April, 2020
Washington – Congress will soon consider its fourth major response to the coronavirus pandemic. This one may include infrastructure spending, which is not only appropriate but long overdue.
Congress must also help the economy by helping millions in financial trouble because of burdens imposed on them by the cost of higher education. This was true before the Covid-19 epidemic and is even more obvious now.
When this subject has come up before, it has been described as student-loan debt relief. As such, it does not have the votes to pass, regardless of its considerable merit. There is also lack of unanimity among its advocates as to the form it should take.
The effort should be re-cast by looking at the obstacles that relief faces and adjusting accordingly.
A leading opponent is Senator John Cornyn of Texas, who explained his opposition in these words,
To say we're going to wipe away the debt is not fair to the parents who started to save for their kids' college even before they started walking or the college student who worked multiple jobs to graduate to work with little or no debt at all. Or decided to go to a community college at lower cost before they transferred to a four-year institution and found a way to mitigate or keep their debt manageable.
In earlier posts, I suggested that relief in the form of a refundable, means-tested Tuition Premium Tax Credit would largely address these objections. Basing relief not on amount borrowed but on the higher tuition premium faced by 21st century postsecondary students could provide bipartisan common ground sufficient to include relief in the next coronavirus bill.
Members of both parties understand that higher tuition is a disease of which higher debt is one symptom. Congress itself bears some responsibility for higher tuition, because of the increasingly obvious shortcomings of its programs under the Higher Education Act (HEA), so it is especially appropriate that Congress should act.
I would add another factor to the relief, a multiplier (125%, for example) for those on the front lines fighting Covid-19 in health care, food distribution, and the military, including veterans (who have been particularly ill-served by the HEA).
This relief, with the multiplier, would be effective not only in getting refund checks fairly into the hands of those who most need it, but would also send a strong signal of support to those who are heroically fighting the pandemic.
