College Debt

Elizabeth Warren's Plan To Cancel College Debt Is a Giveaway to the Well-Off and Well-Connected

The Massachusetts senator wants to spend $1.25 trillion on a plan to wipe out student loan debt and make public tuition free.

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Elizabeth Warren, the Democratic primary's foremost Game of Thrones recapper, styles herself a staunch defender of the little guy. In her campaign announcement, for example, the Massachusetts senator declared that millions of American families are currently "struggling to survive in a system that's been rigged, rigged by the wealthy and the well-connected." She's a true champion of the struggling middle class, the sort of grounded and relatable politician who knows what it's like to be 29 years old and still sharing your parents' HBO GO password.

To prove her commitment to fighting a system that is rigged by and for the wealthy and well-connected, Warren yesterday announced a new plan (with Warren, there's always a plan) that would … provide more than a trillion dollars in aid to the wealthy and well-connected.

In addition to ending tuition at public colleges, Warren wants to cancel the vast majority of outstanding student loan debt. The idea is to eliminate debt up to $50,000 for people with household incomes under $100,000, and offer more limited debt cancellation for households making between $100,000 and $250,000. By her own estimates, the full plan, which also includes funds for Pell Grants and historically black colleges, would cost about $1.25 trillion, which she says she would pay for with a tax on wealth that she announced earlier this year.

On the surface, Warren's idea might sound like another expensive federal benefit for struggling families. But the nature of college attendance and student loans means that Warren's loan forgiveness plan is a massive giveaway to relatively well-off people.

In the U.S., only about a third of people over 25 have a college degree, making them a comparatively elite group whose elite status is reinforced by, among other things, the connections they make while at college.

On average, college graduates earn about $1 million more during their lifetimes than non-college graduates, according to a Georgetown University study. A separate study from Pew found that college graduates typically earn about $17,500 more annually than people who only had high school degrees.

College graduates aren't, for the most part, super rich. But generally speaking, they are far more comfortable than the majority who lack such degrees. And the rich, however you define that word, are a class comprised almost entirely of people who graduated from college (with, yes, a handful of notable exceptions). This is a plan that provides a rather large benefit for them.  

Warren's defenders might respond that it's still a downward transfer, since the whole thing will be paid for by a new tax on the super wealthy. There are, however, a few problems with this as a financing mechanism.

The first is that the tax might not be constitutional. Even if it is, the second problem is that it's likely to raise far less money than projected, which is one of the reasons that most countries that have tried similar sorts of taxes over the last two decades have abandoned them.

The third, as the Washington Examiner's Philip Klein points out, is that Warren has suggested that this same tax could be used to help pay for a whole slew of other progressive policy ideas, including Medicare for All, the Green New Deal, and subsidized child care, which, all together, would cost so much it's barely even worth estimating. (Okay, fine: about $42 trillion, give or take the GDPs of a few mid-sized nations.)

This is a little like finding a $20 bill on the street and using it to run up five $20 bar tabs. On the campaign trail, where inspirational speeches are more important than math, you can spend your imaginary wealth tax revenue however many times you'd like. In reality, you can only spend the money once.

I am always hesitant to label policies as class warfare, but here, it's hard to avoid the description. Warren wants to impose an essentially punitive tax on the rich to fund a program for the merely well-off. And she wants to use the revenue it hypothetically generates not to pay for social programs targeting the poorest and neediest, but to fund debt forgiveness for the comfortable, college-educated upper middle class—which is to say, the sort of people who spend a lot of time reading New York magazine essays about Game of Thrones. This is a different, and more expensive, sort of pandering than an essay about why Warren loves Daenerys Targaryen, but it's pandering all the same.

I am not without sympathy for those who have racked up tens of thousands in burdensome college debt, and, in the process, helped fund the installation of those august tools of higher learning, campus water parks. The higher education system has become far too dependent on federally-backed loans that encourage colleges to raise tuition, while also encouraging prospective students to borrow ever larger amounts, often to their own long-term detriment. That system should be dismantled. National Review's Kevin Williamson has some ideas as to how, which may include modest amounts of debt forgiveness.

