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I think the unpopularity is right. Unless we solve the issues that are making college unaffordable, simply wiping the debts (or a portion of the debts) simply makes the problem worse. The issue is that for skilled, non-labor jobs, college has become not so much a “nice to have” thing, but a requirement, in fact, it’s basically like high school was in the 1960s. If you want a good job and don’t want to be in construction, repair, or a chef or some other skilled labor— you have to go to college.
This creates a huge demand and thus makes the price inelastic. No one really looks at the costs or the interest rates beyond the choice between schools. You go, and if it costs 100K so what? You need the degree to even apply. And as long as college is the ticket to a middle class lifestyle, people will go, regardless of the cost. And of course as college becomes obligatory, and everyone gets a degree, the value falls. College in 1970 was a “wow, he must be a real go-getter. He must be smart,” thing. This was because they were relatively rare. Once college became the default, it’s not longer useful to signal intelligence or hard work (unless it’s a super hard degree), it’s too diluted to do that.
Making loans forgivable even if it requires a specific act of government to do so simply makes the problem worse. The forgiveness will be priced in. Why wouldn’t a school charge as much as they can get away with? If the dumbass students can’t pay, the government will. And on the student side, there’s no reason to economize here. If the debt gets bad enough, there will be a bailout. The employer side gets harder as well. Everyone other than the truly stupid have a diploma. So college is no longer enough. Maybe it will be internships, maybe we move up the credential treadmill, but college itself won’t be a ticket to those coveted middle class jobs. They’ll be a ticket to the line to buy a ticket to the middle class. And such a thing can stretch out quite a while because obviously people are willing to do everything possible to not be poor.
I'm reminded of the US healthcare tax system's incentives for employer-provided health insurance, which (a) encourages people to buy and use more healthcare than would be optimal and (b) encourages them to delegate decisions to a third party. IIRC, the system evolved as an accident of World War II, as employers and employees avoided wage controls. Now, it exists because middle class people think "Ah, finally a tax break that I get."
I can see the same dynamics playing out with student debt, with occasional debt jubilees giving politicians a chance to posture (Republicans for, Democrats against) before eventually forgiving the debt, just like with the Debt Ceiling. When organised and motivated, the middle class can be a very effective group, as suggested by Director's Law:
https://en.wikipedia.org/wiki/Director%27s_law
I'm extremely skeptical that the lower classes are subsidizing the middle class. I would need to see some numbers to back that up given that income taxes are progressive and most handouts are restricted by income.
Is this the math where they count tax breaks the same as welfare payments?
Moreso that money is fungible. A trillion dollars you spent on college-educated middle-to-upper-class young people is a trillion dollars you could have spent on the poor and the working class, and didn't.
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The claim is that the upper and lower classes combined are paying the majority of taxes, not that the lower classes are paying the majority of taxes.
I don't know if that's true, but there are tendencies that make welfare to the middle classes crucial to political success in most places today, even in ostensibly egalitarian societies.
That's like saying that me and Jeff Bezos combined have a net worth of $100 billion.
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The lower class pays a negative amount of taxes after accounting for subsidies
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