During the first two years of the Biden presidency, we’ve seen a dramatic overhaul of the Public Service Loan Forgiveness program, an effort to create a more affordable income-driven repayment plan, and a proposal to forgive up to $20,000 of debt per federal borrower.
Republican lawmakers have largely opposed these moves.
Like so many other issues in American politics, the management of federal student debt has become quite polarized.
It wasn’t always this way.
Today we will look at how party views have changed over the years, why these changes happened, and what it means for borrowers.
Bipartisan Support for Student Loans and Borrowers
The federal student loan program was created in 1958 in response to the Soviet launch of Sputnik. It received bipartisan support and was signed into law by Republican President Dwight D. Eisenhower.
In more recent history, the Public Service Loan Forgiveness program was created with bipartisan support and signed into law by Republican President George W. Bush.
Today, there is almost no consensus between the two major parties on student debt issues.
Democrats have become increasingly aggressive with their proposals to help borrowers and make college more affordable. At the same time, Republicans have sought to prevent these programs and claw back existing resources for borrowers.
A Note from the Sherpa: The purpose of this article is not to “get political” or to tell people how to vote.
Instead, the objective is to examine how politics affect public policy and how borrowers can advocate for themselves.
A Changing Electorate
Historically, college-educated voters tended to vote Republican.
In the 1994 election cycle, 54% of voters with college degrees identified with or leaned toward Republicans, while only 39% supported Democrats.
In the 2020 Presidential Election, Joe Biden received the support of 61% of college-educated voters, carrying him to victory in a close election.
Since that time, the voter education gap has only grown. Voters with degrees are increasingly likely to vote Democrat, while voters without a college education are more likely to vote Republican.
The Chicken or the Egg?
Do more college-educated voters support Democrats because of their student loan policies? Or do Democrats have better student loan policies to keep their voters happy?
The answer is probably a little bit of both.
For student loan borrowers, the causation question doesn’t matter. The real question is, how do we get more politicians to advocate for student loan borrowers?
Student Loan Borrowers Need to Become “The Small Business Owner”
I’m not suggesting that all student loan borrowers need to start a business. Instead, I’m suggesting that student loan borrowers need the small business owner treatment from politicians and the electorate.
Both parties love small business owners. Politicians routinely call them the backbone of the economy. This treatment isn’t a surprise. Americans overwhelmingly prefer small businesses over big corporations.
It isn’t a stretch to think borrowers can achieve this goal.
Having a college degree makes someone less likely to rely on government safety net programs and more likely to contribute more money in taxes. On average, each college degree is worth $381,000 to the federal government. Americans that want fewer people on welfare and more people to pull themselves up by the bootstraps should be incentivizing a college education.
A better-educated America also helps us beat our international rivals. The original student loan program was a response to Sputnik and helped us win the space race. Today, Americans from both parties view China as a threat. If American innovation and ingenuity is the key to success, we should cultivate great minds for the next generation.
It’s time to remind people that higher education doesn’t just benefit the individual; it benefits everyone.