Student Debt Decision

I saw a commercial the other day which showed a series of blue collar workers complaining about Biden's decision to forgive some student debt.  At the end, it encouraged us to contact our legislators and ask them to tell Biden not to bail out rich kids.  Since, in my last post about student debt, I mentioned that my own children and son's wife would benefit from any debt relief (my post predates Biden't announcement), I thought it prudent to text my children and daughter-in-law to tell them that they were rich, just in case they were living some type of middle class life.  

Here is a link to that other post.

https://wurdsfromtheburbs.blogspot.com/2022/05/student-debt-crisis.html

I did some research on the sponsors of that ad, American Action Network.  They are a conservative issue advocacy group aligned to the Republican Party, which was formed in 2010 by Fred Malek and Norm Colemen as a 501 organization.  For those who don't know it, a 501 organization is a non-profit organization, many of which pay no federal taxes and do not have to disclose where their donations come from.  One of those dark money organizations (and yes, I know Dems have them too).  

Fred Malek (who died in 2019), worked for a number of past Republican presidents, and supported the more recent GOP presidential candidates (although, curiously, not Donald Trump).  He made his fortune via the Marriot Corp, Northwest Airlines, and a couple of private equity firms.  He received his bachelor degree from the US Military Academy and his MBA from Harvard.  While his childhood was certainly not of the silver spoon variety, his two children were certainly rich kids, probably more so than mine.

Norm Coleman has a curious bio.  Participated actively in the counter culture movement, (claimed to have been at Woodstock), a law school graduate, was elected mayor of Saint Paul, MN, as a democrat.  But switched to the GOP in 1996, and continued to be the mayor of that city. In fact, he was the last GOP mayor of St. Paul.  Also served as Minnesota's senator in the early 2000's. Like Malek, someone most people might label "elite": an attorney who has held a few elected offices.  

Not withstanding that there are hundreds of 501 organizations who take donations from very rich people to buy ads to advocate for their beliefs, if we assume that this conservative organization is against providing relief for young people with high student debt, why would they go out of their way to phrase this as a rich vs middle class issue, especially when we know that many of the donations to this organization come from very wealthy individuals? And that, chances are, they don't pay any federal income taxes.

Also, since the income level stress test for student debt relief is $125K for an individual and $250K for a couple filing together, aren't those numbers reflected of, at best, upper middle class citizens.  Perhaps I am off base, but I consider the definition of a rich kids as someone coming from a family with millions of dollars.  A family where the kids don't even apply for federal student aid.  A family where the kids most likely don't go to state schools, certainly not community colleges.

Also, while $10K is a nice chunk of money, at least for my kids and those I know who have graduated from a 4 year college, most graduates start with at least $25K in debt.  As far as I can tell, the data seems to suggest that perhaps 30% of those who receive this relief will have their debt completely paid off, while another 20% or so will see their debt halved.  That is a far cry from the ad's suggestion that Biden's plan will eliminate everyone's student debt.  Also, let's not forget that if a student who started with $25K plus in debt, paid $300 a month for 5,6, 7, 8 years, paid off the majority of their debt and is really only getting student loan interest relief.  That is the case for my son who graduated in 2014.  Finally, anyone who has $50K or more in debt, while certainly grateful, is far from student debt free.

If you read my previous post, I talked about solving the root causes of this problem, one of which is the high cost of college education. Sadly, while Biden's plan does not address this, it does alter the payment rules so that no young adult has to pay more that 5% (I believe) of their income towards their student debt, and can seek debt relief if they pay the minimum for 10 years, which kind of links to my idea of loaning this money with very little interest, and/or focusing on debt interest relief once the principle is paid.

But again, I return to the question, why does the GOP, a party with a reputation of catering to the rich, seek to drive a wedge between the blue collar workers of America and rich kids? 

