I’m a Democrat, but I don’t fully support Biden student loan relief program. One of the big talking points around those in favor of relief is that people are so overwhelmed with student loan debt that they can’t buy homes, start businesses, or start families. This might be the case in some areas of the economy, but in finance – where some people will be covered by the $10,000 relief if they earn less than $125,000 or are part of a couple earning less than $250 $000 doesn’t make sense.
I have been in banking for over six years and have paid off my student loans in full. I have always paid my way. I paid for my education by working while I was studying and repaid a lot of my loans as I went.
When I got a job in banking, I continued to save and repay. I didn’t take vacations, buy expensive clothes, make-up and hand bags. I lived in cheap apartments out of town; I barely had any furniture!
Meanwhile, my classmates and my peers from the analyst class were spending money. They had several vacations a year. They posted their monthly $2,000 Sephora shipments on Instagram. They bought the designer handbags. I have over 10 friends who have used their student loan money to pay for plastic surgery.
Repaying my loans has not been easy. I definitely sacrificed to repay mine. But I came of age during the height of the post-financial crisis recession and so I was, and still am, terrified of losing my livelihood in financial services and being stuck with a mountain of debt.
People do not like those who repay their debts. They also don’t like those who argue that forgiveness is unfair. The vitriol is always framed as “you want other people to suffer like you did”. It’s a hypocritical framing: we don’t want other people to suffer, we just want our suffering to be lessened as well. The idea that people who have paid off their debts are swimming in money and luxury is not the case.
Of course, many people in banking end up paying off their debts sooner or later. Even if the kids are irresponsible the first two years, blowing up stupid things, the money is soon good enough to make the repayments.
If you can afford it, paying off a student loan makes sense. Whether it’s a liability or a cash back, the loan affects your net worth the same way. This is what makes repayment unfair: those who have repaid have had their net worth reduced; those who did not receive an infusion. And ironically, if the government is truly interested in creating a population that buys homes and starts families and businesses, then those committed to responsible repayments are the best beneficiaries of this infusion. Instead, there is no net worth restoration for them.
I am not against loan forgiveness in all situations. But the current plan does nothing to address the fundamental problem of affordability and access to education in the United States. It does nothing to help people who have hit their net worth pay off their loans because they didn’t want to end up in debt over time. And it makes no sense to pay off part of the loans of people who have just graduated but will have a high income in a few years.
If there is to be a student loan forgiveness plan, it needs to be looked at more carefully. It should also be more firmly targeted at millennials. We are the ones who graduated in the worst economy of their lives, whose incomes will be forever depressed, and who were forced to hide in graduate school just because there were no jobs. decent to have.
Matilda Levine is the pseudonym of an equity analyst in New York
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