
Free Money for Me But Not for Thee
Blowback to student loan forgiveness from Republicans who had their PPP loans forgiven sends a fraught message to voters ahead of the midterms.
The reaction to the news was fast and furious. Within hours of President Joe Bidenās August 24 announcement that he is forgiving some federal student debt, U.S. Rep. Marjorie Taylor Greene, a Republican from Georgia, appeared on NewsMax to vent her spleen about it:
For our government just to say, āOK, well your debt is completely forgivenā . . . itās completely unfair. And taxpayers all over the countryātaxpayers that never took out a student loan, taxpayers that pay their bills and maybe even never went to college [and] are just hardworking peopleāthey shouldnāt have to pay off the great big student loan debt for some college student that piled up massive debt going to some Ivy League school. Thatās not fair.
And yet, as the Biden White House gleefully pointed out in a tweet sent the next day, Greene has benefited personally from a federal government program that included loan forgiveness:


Clearly ready in advance, the White House also dinged other Republican members of Congress for their duplicity on the question of loan forgiveness. āThis is the best White House trolling ever!ā declared one satisfied Twitter commentator.
The Paycheck Protection Program, created during the Trump administration in response to the pandemic, offered low-interest private loans to help businesses and nonprofits retain staff and continue paying them through COVID-related closures. Employers who kept their worker counts and wages stable could have these loans forgiven, interest included. They were literally being paid extra for doing what they might have done anyway.
Now that the heat of the initial debate has dissipated, itās worth having a look at the arguments Republicans have levied against the programāas well as their own acceptance of government money through PPP. Is their debt relief any more or less justified than that which is now going to relieve student loan debt? And, as we head into the midterms, what is the political message they want to convey to the people who stand to benefit from student loan debt forgiveness?
To recap, hereās a rundown of some of the Republican lawmakers who benefited from PPP loans:
Marjorie Taylor Greene and her husband, Perry Greene, in April 2020 received a $182,300 loan from the program for the familyās construction business in Alpharetta, Georgia. In the end, they received loan forgiveness of $183,504, a total that includes nominal interest.
Rep. Vern Buchanan of Florida got $2.6 million in PPP loans for two car dealerships he owned before he took office in January 2021. Both were forgiven. When Biden made his announcement, Buchanan fired off a tweet: āBidenās reckless, unilateral student loan giveaway is unfair to the 87 percent of Americans without student loan debt and those who played by the rules.ā
Oklahoma Rep. Kevin Hern of Oklahoma, the co-owner of a management company that operates a number of Tulsa area McDonaldās restaurants, received a $1.07 million loan, none of which had to be paid back. Hern posted on Twitter, in response to Bidenās announcement: āTo recap, in the last two weeks, the āParty of the Peopleā has supercharged the IRS to go after working-class Americans, raised their taxes, and forced them to pay for other peopleās college degrees.ā
Rep. Markwayne Mullin of Oklahomaās plumbing and contracting firms received four PPP loans totaling almost $1.5 million. āWe do not need farmers and ranchers, small business owners, and teachers in Oklahoma paying the debts of Ivy League lawyers and doctors across the U.S.ā he tweeted in response to the presidentās announcement. āThis places undue burden on those already suffering due to the weight of Bidenās failed economic policy.ā
Rep. Greg Pence of Indiana, brother to former Vice President Mike Pence, didnāt have to repay the $79,441 loan that went to his antique malls. On the day Biden announced his loan forgiveness program, Pence tweeted that it forces Hoosiers to āfinance someone elseās college education,ā adding that it would āpunish countless Hoosiers by forcing them to foot the bill for someone elseās agenda.ā
Rep. Mike Kelly of Pennsylvania pocketed $974,100 in PPP loans for the four car dealerships he owns in that state. He tweeted, āAsking plumbers and carpenters to pay off the loans of Wall Street advisors and lawyers isnāt just unfair. Itās also bad policy.ā
Across the board, Republicans who happily accepted a helping hand from the federal government have leapt to stir up resentment against Bidenās plan for student loan debt forgiveness.