Here is where I see the insidiousness of this effort by organizations like American Action Network (AAN).  First, they know most Americans will not do the research of who is sponsoring this kind of ad, instead assuming it is some kind of organization that advocates for blue collar, everyday citizens.  Americans are notorious in their lack of attention to details, which AAN would know.  This reluctance to drill down on issues, leaves far too many Americans vulnerable to information which, on its face might resonate, but when researched results in questions such as the one I posit above. 

Second, I think it reflects another part of the overall plan to paint college graduates as elite, people who do not work, people who do not reflect the values of "real" Americans, even though those very people who run and donate to these organizations are themselves, elite as defined in this way.  Remember, Senators like Ted Cruz and Tom Cotton who also oppose this plan, are Ivy League graduates.  But they know, like American Action Network, that the demographics  of recent elections show that voters without college education vote GOP more than DEM, and those with college degrees the opposite.  So, first they pretend to be on the side of blue collar voters, even though they themselves are far from blue collar, then they pass tax laws that overwhelmingly favor the rich while providing crumbs for the rest of us, all the while pretending that the fault lies in the elite who are out of touch with the common man. 

But ultimately, what really upsets me is that this kind of attitude, being against federal assistance for others when it doesn't help you, in this case, non-college attending citizens, reflects the level of selfishness that seems to be so prevalent in our country.  This "where is my share" disease, yes, like a virus I call it a disease due to its ability to spread from person to person, is fast becoming our national motto.  Like America First, it tells everyone that unless a policy or program helps me, I am against it, even despite the fact that it most likely benefits a niece or nephew, or a fellow church goers child, or the relatives of your co-workers.

The fact is, there is no such thing as a government program that helps everyone.  We can certainly debate if our tax money is being used most efficiently, but that is not the "don't bail out rich kids" message. Do we scuttle the child tax credit because not everyone has children? Do we cease spending money on mass transit systems because most people don't take the bus or train? Do we cancel the mortgage interest deduction because not everyone owns a home? Do we end school lunch programs because some people are able to provide their kids with lunches? When do we stop worrying about what we aren't getting, and appreciate those programs that help us, or be grateful that our health and circumstance and efforts have resulted in the fact that we don't need assistance, but know that others were not as fortunate.

I recently had a discussion with a neighbor, family man with 2 young children, who was lamenting about the cost of health care insurance.  That in itself is a fair discussion, and we both have had many examples of how health care costs have skyrocketed, yet we also know that a lot of that cost goes to insurance companies, not to medical providers.  We shared many complaints.  

But one complaint we did not share was the problem of having to pay for health insurance even though he was healthy. Now, clearly, as an older adult, I value health insurance much more than a young man would. I am sure his attitude will evolve when he is 60 years old. But for now, I tried to balance his concern over this "wasted" money with the idea that perhaps he should be happy that he is healthy, and that he doesn't need to make use of his insurance all that much.  Sort of like, I am not upset that I paid my life insurance premiums for 30 years, but never got to use the service, because I didn't die. Isn't it better to have insurance and be healthy, than feel you are getting your money's worth because you are sick?

It is bad enough when middle and lower class Americans are jealous of a program which helps some other person in their economic status but not them. But seriously sick when organizations such as AAN, organizations funded and run by wealthy people via a tax law that allows them to raise and spend money without paying taxes, sponsor ads that attempt to drive a wedge between Americans who should be working together to address the economic inequality that has rewarded those AAN affiliated people, and penalized the majority of us.  Remember, about 90% of Americans earn less than $125K, so we should be happy for those in our boat, even if it is not us personally, because it is "our" boat.  Please keep that in mind when you see TV ads sponsored by dark money organizations run and funded by the rich, that tell you that you should be against assistance to people who need help. It is those people, the people who earn middle class wages and purchase middle class products and take middle class vacations that are most like you. When you protest programs that help people more like you, you are falling into the trap of the rich who can use their money to twist an issue and take advantage of your needs by fooling you to believe that helping someone else takes money away from programs that might help you. They don't want any program to help any of us, and until we realize that, we will continue to vote against our best interests.