But Warren is not looking to attack the systemic faults of higher education so much as to replace and expand them with an even more sweeping system of federal intrusion.

As a policy proposal, her plan will no doubt find supporters. But as a campaign gambit, I suspect it won't be enough. Despite her pedigree and preparedness, Warren is underperforming in this race. Once recent poll found her trailing behind Sen. Bernie Sanders and former Vice President Joe Biden—who hasn't even officially announced yet—in the state of Massachusetts. Elizabeth Warren, you may recall, is a senator from Massachusetts.

Yes, the race is still early, and she still has time to release another $42 trillion or so worth of policy proposals. But somehow I doubt that her student loan plan will be the one that moves her to the front of the pack. Warren has a plan for everything, except how to turn around her campaign.

NEXT: Harris Clarifies That She Does Not Support Prostitution Decriminalization, Would Use Executive Power To Toughen Gun Laws

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  1. Making education FREE just means you deflate the value of your degrees! We already have so many doctors and lawyers, that we have to invent make-work to keep them all busy. You want to start a small business? Here, fill out these 345 forms… BUT, the lawyers can help you fill them out, for a small fee!

    You want to scratch your own ass? Hey, there’s some VERY delicate bodily tissues down there!!! Here, get you a prescription for a certified proctologist specializing in ass-scratchology!

    If we keep this up, we will need a prescription for booger rags, and permission to blow our noses, to justify more education for more doctors…

    1. People who do not value education are among my favorite disaffected losers.

      1. Well, I resent the living SNOT out of those force-and-violence-addicted thugs-goons who FORCE me, at the gunpoint of Government Almighty, to value education WAAAY the hell more than I want to! You think my fear of having to get a physician’s permission to scratch my ass, is way out of line?! TODAY, already I have to get such permission to buy a “lung flute” to “use sound waves to dislodge the boogers in my throat and lungs”, AKA, I have to get permission to indulge in mechanically assisted “coughing”! I am NOT making this up! See “lung flute”…

        To find precise details on what NOT to do, to avoid the flute police, please see http://www.churchofsqrls.com/DONT_DO_THIS/ … This has been a pubic service, courtesy of the Church of SQRLS!

        1. God damn I like you sqrlsy one. Seriously, you’re my kind of person. Never change your ways. I don’t think for one minute you’re against education. I get what you’re saying. Kirkland has a good point though as well. There is a celebrated resistance to knowledge a pride of ignorance that is pervasive in this country and does present danger to us all.

          1. Thank Yew Ordinary Person, I do appreciate that! Sometimes I feel like a voice in the wilderness, yes indeedy…

            I wonder how many folks ever stop to think about, HOW did that first person earn their degree in Doctorology of Doctorology? Teaching each others what we know, or even think that we know, is a WAAAY good thing! When Government Almighty gets in the way, and says, “Only THESE folks over HERE are certified expertologists of expertology, and only THEY may do XY and Z, by force of LAW, that is when we get in WAAAY deep shit, WAAAY over our heads!!!

            Then Government Almighty shits all over us, nine ways to Sunday, but FOR OUR OWN GOOD, you must understand!

        2. SQRLSY

          Scratch your ass all you wish.

          Why is your ass itching so much?

          If you want you can get a consultation for the problem.

          What you are missing is that medicine is a guild more than a legal entity. It has by far more internal oversight than external.

      2. And how much do you think people will value education when they don’t have to pay anything for it?

        I’m not opposed to free college, as long as we limit it to degrees that are worth obtaining and the students who are likely to obtain them (no free rides for gender studies majors or 800-something SAT scores)

      3. Hicklibs who cannot provide comments outside of the ten standard programmed responses are among my favorite over-compensating NPCs.

        1. Nothing wrong with helping people who are saddled with student debt. Those who oppose are stupid SFB trumpylizards.

      4. Paid trolls who think education is a piece of paper are among my favorite disaffected losers.

        FTFY

      5. Arty, you are a high school dropout and I hold multiple degrees. I clearly value education and am better educated than yourself. You are just an ignorant progtard only versed in totalitarian progressive orthodox dogma.

