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Biden's worst gamble? Backing student debt forgiveness
Canceling student debt wasn’t a major part of Joe Biden’s campaign pitch when he ran for president in 2020. Once in office, however, he cozied up to these proposals, a strategy that ultimately backfired.
During that campaign, Democrats like Bernie Sanders and Elizabeth Warren wanted to cancel $50,000 in student debt per borrower or more, while Biden, portraying himself as a moderate, backed a far lower threshold based on income. Biden won the Democratic nomination, of course, and then the White House.
As president, Biden leaned harder toward the Sanders-Warren position.
His first plan canceled up to $20,000 in debt for most of the 43 million Americans with student loans. The Supreme Court blocked that, so Biden tried a number of different approaches.
By the time the 2024 election rolled around, Biden’s cancellation plans covered about $175 billion worth of loans held by about 5 million borrowers.
Biden clearly tried to appease the Democratic Party’s left wing and the young, college-educated voters it supposedly appeals to. Did it work? Not even close.
Biden’s student debt debacle is a microcosm of what went wrong for Democrats in 2024.
Vice President Kamala Harris replaced Biden atop the Democratic ticket in August and basically ran on his record. Yet Harris ended up doing worse with the groups targeted by student debt cancellation than Biden did in 2020.
Biden won 61% of the vote among 18-to-29-year-olds in 2020, for instance, while Harris won just 51% of them in 2024, according to AP VoteCast. Biden won 57% of college grads in 2020, while Harris performed one percentage point worse with this group in 2024.
The flip side is also true. Donald Trump won 51% of non-college grads in 2020 and 55% of them in 2024.
A persistent problem with the Democratic Party is a focus on feel-good programs for groups of voters the Democrats consider their base, with precious little for those outside the base.
Many of those programs are meant to target progressives who got fired up for Sanders in the 2016 and 2020 Democratic primaries. But the enthusiasm for redistributionist policies simply fails to ignite mainstream voters in national elections.
In the 2024 election, for instance, 57% of voters were non-college grads and just 43% were college grads, according to AP VoteCast. So Biden’s high-profile effort to cancel student debt did precisely nothing for at least 57% of voters.
About 100 million Americans have a college degree , and about 57% of them have paid off their student debt or otherwise covered the cost of their education. Meaning they, too, got nothing from Biden’s debt relief, leaving these policies targeted at roughly 40 million student borrowers. Data through Monday showed there were just over 145 million votes cast in the presidential election.
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Some borrowers who paid off their loans or worked their way through college may also feel resentful about government handouts meant to let other borrowers off the hook.
Taken together, it’s easy to make the case that Biden devoted way too many resources toward appeasing student loan borrowers at the expense of others who could use more help.
Student debt relief is expensive.
Biden’s full relief plan would have cost at least $870 billion , which is roughly equivalent to a year’s worth of national security spending. And Biden would have done that by executive order alone, which would have been an extraordinary evasion of Congress, which is supposed to direct all federal spending through legislation.
Non-college grads can fairly ask, what about me? Where’s my relief plan?
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Biden would answer, with some justification, that he’s done a lot to help working-class Americans.
His 2021 infrastructure law will provide thousands of blue-collar jobs for years to come. Same with his 2022 green energy and semiconductor laws , which have already generated a boom in factory construction .
Biden is the only US president ever to walk a picket line, and he has insisted on union protections in many of the bills he has signed and in the regulations he has imposed.
Still, there’s a huge difference between Biden’s hard-fought and highly visible efforts to cancel student debt now and policy provisions deep in the subtext of legislation meant to help blue-collar workers like the CHIPS Act's slow-acting, extended-release prescription.
Student borrowers can at least see Biden fighting for them. Many working families, meanwhile, hear the promises and wait.
Democrats are beginning a long autopsy of the 2024 election meant to determine how they lost touch with a majority of voters.
They might start by reexamining policies that exclude the majority in the first place. If you want to do some group of voters a favor, make sure there are enough of them to help when the next election comes around.
Rick Newman is a senior columnist for Yahoo Finance . Follow him on Twitter at @rickjnewman .
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