Who gets to be a student loan expert?


If a person spends time reading about debt forgiveness in the mainstream press, they will meet Adam Looney. A former member of the US Treasury Department during the Obama administration, he is often called upon to counter the moral and political arguments that favor the cancellation of a large federal debt. Recently, he was quoted as saying that there is little legal basis for federal cancellation and that loan repayments will become easier when they resume after their pandemic-era hiatus, given that people have accumulated savings. More recently, however, he has focused on a rather extreme extension of the conservative argument that broad loan forgiveness favors the wealthy: A recent paper Looney wrote for the Brookings Institution, a think tank, argued that the broad cancellation proposals were “regressive” and racial divides still entrenched. To make this point, the economist argued that the “increased earning power” of a degree was akin to a fixed asset, like a house. (Never mind that it is impossible to sell a diploma for real money). , given the wage disparities between whites and people of color, the latter group would benefit less. The paper was naturally picked up by right-wing media even though it was described as imperfect by leading student debt experts who have challenged the obvious false equivalence between a degree and a house.

Looney’s main post is like Executive Director of the Marriner S. Eccles Institute for Economics and Quantitative Analysis, a division of the University of Utah partially funded since 2017 by annual grants from the Koch Foundation. The argument that canceling student debt would increase the wealth of already well-off people at the expense of low-income families is popular with talking heads linked to the political right. For example, Beth Akers, who has often argued that debt cancellation is not “progressive,” is associated with the American Enterprise Institute, a right-wing think tank; Sandy Baum, recently quoted in Atlantic for claiming that debt cancellation is a “gift” to “people who have a certain privilege” publishes with the Lumina Foundation, which itself has controversial ties to the lender Sallie Mae.

“It really distorts the political conversation,” said Astra Taylor, co-founder of the Debt Collective, the nation’s largest debtors’ union. “People hear these arguments and think these people must be liberal.” And where there is a clear incentive for right-wing lenders and lenders to discourage definitive action on student debt, there is less money circulating to counter their preferences. Recently I spoke to a leading debt expert who told me that there are “important voices that cannot participate at this time because of the influence of money in space” , describing a “small group of funders” responsible for think tanks and institutes: “At times when people speak out in favor of debt cancellation, the hammer falls.

Absent the political will to sign an executive order, forces like these will shape any student debt reform, even in relatively innocuous places. Committee sessions are only the beginning of a rule-making process, and as anyone who has ever made a decision by consensus can tell you, it is not an exercise that facilitates bold action between disparate groups. But the distinction between informed policy-making and lived experience seems particularly blurred both here and at the national level. Who has more expertise on predatory lending than someone who owes a defunct institution half a million for 20 years? And who will represent their position if they are not allowed to participate?

* This article originally misstated the colloquial name of negotiated regulatory committees.


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