The farming equipment company owned by Missouri Rep. Vicki Hartzler and her husband received a $451,200 loan that it did not have to pay back. She tweeted: āThe 210 million Americans who do not have student loans should not have to pay for those who do.ā
A die-casting company founded by the father of Rep. Brett Guthrie of Kentucky received a $4.3 million PPP loan that it didnāt have to pay back through the program. Five car dealerships owned by the husband of Rep. Carol Miller of West Virginia raked in a combined $3.1 million in Paycheck Protection Program loans. A car dealership in Fort Worth owned by Rep. Roger Williams of Texas got a $1.43 million loan. Rep. Matt Gaetz is a shareholder in Pensacola, Floridaābased Caregivers Inc., which benefited from a $475,932 loan.
In all, according to Roll Call, at least $13.7 million in PPP loans went ādirectly to companies in which members of Congress or their families are owners or employees.ā And yet, the idea of forgiving student loan debt strikes them as outrageous.
No one has done a better job of explaining the case against student loan debt forgiveness than Rep. Ralph Norman of South Carolina.
Norman, a sitting member of numerous companies which received $608,500 in loans, sounded off in a blog post reacting to Bidenās announcement:
Itās not fair. Itās not ethical. Itās probably not legal. And itās certainly going to make inflation even worse. But thatās not stopping this President from trying to do it. In fact, many liberals are saying $10,000 is not enough, and that he ought to ācancelā all federal student debt.
Norman is right: A lot of people believe that Bidenās delivery on his campaign promise to ease student debt does not go far enough. Key Democratic lawmakers, including Senate Majority Leader Chuck Schumer and Massachusetts Sen. Elizabeth Warren, had urged Biden to cancel $50,000 per borrower.
As it is, Bidenās plan allows borrowers with loans through the U.S. Department of Education who make less than $125,000 a year eligible for $10,000 in student debt reliefāor $20,000 if they received Pell Grants, which are awarded based on financial need. But some of those who receive these sums will still be tens of thousands of dollars in debt. Itās not as though the total amount of the loan is just completely wiped away, as it is for recipients of PPP funds.
And while student loan cancellation could spur inflation, reports CNN, āmany experts say the effect would be modest, because borrowers generally pay back their student loans over time. They wouldnāt receive a lump sum of money if some of their debt is canceled. They would instead be required to pay less money each month toward their student loan payments.ā (For this and other reasons, some economists even believe student loan cancellation will actually have a deflationary effect.)
Norman, in his blog post, adopts a salesmanās tone in laying out the case against canceling student debt:
Friends, debt isnāt just ācanceled.ā Whether itās the federal government or a private lender, you donāt just erase loans off the books. Whatās really happening here is the responsibility to pay back that money is being shifted from the people who borrowed it to you, the taxpayers.
Norman then sets out to show how āevery reason people cite to support this effort is quickly destroyed with logic.ā For instance, he says, there is the claim that āMost colleges are too expensive.ā Normanās analysis: āAgreed, but that is not a compelling reason why the federal government should take money from the majority of Americans who donāt pursue a college degree to pay for those who do!ā
It goes on like that, with Norman taking aim at arguments supportive of student loan forgivenessāincluding some he appears to have sourced from his own mind rather than public debate. For example, Norman blasts to smithereens the arguments that āPublic K-12 education is āfree,ā so college should be as wellā and āA college education helps people get better paying jobs, so the federal government should incentivize that.ā
Norman doesnāt think canceling student debt will stimulate the economy, as its proponents claim, but even if it did, so what? ā[W]hy not use taxpayer dollars to pay off everyoneās car payment? Or mortgage? Or credit card balance? Wouldnāt that also help stimulate the economy?ā The problem, in his view, is that ānot everyone has the same debts. So government paying off student loans would inequitably benefit people with those debts, leaving everyone else out to dry. Thatās not a moral use of taxpayer dollars.ā
Norman, in a tweet, directly addressed the argument being made by the White House and others that it was wrong to take PPP money and then criticize Biden for forgiving student loan debt. The PPP, he explained, āhelped people remain employed while the government literally shut down much of the economy. Only an intellectual clown would compare that to what Biden is doing now with student loans.ā
Hold my detachable red rubber nose.
