News & Commentary United States

“Cancelling” Student Debt Is Not a Good Idea

"There are no such things as government subsidies. Governments do not pay for a single thing. The taxpayer does. So when a student can write off his education loan, the government is not subsidising it – the taxpayer is being stuck with the bill."

Higher education is admittedly expensive – especially in private schools. I did both public and private schooling for my two-and-a-half degrees (I never did finish that PhD for various reasons). Most of the time during those eight or so years I worked as well as studied. I did all sorts of jobs, from house painting to security guard work to working in kitchens.

Despite being a full-time student and often working long hours as well, I managed to graduate with honours for my BA and highest honours for my MA. Millions of others students have done just the same. But one of the pet causes of the left is to cancel all debts. It could be the foreign debt of other nations for example, or it can be the debts of students.

U.S. President Joe Biden now wants to cancel student loans for millions of Americans. This is yet another government subsidy that he and the Democrats love to roll out. But before I go any further I must let you know that I just stated a massive falsehood here.

There are no such things as government subsidies. Governments do not pay for a single thing. The taxpayer does. So when a student can write off his education loan, the government is not subsidising it – the taxpayer is being stuck with the bill. The details of Biden’s plan are these:

US President Joe Biden on Wednesday announced his long-awaited plan to deliver on a campaign promise to provide $US10,000 ($14,400) in student debt cancellation for millions of Americans — and up to $US10,000 more for those with the greatest financial need — along with new measures to lower the burden of repayment for their remaining federal student debt.

Borrowers who earn less than $US125,000 ($180,000) a year, or families earning less than $US250,000 ($361,000), would be eligible for the $US10,000 loan forgiveness, Biden announced in a tweet. For recipients of Pell Grants, which are reserved for undergraduates with the most significant financial need, the federal government would cancel up to an additional $US10,000 in federal loan debt. Biden is also extending a pause on federal student loan payments for what he called the “final time” through the end of 2022.

What are we to make of this debt cancellation or debt forgiveness? First, as already mentioned, we have to stop the useless euphemisms and call it what it is. No debts are being cancelled or forgiven – they are simply being transferred to someone else: the hardworking taxpayer.

Most of these taxpayers may never have gone to college – or, like me, they worked their way through college. But now they will be forced to pay for the loans of these students. This is what is known as socialism. The state coercively takes money from the people and distributes it wherever it wants to. And the hardworking citizen is the one who always gets slugged for this.

And here is another point worth keeping in mind: higher education certainly is not for everyone. The idea that unless you have some sort of college degree you will not be a productive or employable member of society is so much baloney. There are plenty of students with BAs, MAs and PhDs in all sorts of esoteric fields (e.g., the sex lives of non-CIS-gendered albino earthworms in lower Guatemala) that are still unemployed and are contributing nothing to society.

Why in the world should you and I subsidise this? If they value their studies so much, let them pay for it. As one meme on the social media puts it: “If your college degree does not have enough value for you to pay it off, it certainly does not have enough value for me to pay it off.”

But is not this the Christian thing to do?’

At this point some rather clueless or lefty Christians might be asking, ‘But should we not forgive our debtors as Jesus said we should do?’ Or they might be raising this rather lame objection: ‘But what about debt relief as in the Year of Jubilee in Leviticus 25?’

Let me deal with each in turn. The quote of Jesus as found in Matthew 6 and Luke 11 is part of his teaching on the Lord’s Prayer. The Matthew 6:14-15 version puts it this way: “For if you forgive others their trespasses, your heavenly Father will also forgive you, but if you do not forgive others their trespasses, neither will your Father forgive your trespasses.”

As can be seen, the word ‘debt’ is more properly translated as ‘trespass,’ as most newer translations have it. This is NOT about some student loan or some other financial debt. It is about forgiving the sins of others. And even if it were about economic matters, it is about one individual extending grace to another. It is NOT about government wealth confiscation and transfers.

This becomes even more clear in the Luke 11:2-4 version of this teaching:

And he said to them, “When you pray, say:
“Father, hallowed be your name.
Your kingdom come.
Give us each day our daily bread,
and forgive us our sins,
    for we ourselves forgive everyone who is indebted to us.
And lead us not into temptation.”

So this has nothing to do with governments transferring the debts of students onto the taxpayer. As to the second objection concerning Leviticus 25 – a favourite of religious lefties – and its discussion of the Year of Jubilee, one simply needs to read it in context. It is all about returning land to the original owners and has nothing to do with socialist redistribution. It is quite pro-private property in others words, and not about government confiscation.

I have written about this elsewhere. As I said in a piece from 2010:

When Israelites found themselves in financial difficulties, they could sell themselves into indentured servitude, or sell off their properties. In both cases, the Jubilee Year reaffirmed the freedom which God had called His people to enjoy, as was so powerfully expressed at the Exodus. Thus this legislation provides for the return of lands to their original owners. These lands could not be permanently disposed of. See Numbers 36:9 as an example about this command to Israel.

I also quoted the American theologian and ethicist John Jefferson Davis:

“Leviticus 25 is not really concerned with income equalization but with the restoration of leased family lands.” He reminds us that “the incomes earned prior to the Jubilee were retained by the most recent owner.” He then makes this important point: 

“The provisions of Leviticus 25 were intended to safeguard equal opportunity for Israelites to earn income without destroying the incentives to work and invest through normal economic activities. Unlike many modern welfare programs and systems of progressive taxation, the Jubilee laws, by allowing retention of income earned from the land, did not destroy the incentives to work and invest, which are essential to the economic well-being of a society. Notice also that Leviticus 25 is not a program of ‘expropriation’ or seizure as, for example, in the case of certain Latin American programs of ‘land reform.’ In the Jubilee laws, there is compensation for land restored to the original owner.”

He continues, “The intent of the Jubilee legislation was to preserve the broad ownership of property in Israel. When the prophet Micah looked forward to the blessings of the messianic age, he envisioned not vast collective farms operated by the state, but a society with ‘every man under his vine and under his fig tree’ (Mic. 4:4).”

Thankfully some Christians are fully aware of the decidedly un-Christian nature of Biden’s policy regarding student loans. Black American commentator Samuel Sey just penned a piece with this title: “Why Christians Shouldn’t Support Student Loan Forgiveness”. He concludes his article this way:

“Cancelling” student loan debts won’t help anyone. In fact, it’ll only create more injustice and suffering. The Bible says, “the borrower is the slave of the lender.” (Proverbs 22:7) Therefore it shouldn’t surprise us that at a time when Americans (especially poor Americans) are already suffering record-high inflation, Obama’s and Biden’s top economic advisor during Obama’s presidency—Larry Summers—warned that student loan forgiveness would make inflation even worse.

Meaning, though 87% of Americans do not have student loan debts, 100% of Americans would pay for Biden’s plan. According to the Penn-Wharton Budget Model, this would cost Americans between $300 billion and $980 billion over the next ten years. In other words, Biden’s student loan “forgiveness” isn’t real forgiveness. It doesn’t cancel an individual’s debt, it redistributes their debt and forces others to pay for it.

Student loan forgiveness is like a person who “forgives” an individual of their debt by harassing the debtor’s grandparents until they pay for it. Student loan forgiveness doesn’t forgive anyone, it penalizes everyone. So those of us who know what real forgiveness looks like shouldn’t support this corrupt definition of forgiveness. We Christians shouldn’t support student loan “forgiveness.”

We can expect the secular left to applaud this move by Biden. Sadly some religious lefties will also think it is a great, Christian thing to do. But the biblical believer will know that it is no such thing. Socialism never is.