Last year, I received an unexpected cheque from the taxman. The reason? I had successfully paid off the last of my student loan and as a result I had overpaid on my tax return. (UK students’ tuition fees are deducted at source alongside their taxes if they are salaried employees, or when they fill out their tax returns if they are self-employed.) I thought long and hard about what a milestone this was, my good fortune in being able to do this while still doing a job I love and how I could best use this windfall to invest in my future, before going out and buying a PlayStation 5.
One criticism of Joe Biden’s plans to cancel $10,000 of student loan debt for low to middle income graduates is that American graduates will, like me, think about their windfall, and then go out and stoke some good old-fashioned inflationary consumer demand. But it is possible, of course, that extrapolating from the behaviour of one affluent UK graduate to millions of American graduates on low and middle incomes is not particularly helpful.
The more useful political lesson runs the other way. Biden’s plan is what happens in a democracy once graduate voters become sufficiently numerous and electorally important that they can do what voters have almost always done: lobby for financial relief.