      6. You should shove a shotgun in your mouth and pull the trigger.

        1. All trump supporters should follow suit with the shotgun down the mouth and trigger pull. It would put this country out of its misery.

  2. A giveaway to the well-off and well-connected…in other words, Lizzie’s friends. Not much of a surprise, that.

  3. ‘We already have so many doctors and lawyers, that we have to invent make-work to keep them all busy.’

    ———–

    Once there is free health care, men can get their penis enlarged and woman can have their breasts enhanced and if they don’t like the outcome, they can hire a lawyer to sue the doctor. So there will be plenty of work to keep them all busy.

  4. I am not without sympathy for those who have racked up tens of thousands in burdensome college debt, and, in the process, helped fund the installation of those august tools of higher learning, campus water parks.

    I’m completely without sympathy for them.

    1. That preference for ignorance not only makes you a casualty of American progress and America’s culture war but also cushions the blow by promoting the likelihood you will avoid self-awareness.

      Carry on, clinger.

      1. Yes, and below is some of the kinds of “wisdom” we are getting for today’s education dollars…

        https://reason.com/2016/03/15/professor-defends-absurd-feminist-ice-st

        Professor Defends Absurd Feminist Ice Study: ‘The Good News Is People Are Talking About Glaciers!’

        Sad to say, this is the kind of PC bullshit that got Der TrumpfenFuhrer elected…

      2. LOL, so you “educated” folk regard it as “ignorance” to consider how you’re going to pay off the debts you take on?

        Yeah, that’s a great way to create a responsible adult!

        1. Arthur is hardly “educated”–he’s still trying to make up for his hayseed upbringing.

          1. Arty is a high school dropout and sub assistant janitor to a wealthy conservative business owner. He is angry and he covets. Typical progtard.

      3. You should have your retard head stomped on repeatedly, you knuckle dragging rube.

    2. I do sympathize, to an extent. The reason we have so many young fools with expensive degrees that are objectively useless (unless they want to be academics, I suppose) is that society told them that no matter what they wanted to do, they needed to get a college degree.

      Now, this is hogwash. It’s always been hogwash. But it is what society has been telling kids for decades.

      That poor schmoo at the Occupy Wall Street protest who owed $30K on a Masters Degree in Puppetry? Fifty years before he would have know The Right Thing was to hitchhike to Los Angeles, get a job running coffee for Jim Henson Studios (or the equivalent) and work his way in front he side. That would have been the dominant narrative; what Society told him was The Right Thing.

      Now? Society told him that The Right Thing was to borrow more money than he could reasonably pay back and pound it down a rathole.

      1. The only reason why those objectively useless degrees exist is because taxpayers are footing the bill. If colleges had to actually compete on cost, useless degree programs would only exist at niche colleges, as it should be.

      2. “The reason we have so many young fools with expensive degrees that are objectively useless (unless they want to be academics, I suppose)…”

        You had it right before the parenthetical. If they become academics in an objectively useless field, aren’t they just perpetuating the uselessness?

        1. As much as I hate it… I do think some of the useless degrees should exist. I mean SOMEBODY in the world should be studying and becoming an expert on most weird obscura… The problem is that we have saaay 10,000 people graduating a year with Russian Lit degrees or whatever, when really there should be like 60 of them at one school like Harvard, whose parents are rich and paid full pop.

          I have no idea how many people get Gender Studies degrees every year, but it should probably be about 50 people, and it should be like actual science instead of progressive dogma.

  5. A reason writer finally points out a wealth tax is unconstitutional. Progress.

    1. A Reason commenter finally recognizes that Reason has despised taxes of all sorts for a long long time. Is your vocabulary so limited that you cannot include wealth tax among the general category of taxes?

      Or are you so focused on your interpretation of “constitutional” that nothing else matters?

