Student Debt Forgiveness

I think the hottest topic in the US last month was the Student Loan Relief Plan (not the Mar-a-Lago raid). I knew it was Senator Elizabeth Warren's one of the important agendas of the last presidential primary. I thought Biden took the idea reluctantly, and he would not make any actual motion to realize it. But it suddenly became a reality.

I was a bit doubtful at first; I thought this kind of one-time forgiveness could hardly be a good solution. But I got to think differently when I learned the details of the plan.

• The one-time $10,000 forgiveness is only for those whose annual income is below $125,000 (or $250,000 for households).
• The relief would be $20,000 for whom had received a Pell Grant.
• Not only the one-time clearance, but the plan also has an income-driven plan capping the monthly payment up to 5% of their income. So, basically, the plan incentivizes people who actually pay the debt.
• The plan forgives any loan balances under $12,000 after ten years of payments. It may sound radical, but I was surprised to learn that the current system already eliminates the loan after 20 years.

I read Susan Dynarski's NYT essay and realized how the current student loan system is dysfunctional. Now I got to agree that it wouldn't be a populist policy but an excellent way to remedy the devastating system.

However, it was also interesting to see people who objected or even showed extreme anger at the plan. They were not only MAGA Republicans (frankly, I was thrilled to see the Dark Brandon meems prevail.) but also those who had my respect. The basic argument seemed to be: why do they use "my" tax to give preference to others? For MAGA Republicans, the "others" would be the elite propertarians. But for some people, I might feel the hidden lines: the others who are inferior to me, who do not deserve it.

It made me revisit the topic of meritocracy. After reading "Tyranny of Merit," I had many cases of the grey area where meritocracy conflicts with egalitarianism. Affirmative action still has been a hot potato. Lowell High School's dispute on its admission policy led to the recall of its three school board members.
After contemplating those issues, I could have established my principle for it.

Meritocracy for the achievement,
and egalitarianism for the opportunity.

According to it, I think that schools can have lottery admission or take affirmative action - even though my daughter (as an Asian) gets a loss from it - because I believe education should be about opportunity. Even Malcolm Gladwell, who once said, "Success is not a random act," is now saying that the lottery-style election could change American politics.

However, I also agree that it wouldn't work easily. I think they (the Lowell board members, some prestige colleges, and even Chesa Boudin) failed because they naively tried to instate the ideal state. The reality was not, so the opportunity was scarce; it made everyone desperate. They cannot consent to the random/egalitarian rule. We don't have the abundance "yet."

So, I cannot agree more with Andrew Ng's tweet about student debt forgiveness. I hope this plan will be a good cornerstone for it.