Bernie Sanders is proposing to forgive all student loan debt, an outstanding balance of about $1.6 trillion. Lots of people have pointed out flaws with this idea, but Matt Bruenig has one of the simplest explanations for what’s wrong with the Sanders proposal:
Thus it appears that the universe of people selected for this program is both over-inclusive and under-inclusive. It is over-inclusive because people who graduate from Harvard’s MBA program in 2021 will receive hundreds of thousands of dollars of debt relief (though, strangely, people who enroll in that program in 2022 will receive nothing). It is under-inclusive because people who drained $50,000 off their net worth to pay for an undergraduate degree at a public college — but who do not currently carry student debt — will receive no reimbursement for their ongoing financial suffering.
$1.6 trillion is a lot of money. If we’re sticking solely in the education world, that would buy a lot of Pell grants for poor students or slots for Head Start or universal pre-k. Heck, the federal government could wipe out all state pension debt for that kind of money, which would translate into boosting teacher salaries by an average of about 12 percent.
Maybe Senator Sanders is so attached to the idea of universal programs that he just doesn’t care about how well they target benefits. Maybe I’m missing the point, but if we’re going to invest that kind of money, I’d prefer we target it to individuals who need it the most.
–Guest post by Chad Aldeman