      1. Alphabet guy, what the fuck is your problem? Reason has been quasi progressive for awhile now. Look at their warm and fuzzy articles on AGW, illegals, and candidates like Buttgag.

        Jesse is spot on.

        1. You apparently see the world in black and white. What is your problem with articles on the differences between Dem candidates? Do you think they are endorsements — that would be funny, because by that light, Reason would be endorsing most of the field!

          Maybe you see Trump as so much better than any Dem that all Dems are equally evil.

          Reason is no more Progressive than Trump is a Republican.

          1. you really don’t understand anything, do you? My understanding of the qualities and differences of these candidates is far beyond yours. The only thing you got right is that Trump is far better than any of them. Most of us get that, but you appear confused and befuddled.

    2. Absolutely, the liberals already want a death tax now they don’t want to wait for you to die they want it now. And they have already proposed spending it 10 times over to pay for education, fund the shortfall of entitlements and a host of others.

  6. Methinks the tree of liberty needs refreshing

  7. Fuck, why not cancel all debt? That would really shake things up and help the struggling masses.

    1. this. it’s all fake anyway.

    2. Because that would seriously upset her campaign donors.

      1. Yeah……about that. Take a look at her ‘donations’ of late. Those three guys aren’t that important.

        I doubt she makes it to Super Tuesday.

  8. […] [ April 23, 2019 ] Elizabeth Warren’s Plan To Cancel College Debt Is a Giveaway to the Well-Of… […]

  9. I expect America’s mainstream to solve this problem along a liberal-libertarian line, perhaps by arranging payment of a percentage of income over a period of decades by those who wish to become educated, skilled, contributing members of a modern, accomplished society.

    1. That might be vaguely acceptable, but it does nothing (says nothing) about the problem we have today, which is the requirements for TOO MANY degrees, credentials, and licenses!!! WHY do I need a physician’s permission to blow on a cheap plastic flute?!? What next, will I need a PhD mechanical engineer to write me a prescription for an oil change for my car?!?

    2. Isn’t that what we already have? You take out loans, you pay them back out of your income. How is that different. And there is already programs to reduce your payments. I have $125000 worth of Student Loans, but since I chose to work in the public sector for much less pay then the private sector (I’m in extension education, if I worked as a private ag consultant I would make double what I make now) my payments are reduced. So how is that different?

      1. Your payments are reduced by contract with your employer. You took less reportable income to work. In exchange your non taxable benefits are larger including some way to repay the loans.

        Somebody is paying it. That is fine if it works out for you and the job.

        Just guessing.

    3. And those that take a worthless degree at one of your “preferred universities”? Who’s picking up the tab for them?

    4. Better yet- pay your own way, you moocher. Shocking concept, I know

    5. “I expect America’s mainstream to solve this problem along a liberal-libertarian line, perhaps by arranging payment of a percentage of income over a period of decades”

      This would unfortunately be another way to take another small freedom away from john q public and hand it over to the govt. They “take care” of the bill then you get to fork over a percent of your income for eternity.

      I would rather have choice in:

      1. How big is the basic bill? (Penn State Behrend degree in undergrad will get you to your doctorate just as well as one from Johns Hopkins…at a fraction of the cost)
      2. How big are accessory expenses (I dont need every book they tell me, I dont need to live in a dorm, I can eat ramen for 4 years to cut on meal plan)
      3. How fast do I want to pay them off. Certainly not over decades, the people who do that are usually not in fiscal command of their life.
      4. Can I refi and get a much better rate to lower the overall cost long term?

      When you sign up to let govt “take care” of things at the expense of them docking your paycheck for decades, it is a recipe for handing over a freedom (i.e. managing your own expenses like a big boy) to the govt so big daddy can “take care” of you.

      1. And if you need any further proof of govt taking care of things via taking a percent of your check for decades please see:

        Medicare and SS. Perfect examples of how americans fork over their money, have it mismanaged and splurged away, and then get a product worth significantly less than if they saved their own money and acted like responsible adults on their own. Govt taking care of things for you is not a “liberal-libertarian” concept

  10. Will we forgive the debt of students like Isabella and Olivia Giannuli or Sophia Macy?

    1. They were bought and paid for, so there shouldn’t be much debt there.

  11. So, let’s further separate payment from those receiving the service. This model worked out so well in the medical industry.