The Paycheck Protection Program is a $953-billion component of the CARES Act passed in March 2020 and since discontinued. It issued 11.45 million loans totaling $790.8 billion and received $680.8 billion in forgiveness applications, $668.6 billion of which were granted. The program has been called āa lifeline that saved many small businesses,ā as well as faulted for its failure to distinguish between needy recipients and people including Jared Kushner, Khloe Kardashian, and Reese Witherspoonāthat is, folks who are already rolling in the dough.
āThe structuring on PPP was really flawed from the startāeven if you were wealthy, because that was the way that it was structured by the government,ā Carol Roth, author of The War on Small Business, told News Nation. āYou got a free pass.ā
Another downside was rampant fraud. According to one study by the University of Texas at Austin, 15 percent of PPP claims, or $76 billion, went to fraudsters who in some cases concocted phony businesses.
The White House has estimated that Bidenās plan to forgive some student loan debt will cost $240 billion over the next decade. An analysis from the Penn Wharton Budget Model at the University of Pennsylvania put the cost at more than twice that, or $519 billion. It says that adding other features of the program, such as loan forbearance and income-driven repayment, pushes the cost to $605 billion.
Even still, the cost of student loan debt forgiveness will be less than what was spent on the Paycheck Protection Program.
The Wharton analysis predicted that 75 percent of the student loan forgiveness benefit will go to households making $88,000 or less. Less than 6 percent will go to benefit those with incomes in the top 20 percent.
In contrast, a study published earlier this year by the National Bureau of Economic Research in the Journal of Economic Perspectives found that āthree-quarters of PPP fundsā went to the top 20 percent of households. The study also found that āonly 23 to 34 percent of PPP dollars went directly to workers who would otherwise have lost jobs; the balance flowed to business owners and shareholders, including creditors and suppliers of PPP-receiving firms.ā It branded the program āhighly regressive.ā
Of course, as The New York Times noted, the PPP loans āwere effectively designed to be forgiven,ā while the assumption with student loans is that they would be paid back. Also, the amounts received through PPPāan average of $101,000 in 2020 and $42,000 in 2021āwere āmuch higher than any one person will get from the student loan forgiveness program.ā
Yet as Bharat Ramamurti, a deputy director of Bidenās National Economic Council, expressed at a news briefing, āwe absolutely think itās a fair comparisonā between PPP and student debt.
āOur view is, why is there a double standard here?ā Ramamurti said. āWhy is it, from the perspective of Republicans, great to forgive a loan of up to $10 million to a business owner, but if we want to provide $10,000 or $20,000 in loan forgiveness for a teacher or a bus driver or a nurse, all the sudden itās socialism?ā
White House spokesperson Alexandra LaManna agreed:
Itās important to make clear that many of the same people calling student loan debt reliefāwhich will help the middle class and working families by giving them more breathing roomāa bailout for the wealthy had no issue with loan bailouts that benefited their own companies, and no issue with giving tax cuts to corporations and the wealthy.
The irony is that, for both initiatives, the argument could be made that the forgiveness of these loans is beneficial to the economy. The Paycheck Protection Program kept a lot of Americans from losing their jobs, by rewarding their bosses for not letting them go. The student loan debt forgiveness will be a shot in the arm for millions of people.
Yet the Republican members of Congress act as though a program that mostly benefited people like themselves, including themselves, was necessary and justified, despite known waste and fraud. At the same time, they regard cutting a break to lower-income people who sought higher education as frivolous and even immoral.
In both cases, they seem less interested in making honest assessments than in looking out for themselves and scoring culture war points. Thatās the brand they will be carrying into the midterm elections and beyond.