They believed so much that when one degree was not enough to pay off the debt, millions took on additional debt for more degrees. Reasonable people made decisions based on the available information at the time and all information from trusted sources pointed to “borrow.”
If you did not want to borrow, the cost of college narrowed your practical choices. You could attend a community college, join the military, be born to a wealthy family or not go to school at all. No matter your personal feelings about any of those choices, there were a lot of social norms about their relative value. We look down on community college education as unsuitable for the kind of high-wage, white-collar work that comes with prestige in our economy. And, in case you had not noticed, the United States has been engaged in military conflict somewhere in the world for much of these students’ lifetimes. That left two choices, only one of them practical: Don’t go to college at all. But the incentives to go are too numerous to make this a good choice for most people. That created a perverse set of incentives.
You can be forgiven for not knowing that the “go to college” refrain would have a darker side. But we should not forgive those who knew better. Policymakers knew by the 2010s that the train was going off the rails. For-profit colleges were preying on women like those who might have ended up at Bennett College. As the sociologist Louise Seamster told me on “The Ezra Klein Show,” they knew that Black debtors would likely never earn enough to pay off their college debt. They knew that poor immigrant and first-generation Black and Hispanic students were turning to their elderly parents and grandparents to co-sign for loans. We knew that Social Security checks would end up garnished as a result, throwing thousands of elderly people into the very poverty that the program was designed to prevent.
We knew that some people racked up six-figure debt for fancy law firm or medical jobs but that those with more than $200,000 in debt made up 2 percent of all borrowers. We knew that we had incentivized bad actors in the student loan servicing market. We knew that student loan debt was most expensive for the families who had the most to lose. And we kept offering the loans with the same cheerful promise: It’s worth it.
When you are scammed by a friend, it is a shame. When your country scams you, it is a fraud.
Those cautioning “go small and slow” on debt forgiveness — whether they did not rely on student loans because they were wealthy or they went to college when one could pay tuition working part-time jobs — resemble the people who make higher education policy who are suspicious of forgiveness because it smacks of government handouts. Their impulse is to tinker at the edges of the quicksand drowning many of their core constituents. Or, at their most generous, they will consider meager debt forgiveness with means-testing.
Means-testing is a way to measure for deservingness and it is the wrong ax for this woodpile. First, it is a bureaucratic mess, if it is even possible. The I.R.S. and the Department of Education don’t seem able to coordinate on verifying income to qualify those who pass the means-testing. There is also the issue of means-testing working as regressive. Social science has shown that means-testing is a roadblock for people who need relief the most. If you want to help the working-class people who carry debt, make it easy to cancel.
Means-testing is also just the wrong solution for this problem. The student loan debt crisis we created is a recent invention. We are not forgiving the debt because it makes us feel bad. We are forgiving this debt because, as designed, it negates the value of education. This debt crisis is the outcome of a set of foreseeable market forces and policy decisions. Every student who took on debt under those conditions did so under circumstances that made it impossible to make better choices. No one, not even graduates who now earn a lot of money, deserved odds as bad as the ones we created.