  12. This is the part where we’re all suppose to act shocked that socialist giveaways mainly benefit the well connected and wealthy. Wow- so surprising. Who would have thought?

  13. The bottom line is that all of these leftists want European levels of social spending without adopting European tax systems. They can’t have it both ways, and will have to sell the massive middle and lower class tax increases that this will require. Good luck with that. Oh yeah, this is before mentioning that we don’t have anyone to step in and provide our national defense for us.

    1. This has actually been one of my main talking points with prog tards lately. I explain how it ACTUALLY is in Europe. 60% tax rates starting at ~$30K a year, living in a house half the size, not being able to afford owning a car, etc.

      I think ask them if they still think all the “free” stuff is worth it. A number of them have had pretty shocked looks on their faces and don’t really want to answer. They’re all told we can have the high standard of living we have now, low taxes, AND free stuff… But it just ain’t so. Once that sinks in I think a lot of them lose enthusiasm.

  14. In reality, you can only spend the money once.

    Apparently, you’ve never heard Keynesians talk about spending money.

  15. Elizabeth Warren doesn’t have a plan to cancel college debt. Elizabeth Warren has a plan to get her name in the media for free by saying she’ll cancel college debt.

    The latest polling average has Warren coming in sixth:

    Biden: 29.2%
    Sanders: 22.2%
    Harris: 8.2%
    O’Rourke: 7.4%
    Buttigieg:6.8%
    Warren: 6.0%

    https://www.realclearpolitics.com/epolls/2020/president/us/2020_democratic_presidential_nomination-6730.html

    Considering Warren’s relative name recognition, Harris, O’Rourke, and Buttgieg are kicking her ass. She’s getting beaten by people who nobody knows–and that means people know her and don’t like her. I guess progressives don’t like it when people defraud and abuse affirmative action.

    1. Meanwhile, Warren is coming in fifth in the fundraising.

      https://www.cbsnews.com/live-news/democratic-fundraising-2020-democratic-candidates-reveal-q1-fundraising-efforts/

      This is why she’s making outrageous statements in the news every week. When she’s not calling for Amazon, Facebook to be broken up, she’s calling for Trump to be impeached and promising to forgive a $1.25 trillion in student loan debt–and that’s because she’s getting her ass kicked. If she were up there with the real contenders, like Sanders and Biden, she wouldn’t be making these outrageous statements. She’s a loser, and that squealing she makes about Amazon, impeachment, and college debt is the sound of her campaign circling the drain.

      Taking her pig squeals seriously is carrying water for her campaign.

  16. “This is a little like finding a $20 bill on the street and using it to run up five $20 bar tabs.”

    Actually, it’s more like realizing that someone you don’t like has a $20 bill in their pocket and deciding that they don’t deserve it so you’re going to take it and run up five $20 bar tabs.

    1. Actually, it’s more like realizing that someone you don’t like has a $20 bill in their pocket and deciding that they don’t deserve it so you’re going to take it and run up five $20 bar tabs and calling it an education policy.

      FIFY

  17. Elizabeth Warren’s plan to cancel college debt is another exercise in terminating responsibility for one’s debt and bad choices.
    However, if Fauxahontas was eliminate student debt, then she is more than welcome to absorb all the student out of her own pocket.
    But for some strange reason, I don’t see that as happening.

    1. Yup, just another way to make people more dependent on govt and allowing them to shirk their own personal responsibility (in a way that is distributed to other taxpayers).

  18. Y’all might be surprised to learn the state of Louisiana has been offering something like this for over a decade now and it’s extremely popular with the voters. The money is used to fund our state colleges so it stays in state and the educated workforce attracts business from out of state. I think people will support this. It isn’t radical and it’s working in a place like Louisiana.

    1. “Y’all might be surprised to learn the state of Louisiana has been offering something like this for over a decade now and it’s extremely popular with the voters.”

