I agree with the WaPo editorial board that cancelling debt for people who out earn their non-college peers by 50%, is regressive.
But it's probably the only middle class relief left that can be done through executive action so I guess I support it.
But the Biden administration chose those cutoffs (apparently out of thin air). Why $125/250K? Why are people making $60k/yr going to subsidize higher education for people making $120k/yr? They are going to get to live with those decisions for the next two elections. Presumably they will get attacked from people on the left for being regressive and people on the right who just hate government handouts. The only people who will be left will be self interested moderates. Are there enough self interested moderates to win an election?
I'm guessing someone did the political calculus and decided it was popular enough to be worth it. It did poll pretty well.
Setting the income limits lower is sticky because on average, college grads do tend to make more money. So setting it too low doesn't make a splash. While I do think it's regressive, and not what I would have done with a quarter trillion dollars, I do think college debt is bad. Even if you're doing okay income wise. It delays homeownership and starting a family. Both of which make individuals happy and are pro-social. So from a misery reduction standpoint, this is good.
I'd almost compare this to DACA. DACA isn't comprehensive immigration reform, which we need, but has proven extremely difficult to get through congress. DACA helps an already privileged cohort (people brought to the USA as kids) while leaving a less lucky cohort (refugees at the border) in the cold. But it is an unambigously good thing that can be accomplished through executive action. So another thumbs up from a misery reduction standpoint.
FWIW I think the odds of poor people "paying for this" in any way are slim to none. Taxes won't be raised on them, and while forgiving debt is inflationary, it will be spread out over many years (i.e. the payments that debtholders would have made will now go into the economy on a schedule that roughly lines up with their would-be loan payments). And it's worth noting that the most recent major bill passed reduces the deficit by a similar amount to the cost of loan forgiveness. So between the IRA and this executive action, we're taking about as much out of the economy through taxes as we're putting in through tax credits and loan forgiveness. My guess is that on balance, it's a tiny bit inflationary since you're taking money from rich people and giving it to poor and middle class people. But I don't think it'll be much, and it will ultimately be smashed by the Fed anyway.
Most voters are self interested, and it's the government's job to make them happy. The Biden coalition is very broad and cares about a lot of different stuff. Just off the top of my head, and aside from "the economy" and , we got
-COVID
-Restoring civility to the White House
-Healthcare
-Climate Change
-Student Loans
-Racial Justice
-Making the rich pay their fair share
I think it's now fair to say that everyone in that coalition has gotten at least a little of something they wanted. Makes sense to be from a purely politics perspective. Now it's up to the Dems to sell their base on that.