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Melissa Harris-Perry: Welcome to The Takeaway. I'm Melissa Harris-Perry, and it's good to have you with us. In August, President Biden finally made a long-awaited announcement. The federal government will offer some debt relief for federal student loan borrowers.

President Biden: All this means people can start finally crawl out from under that mountain of debt to get on top of their rent and their utilities to finally think about buying a home or starting a family or starting a business.

Melissa Harris-Perry: Now, the policy doesn't affect private loans and it doesn't apply to those making more than 125,000 a year, but federal loan relief of $10,000 and an additional $10,000 for those with Pell grants is meaningful for millions as an approximately 43 million American borrowers and it's worth noting that President Biden didn't just point to those borrowers. He also said-

President Biden: When this happens, the whole economy is better off.

Melissa Harris-Perry: But not everybody is feeling like we're all in this together. Senator Mitch McConnell called the move "student loan socialism" and said it was a slap in the face to working families who paid down debt or served in the military to fund their education. We wanted to know how y'all are feeling about this proposed student debt relief.

Dave: This is Dave in Los Angeles County. Forgiving $10,000 for people in poverty seems all right, forgiving those who earn middle-class incomes and have no demonstrated needs hurts by adding to the deficit and inflation. I hope the courts stop it.

Lily: Hi, my name is Lily Costco. I'm from Pasadena, Joe Biden, canceling 10K of debt means that I'm going to start saving towards buying a home. I'm making a vow to invest the money and then do the adult thing mentally. It just is a big deal to have a little bit of chip off of it.

Rose: Hi, my name is Rose and I'm calling from Waldport, Oregon. I feel it's unfair to every other person who's taken out a student loan or any other loan for that matter to have a select group chosen, to have their debt forgiven. I also firmly believe it's a cheap grab for votes in the midterms and once you set a president, you better watch out.

Melissa Harris-Perry: Now, to be fair-

?Speaker: to be fair.

Melissa Harris-Perry: -debt forgiveness is something the federal government has done before, both in our recent past and in our longer history. President Biden even pointed to the PPP loans, which helped keep small businesses afloat during the pandemic.

President Biden: Just as we've never apologized when the federal government forgave almost every single cent of over $700 billion in loans to hundreds of thousands of small businesses across America during the pandemic. No one complained that those loans caused inflation, a lot of these folks in small business are working in middle-class families. They needed help. It was the right thing to do.

Melissa Harris-Perry: The Biden administration also took the offensive on social media. The White House twitter account started tagging prominent Republicans who were outspoken against student loan forgiveness and pointing to the hundreds of thousands, sometimes even millions of dollars in forgiveness that these very same lawmakers had received from the PPP process. Here with me is Julian Zelizer, professor of history and public affairs at Princeton University. Julian, thanks so much for joining us.

Julian Zelizer: It's nice to be with you. Thanks for having me.

Melissa Harris-Perry: Okay. Help me to situate president Biden's announcement about student loan relief within a broader historical trajectory. One, have we seen this debt relief before?

Julian Zelizer: Well, I think there's two trajectories. One is a little different, it's federal support for education which has been a big part of American policy since World War II. Whether it's subsidizing or providing funds to university or Pell Grant loans, which help low-income families. Then there's this other trajectory where the government, in many ways, forgives or helps ease the problem of debt.

One clear example bankruptcy laws where we've had federal laws and state laws to help Americans and businesses who find themselves overwhelmed by debt. This is a very established part of our legal and public policy system and so you can connect that kind of debt release a little bit to what we're seeing with student debt.

Melissa Harris-Perry: Yet, somehow those two trajectories feel like they have a really different resonance within public discourse. Let's start with the federal assistance for education and particularly higher Ed. It does feel like the public opinion, acceptance of that is quite different than saying you've incurred debt and now we will forgive it. Even if, in fact, the effect is very similar.

Julian Zelizer: I think that's right. I do think there's more sympathy toward students who enter into an education system where the costs are just astronomical and where a student is not carelessly spending money or making bad decisions. They're essentially trying to invest in their future. I think there's more public sympathy towards students who are struggling under those conditions and it's something many American families can be sensitive to. They go through it, they're facing those costs as well.

I would add, there's been a lot of bipartisan support for this kind of debt relief in the past. In 2007, President George W. Bush, a Staunch Republican moved forward with debt relief both for income-related matters and also for students who wanted to go into public service. I think there's just more sympathy toward the student who can't pay their bills toward someone who's lost their money because of business decisions or their spending decisions.