      Free shit is always popular.
      Fuck off, slaver.

    2. That is what is great about a federal republic, states can try stuff out for themselves without a central government forcing it on everyone else. If it works out well,others will voluntarily adopt it without the need for the central government to force it on everyone.

  19. College didn’t used to cost $60 grand per year. Gosh, I wonder what changed?

  20. Simple rules and these have been done.

    Debt while in school has zero interest. That is your subsidy from the government.

    When you are done interest rates like mortgages are tax deductible.

    You are held responsible to repay the debt. There is no way to claim otherwise.

    There is no such thing as a free lunch. You want an education and credentials that involves money and risk.

  21. college graduates typically earn about $17,500 more annually than people who only had high school degrees.

    Obviously the solution is to tax college graduates an additional $17,500 annually.

  22. Here again the Dilbert cartoonist has suggested letting the State fund 01 (one) subsidized college online. Let he who among you has never visited the Khan Academy for a refresher on Newton’s Method of converging on a square root, cast the first stone at this lesser of many evil ideas.

  23. […] Reason: Elizabeth Warren’s Plan To Cancel College Debt Is a Giveaway to the Well-Off and Well-Connected &#… […]

  24. […] Elizabeth Warren’s Plan To Cancel College Debt Is a Giveaway to the Well-Off and Well-Connected […]

  25. “Free” college is a giveaway to the Postmodern Marxist Theocracy, not to students.

  26. I kinda do… But really don’t feel sorry for idiots that get useless degrees. Anyone who is so dumb they don’t realize a Gender Studies degree is a horrible idea can fuck right off.

    As for the ones that study useful things, they’re basically set for life as long as they don’t develop a cocaine habit or whatever.

    All these subsidies need to fucking stop, then private funding would cease funding useless degree studies because they know they won’t be able to pay back, and the cost of college will go down, and all will be well.

  27. […] at Reason, Peter Suderman identifies this same problem, saying, “the nature of college attendance and student loans means that […]

  28. […] at Reason, Peter Suderman identifies this same problem, saying, “the nature of college attendance and student loans means that […]

  29. […] at Reason, Peter Suderman identifies this same problem, saying, “the nature of college attendance and student loans means that […]

  30. […] at Reason, Peter Suderman identifies this same problem, saying, “the nature of college attendance and student loans means that […]

  31. […] at Reason, Peter Suderman identifies this same problem, saying, “the nature of college attendance and student loans means that […]

  32. […] at Reason, Peter Suderman identifies this same problem, saying, “the nature of college attendance and student loans means that […]

  33. […] at Reason, Peter Suderman identifiesthis same problem, saying, “the nature of college attendance and student loans means that […]

  34. […] – Idiot Extraordinaire: Elizabeth Warren https://reason.com/2019/04/23/elizabeth-warrens-plan-to-cancel-college-debt-is-a-giveaway-to-the-wel…This Week’s Quote: “I am in favor of legalizing drugs. According to my values system, if […]

  35. […] have the tax on the books.” Warren also keeps promising to spend her new revenue on all sorts of things, to a degree that there isn’t enough money to cover her growing list of […]

  36. […] still have the tax on the books.” Warren also keeps promising to spend her new revenue on all sorts of things, to a degree that there isn’t enough money to cover her growing list of […]

  37. […] have the tax on the books.” Warren also keeps promising to spend her new revenue on all sorts of things, to a degree that there isn’t enough money to cover her growing list of […]

  38. […] the Editors’ Roundtable edition of the Reason Podcast, Sen. Elizabeth Warren (D–Mass.) announced a massive new student-loan forgiveness proposal, Sen. Kamala Harris (D–Calif.) said […]

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  40. Yes, students often have gender studies questions. But nowadays, they can find the most extensive answers on the Internet.
    “Life’s struggle is a partnership. We fight and win together, or we truly lose the vision of our powerful spirituality and awesome oneness.”
    ― Maya Emmett, Killing Adam: The Emasculation of Humanity

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