003, we had about 90K in debt. We didn't sweat it, though, because we figured we had a few years to work and get it taken care of before we'd have kids. I don't know why we were so optimistic, when we both had gotten degrees in liberal arts that weren't good for much, but that's what we were like then. 

Long story short, Mrs. Heretic got pregnant almost the second she finished grad school, and we spent years trying to figure out how to either live off my one salary or juggle childcare so it paid for her to go to work. We didn't do well at it. We were having a hard time paying our bills without student loans figuring into it, and we had to put expenses on credit cards. I think my credit rating was in the low 600s at one point, even though I was paying everything on time. The great thing about capitalism is that when your credit rating is low, you pay more for everything, making it harder to improve your score and trapping you in that rut forever. 

We both put our loans into "forbearance," which meant we didn't have to pay on them, but they were accruing interest. I did that for my loan for as long as they would let me. When I finally started paying, I'd gone from 25K in debt to 33K. I picked a graduated plan that would start paying interest only, then increase over time. Before COVID-19 put everyone's loans on hold in 2020, I had been paying a little over ten years, and had only gotten the balance down to about 30K. Mrs. Heretic had a higher balance, so we focused more on getting hers down. Between us, we now owe about 85K. We've probably made somewhere in the neighborhood of 50K of payments, and we now owe 5K less than we did in 2003. 

A lot of people present these stories as evidence of the inhumanity of student loan debt, but I'm not so sure. I got a degree in the liberal arts knowing it wouldn't lead to a job that paid much. So did Mrs. Heretic. We could have opted for cheaper places to live than we did, but we were afraid of what the effects of living in some of those neighborhoods would be on our son. (There's a great example of the cruelty of capitalism--the place you can afford has a direct impact on your personal safety.) We took vacations. Not extravagant ones, but we took them. We ordered food out sometimes, instead of always eating hyper-economical meals from bargain grocery stores. We bought new cars. Not fancy ones--I've been driving the same Toyota Corolla for twelve years--but we did buy new cars. We could have taken public transportation. It would have sucked, but we could have.

Some people did make the sacrifices we didn't, because they were playing the game by the rules as they were. They paid off their loans, and now they're in a better position than us. I don't begrudge them this. I'm not good at capitalism. I don't really like it, and I don't put as much effort into it as I would if I thought the rewards were worth the cost. That's why I do things like get degrees in English. I know that I'm never going to win at capitalism. I might prefer a different system, but we don't have that system now. Others didn't spend time moping about the world like I did. They worked to thrive in it. Do I now deserve a governmentus ex machina bailing me out?

A funny thing happened last year. Capitalism actually kind of worked for us. After losing a lot of money we couldn't really afford to lose on a house back during the crash of 2007/2008, we sold a house in early 2021 and made a lot of money out of it. I didn't sell it to make money; I was moving to a new job. But man, did it work out. We'd bought the house in 2015 with a VA loan. Qualified buyers were so few back then, I asked for the seller to pay all my closing costs, and he said okay. Without that, I couldn't have bought. I had very little actual cash. I financed 100% of the cost of the house plus the VA financing fee. I wondered what the hell I was doing. We made essentially no improvements in six years of home ownership. Then COVID-19 made it so nobody wanted to sell a house, driving down supply and making my house worth way more than it should have been. 

We now have enough money that we could pay off our student loans. We even have a little bit beyond that, not enough to make us rich, but certainly a bigger savings account than I had in 2015 when I had to finance 103% of the cost of a house. We aren't paying off our loans, though, because it's possible we might not have to. Or that we might not have to pay off all of them. 

The real irony here is that I had worked a government job for a long time prior to last year. If I were still working that job now, I'd qualify to have nearly all my student loans cancelled. Oops. Did I mention I'm not good at capitalism? I hardly ever make the right choices.

If the government cancelled all or most of Mrs. Heretic's and my loans, we'd suddenly have actual money in our account, instead of money we ignore because we know we have to use it to pay something off. We might actually have enough to be competitive for one of these incredibly inflated houses, instead of paying ridiculously inflated rent. 

But--and here's where the cruelty of capitalism shines again--I'd be bidding on those houses against other people who are struggling as hard as I am. Some paid off their loans. Some never went to college, because they didn't want the student loan debt. We were all running a race against each other, and suddenly I got an advantage over them. Now I get the house in the nice neighborhood, while the guy who paid off his loans gets stabbed by a meth head. 

Capitalism is brutal and shabby (even if it might be the least terrible option available). A policy like sudden student loan cancelation would make it less so, but only for some people, and rather randomly. Why not a sudden massive payment to anyone making less than 50K a year instead? Why not paying off medical debt? Because this is the issue the politics of the moment have seized on, not necessarily because it's the best way to mitigate the brutality and shabbiness of our system. 

Policy isn't the same as private morality


When I got hazed as a sophomore, the right thing to do was to end hazing. If my grandparents got polio as kids, it's a good thing I have a vaccine now so I don't get it. Nobody should hate the inheritors of the future because we've made it better for them. That's what we're supposed to do for our progeny. 

But public policy doesn't always work the same as individual morality does. It isn't flexible enough to provide for what is right in every circumstance. Instead, the best it can strive for is to be fair. Sometimes, fairness is a very blunt tool, and it means enforcing the same crappy rules equally across all of society. 

We don't allow for punishment of crimes ex post facto. If someone saw a loophole in a system and exploited it, we close the loophole, but we don't punish the person who took advantage of it, even if that person was a jerk for having exploited it. Private morality would dictate we hate the guy, because he should have known better, law or no law. But the law has limits. 

Maybe I should have been able to get my grad degree for free. Maybe I should have been able to pay it off interest free on my own schedule. If we change the rules now going forward to make it easier for future students, I won't hold it against them that they got something I didn't. That's the correct application of rejecting the "I had to, so you should, too" fallacy. 

For me, I'll take the help if it's offered. Like I said, I suck at capitalism, so I need all the help I can get, even if I don't really deserve it. But I understand why Biden is reluctant to enact some massive forgiveness. 

If forgiving loans will bring a good to society so powerful, it's worth the unfairness to some people, then it's worth considering. I'm not sure, with inflation at an all-time high, though, that we'd get the benefit we want from freeing up a bunch of cash for Americans. It's likely to mean that people like me will just keep paying ridiculous prices for things like houses and gas, instead of making demand slacken and bring prices down. 

It's not an easy choice. Biden has political considerations to consider with a mid-term coming. There are pros and cons to any choice he makes, including a middle ground of forgiving smaller amounts. But the debate is not advanced by applying false moral metaphors where they don't belong.  



1 comment:

Feel free to leave a comment. I like to know people are reading and thinking.