Melissa Harris-Perry: Let's talk a little bit about this broader effect. I think we've heard a lot and we've talked here on The Takeaway about the ways that debt relief has this important effect for an individual household, but how does debt relief help the broader economy? What difference does it make to me if I've paid off my student loans, by the way, I have not, but what difference does it make to me if I've paid off my student loans for someone next door to get debt relief on theirs?

Julian Zelizer: Well, obviously, in terms of economic effects, that money can go into different kinds of investments. I think policymakers are hoping that someone many years after college can use their money, not simply to keep paying off debt but to invest in a home, to make certain kinds of expenditures that would have a good macroeconomic effect. It's also just a disincentive. The idea of creating economic disincentives to education in the era 2022 where education is so important to the functionality of the economy, to the strength of industry just seems like really a missed place way to deal with higher education.

The effects are more people might be comfortable taking the chance of going into college or the university. Then you feel the effects of that because you have a more highly educated workforce. There's all kinds of ways in which this isn't really about the individual, it's about society. I think that's part of what the Biden administration has in mind.

Melissa Harris-Perry: That notion that this is about society, not just about the individual was also an enormous part of the discourse, both in the economic downturn of 2008, the idea of too big to fail. We've got to save these individual businesses, not so much because of the businesses, but because they undergird, underpin the us economy. Then, of course, we heard that very similar arguments about the need for relief during the COVID pandemic, particularly during that early part of quarantine. I'm wondering if this is all politics or if there is a way to actually indicate the relative expediency. In thinking of individual students as too big to fail or students as a class versus thinking of private businesses that way.

Julian Zelizer: Well, we have two different ways of thinking of those two different groups. I think, politically, often you hear from opponents of student debt relief, they are people who have no problem when the federal government or state or local government helps trouble businesses. That's an example in 2008 when the federal government, again, under President George W. Bush, a Republican put forward this policy to buy mortgage back securities and bank stocks when all these firms were failing.

The idea was you can't allow them to fail because it's not just about those firms, it's about society more broadly. I would add, we do it in a subtle way. The whole tax break system often is a way to relieve either businesses or individuals, often high-income or middle-class individuals is some of the stress of debt. That ranges from the home mortgage interest deduction where the federal government is basically subsidizing part of the debt of home ownership.

The idea is it's good for the country to have home ownership to capital gains losses, which the tax code helps to alleviate. We don't think of it's often presented with students that somehow they're getting a free ride or getting some benefit they don't deserve but it's part of our public policy where there are areas that the government tries to tackle this because there's a benefit for all. I think with students, it's a very clear case. We want education, we want people in higher education and we don't want them facing the weight of those costs for 10, 20, 30 years forward.

Melissa Harris-Perry: I'm wondering, Julian, about precisely this collective discourse, what we want. We want people to own homes because it's good for the nation. The notion I could spend, we could just spend the rest of the day talking about the mortgage interest deduction. The ways that redistribute wealth upward but also right, the ways that it has these positive benefits. Is part of what we're seeing here in the anxiety and response, is it something more than simply partisanship in a midterm election year? Is this about a shift in our national culture or public discussions about the idea of a we?

Julian Zelizer: It's too early to tell and some of it will depend on the direction politics flows both after the midterms. That will be the first register for a lot of politicians of how does the country see this program. Is there a sense of the we or is this really fall under the rhetoric we've heard since the 1980s of government handouts and we don't know which way the politics flows, but public opinion so far suggests there is a sense of we, there is a sense that having the government provide really, what's just a partial subsidy for the enormous costs that students face is good for the collective.

It's a good thing for students not to face this kind of debt as a society. I would also say when President Lyndon Johnson was in office, he pushed a lot of federal education programs from head start to federal support for elementary education. One of his arguments combined the eye, meaning he argued that if the federal government provided support such as education, it would help individuals become self-sufficient in the marketplace and in society.

They were actually interconnected. You couldn't have one without the other. There's a chance that one of the effects of the Biden administration through all the policies we've seen since the American Rescue Act is to build support for that conception of what government should do and how we should think of each other in terms of obligation and support.

Melissa Harris-Perry: All right, Julian. Let's take a quick break. More when we come back. You're back with The Takeaway. I'm Melissa Harris-Perry. We're talking with Julian Zelizer from Princeton University. We've been talking about President Biden's student loan debt relief in the context of US history and trying to think a little bit about what this signals. I want to do a couple of things with you, Julian.

I want us to think about political strategy and whether or not political strategy is different in this current moment than what has been historically. Senator Romney suggested that this was an attempt to bribe the voters. I'm wondering how policy actually does work to move or motivate voters, especially in midterms. I'd love to think that we vote on policy, but do we?

