The People Who Already Paid Off Their Student Loans Are Pissed About the Potential for a Forgiveness Program
Last week, I published an article about how student-loan debt forgiveness has gained mainstream traction recently, and I was shocked by the number of former debt holders — some of whom I know personally, and know to be socially progressive — who came out against the idea.
Once thought to be a naive (and potentially dangerous) pipe dream, the idea of a one-time, student-loan debt forgiveness holiday — where all existing student-loan debt is wiped out, no strings attached — has attracted a growing number of politicians, economists and business leaders in recent years, especially as student-loan debt has risen to astronomical new heights.
But the movement has an unlikely enemy in people who have already paid off their student loans. And their argument is basically: “That’s not fair!”
On one hand, I can understand (if not endorse) a former debt holder’s resentment about recent graduates getting off scot-free, especially after they spent decades diligently saving money, negotiating raises and watching their debt balances gradually shrink. But it seems unbelievably childish and petty to want other people to experience the same financial and emotional hardship. After all, no one can better relate to the crushing burden of debt than someone who’s paid it off themselves.
Yet rather than spare others of it, past debt holders want them to suffer all the same.
This hostility is a textbook example of equity theory, a social psychology precept that states people feel aggrieved when they perceive others in their demographic receiving unearned preferential treatment. “Resentment, jealousy and an expectation of fairness are natural human emotions,” says Jay Finkelman, chair of the organizational psychology department at The Chicago School of Professional Psychology. “People think the amount of work you put into a system should be commensurate to what you take out of it. And when that gets violated, it creates discomfort for many people.”
Equity theory is probably most prevalent in the workplace, where people often feel that they’re under-compensated relative to their peers, Finkelman adds. It’s common for workers to believe they deserve more money, and their lazy coworkers don’t deserve nearly as much.
Equity theory, however, can also manifest in more toxic ways, specifically as arguments against progressive social movements. A prime example is the subset of U.S. immigrants who oppose amnesty for illegal immigrants. Case in point: Huy Pham, a 39-year-old St. Paul resident, came to the U.S. as a child when his family fled Vietnam as refugees, but he has little empathy for so-called Dreamers and other U.S. immigrants who lack legal status. “If [my family] can do it the legal way, so can they,” Pham told The New York Times earlier this year.
But this is often a misperception. In terms of student-loan debt forgiveness, the people who oppose it on the grounds of it being unfair aren’t wrong, per se, but they’re succumbing to the sunk cost fallacy (or the sunk cost trap). That is, the money a person has spent paying off their student loans is money that’s already gone. It’s not coming back. And denying someone else a chance at debt forgiveness won’t bring it back either.
It doesn’t even buy you peace of mind because that peace of mind is coming at a great expense, too — someone else’s pain.
John McDermott is a staff writer at MEL. He last wrote about how you shouldn’t believe the dairy industry when it says chocolate milk is an idea post-workout recovery drink.