Julian Zelizer: It's unclear. I think always, historically, there's not always a direct connection between what an administration and Congress produce with public policy and what drives midterms. Often the midterms turn into some mandate or response by the electorate toward how a president is perceived and how the party in power is perceived.

That doesn't always correlate with policy A or B.

Often, in midterms, people react against policies that turn out to be very popular. I think that's something the Biden administration probably has in mind. Obama faced this in 2010 where the Affordable Care Act, the economic stimulus all became a way Republicans rallied against the president even though those programs turned out to be very popular. Today, in this year, I think there's two added challenges. One is because of polarization, it's just very hard to move people even if a policy is popular, they're still going to come home.

For example, in a red state to the Republican party even in their community, they say, hey, that student debt relief sounds pretty good. Finally, today, unlike 30, 40 years ago, we live in a really broken information ecosystem where the facts on the ground are not what a lot of voters hear or learn about.

When Senator Romney says that, it's going to resonate, it's going to circulate in a lot of social media, TV media. It's very hard for the administration to just say or Democrats to say, that's not really what the policy does. All that bucket of factors can maybe mitigate some of the benefit Democrats expect from student loans going into the midterms.

Melissa Harris-Perry: Some critics are quite concerned that this could have a negative effect on increasing inflation. Again, historically, has this kind of debt relief by the federal government, whether in education space or in a private business space actually had that effect on inflation.

Julian Zelizer: No always. There are times it's connected in 1841. For example, there was federal debt relief, which is one of the famous moments of bankruptcy law. Some people connect it to the economic problems that followed but some of these other examples where there is relief for these kinds of debts, not just student debts it doesn't translate into inflation because the debt is so astronomical.

It's not as if that money is always going to go into the economy. It's probably just going to be saved in many cases and it can be used simply to transfer and relieve other amounts of debt. In this case, it's not as if the government is forgiving student debt, they were forgiving some of student debt. That was the compromise. My guess is many students are not going to go on a spending spree when they have this money. I think economists, I'm not an economist, but they're debating it. I don't think there's a consensus that this is automatically inflationary at all.

Melissa Harris-Perry: I want to go back to your point about simply the cost of higher Ed and the value of having a more educated populous, the collective value there. Rather than addressing this question on the back end after the debt has been incurred and then trying to make decisions about how much of it to relieve, are there proactive ways that the Biden administration could be looking forward to making college much more affordable?

Julian Zelizer: Obviously, and I teach at a private University, but one answer is always before us. It's the support for public Universities. We have a very extensive public University system, states throughout the country have many different levels of educational institutions from big Universities to community colleges, which are really an essential part, I think, of education for many Americans, and the more that they have been hurt over the past decade, they are struggling to maintain funds.

They are struggling to maintain facilities, and this is a place, I think, frankly, all levels of government should be investing, because that's a great option. Whatever the Biden administration can or can't do about a private University, that's about public funding and that should be a priority so that whatever's going on with private Universities, now, that option is always available, low-cost, quality education to Americans in every state. I think there's a lot of support for that community colleges are great example of where I think there's a lot of public interest and more funding and more support because that's a pathway not just education, but frankly, to economic opportunity.

Melissa Harris-Perry: It probably is much too early to tell. When do you think we will be able to tell what the story of the Biden administration relative to this policy is? Is this something that we will have a sense of its success or failure primarily in the midterm election results? Or is it a much longer historical trajectory for us?

Julian Zelizer: The historian's answer is always both. I do think you start to get a gauge with both the midterm and frankly, the next presidential election, where you'll start to see, and we will start to understand what issues are playing out in a way that are politically problematic for the administration and the Democratic Party.

Well, there are areas where Republicans are basically running into a wall as they try to attack the administration. I do believe, in the next couple of years, you get to see a little bit of where the politics is moving and where something like student debt relief fits into that story. As we see, for example, with the Affordable Care Act, it took many years before Americans became familiar with the policy and comfortable with the policy and then the politics shifted very much. The Affordable Care Act is not simply something Republicans call for repealing anymore, very popular in many parts of the state, and we see this over and over in American history. Social security, it's created in 1935.

It's not really until the 1950s that you start to see Americans in Republican and Democratic districts telling their legislators back off of this program because we like it. I think both are really the answer and the administration would like the answers obviously sooner rather than later

Melissa Harris-Perry: Julian Zelizer is professor of history and public affairs at Princeton University. Thanks so much for joining us today.

Julian Zelizer: Thanks for having me.

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