Manhattan Institute fellow Robert VerBruggen joins Brian Anderson to discuss the Biden administration’s executive actions on student debt, the growing higher-education bubble, and the enduring relevance of Charles Murray’s work on social policy.

Audio Transcript

Brian Anderson: Welcome back to the 10 Blocks podcast. This is Brian Anderson, the editor of City Journal. Joining me on today's show is Robert VerBruggen. He's a fellow at the Manhattan Institute and a contributing editor of National Review. He's been covering public policy and social science issues for City Journal since he joined MI last summer. He recently analyzed for City Journal President Biden's student loan executive actions, and in our summer issue, wrote a really terrific longform profile of the life and work of Charles Murray.

Robert, thanks very much for joining us.

Robert VerBruggen: Thanks for having me.

Brian Anderson: Let's start with that piece you did on student debt. The president announced last week his plan, which would cancel $10,000 in student loans for borrowers making less than, I think it was $125,000 annually, and that raises ultimately to $20,000 for certain borrowers. He also extended the current moratorium on debt payments through the end of the year and imposed a handful of other changes.

This decision fulfills a campaign promise, and it comes after months of speculation, during which the administration picked some low-hanging fruit by forgiving the debt of students defrauded by certain institutions. But that's not to say it was a smart move. In your view, it wasn't. I wonder if you could sketch out your argument as you presented it in that piece and develop it.

Robert VerBruggen: Sure. I think the gist of it here is that this is a ton of money to spend, and it's not targeted particularly well to people who we should be sympathetic enough toward to give them federal money. As you mentioned, the limits of the forgiveness here are $10,000 for some borrowers and up to $20,000 for people who received Pell Grants back when they went to college.

We don't just run around giving $10,000 or $20,000 to people at random. This is something that, if you're going to give that type of money to somebody out of taxpayer funds, which is what this is, because they borrowed the money from the federal coffers and are supposed to pay it back, you need to have a pretty good reason.

Also, the sheer scale of the spending as a whole is enormous. The estimates that we're seeing so far are in the range of around $500 billion. If you divide that by the 330 million people who are in the country, that's about $1,500 for every single man, woman, child in the country. That's a lot of money that we're spending on this. If we're spending that kind of money, we should target it.

My big objection to this is that it doesn't target people who were defrauded by institutions. It does not target people with very low incomes. It does not target people who, for example, fell way behind on their payments and ended up just way over their heads. There are already programs we have that address some of those issues, and those are things that we could look at fixing.

What this does is simply gives $10,000 to $20,000 more or less indiscriminately. As you mentioned, there is an income cutoff. It's $125,000 for an individual and $250,000 for a couple. That does take out about 5% of the population, so it stops the very rich from benefiting from this. But I would argue that it's completely ridiculous as a cutoff for federal largesse, where you're taking money from some taxpayers and giving it to others.

Somebody who is making $125,000 or a couple that's making $250,000 is extremely well-off in relation to the average person in this country. The median earnings for a worker working full-time is somewhere between $50,000 and $60,000. The median income for a household in America is about $70,000. We're giving money to people who make well more than that before they hit that cutoff.

Brian Anderson: Biden cited his authority to do this under the HEROES Act, which was a 2003 law passed in the aftermath of 9/11. It gives the education secretary authority to lift loan requirements in the event of a national emergency. It's the same justification or authority that the Trump administration used in suspending loan payments during the pandemic. How likely is this going to be to hold up in court, and are there going to be legal challenges?

Robert VerBruggen: Well, this is extremely complicated as a legal matter, and even the lawyers are disagreeing about it. I'm not a lawyer, so I don't have very bold predictions to make.

One prediction I would make is that it's going to be challenges. There are definitely going to be challenges in court. The question is, how are they going to fare? Certainly, no law was ever intended to just give the executive branch the authority to start forgiving student debt wherever it feels like, but there are some laws that have vague language. The one that they've pointed to specifically is the HEROES Act, which you mentioned. It was a law passed as we were going into Iraq. The idea was to allow the executive branch to give some forgiveness to people who were directly affected by wars, national disasters. Basically, it was meant to give targeted relief to people who were, for example, going over and fighting our wars.

Basically, what they're saying is that COVID was a disaster for the entire country, so therefore this gives us the authority to give free money to everyone. That is not what was intended by that. That's not what anybody thought they were enacting when they passed that law. The law passed almost unanimously. I think there was one no vote in the House back in 2003. It, obviously, was not intended to do that, but it was written in broad-enough language that you can make a case that it gives them a very broad authority.

That's the first interesting question is, on the merits here, how are courts going to interpret that? I think the current Supreme Court is very reticent to read laws broadly to give the executive branch more authority, especially when it's extremely unlikely that in this heretofore obscure law from 2003, we granted the executive branch authority to forgive $10,000 to $20,000 of student debt for everybody. But we'll have to see how they handle that as a textual issue because the language in there actually is fairly broadly written.

Then the second question is standing. You can't just go to court as a taxpayer and say, "Hey, you're giving away a bunch of my money and I want to sue." You need to demonstrate some concrete injury to yourself that gets much more specific than simply being a taxpayer in a situation where an arguably illegal action wasted taxpayer money.

There's a lot of debate about who exactly would have standing to sue to block somebody else's loan forgiveness. Some theories are loan servicers could because these loan servicers make money servicing the loans that are now being canceled, so they're going to lose business from that. You could also argue that if you barely missed the income cutoff, that you could sue on the grounds that this didn't go through the notice-and-comment procedures required by federal law, and you should have had the chance to argue for a higher income cutoff that would've included you.

There are a lot of legal theories out there. When you get to standing questions, the issues get very complicated and technical in a hurry. I'm very interested to see how it plays out. I don't have concrete predictions.

Brian Anderson: Sure. There are provisions in the plan that don't make it completely a handout to the wealthy. I wonder if you could say just a little bit more about the distributional effects of the decision. It does seem to be the middle class who will benefit the most from this.

Robert VerBruggen: Yeah, exactly. That's one place where I think Biden deserves at least some credit because he definitely rejected some of the earlier plans, which involved some people were saying you should just flat out cancel all student debt. Some people were asking for limits up to $50,000.

The problem with this is that, first of all, people who go to college make more money than people who don't. When you're targeting people who went to college for special debt relief, you're targeting the upper class more. Secondly, about 40% of all student debt is for graduate school, not just undergraduate school. The individuals who did go to graduate school have the biggest debt, so the people who would be getting the biggest checks from this are people like doctors and lawyers, people who have these big debts that they racked up pursuing degrees that are actually very high paying, lead to very high-paying careers in medicine and the law.

What Biden did is hit on this triple package of limits to that system, where he managed to direct the money a little bit lower on the income spectrum, one of whom we've already discussed. The $125,000, $250,000 cutoff keeps out about the top 5% of income earners. Limiting the forgiveness to $10,000 means that there's going to be less skew toward people with grad degrees, because if you have $60,000 worth of debt, you can still only get $10,000 forgiven.

Then the extra $10,000 given to people who received Pell Grants in college is an interesting provision as well. First of all, it increases the cost a lot, so he's giving more money to the overall program and increasing the cost of it. But it distributes the money more to poorer people because people who got Pell Grants are people who came from lower-income families. Obviously, the fact that you came from a lower-income family does not mean that you're lower income today necessarily, but disproportionately that's true. If you target this population for additional aid, you're giving a higher percentage of the aid to people who are middle class now.

If you look at the analysis by the Penn Wharton Budget Model, basically, it appears to be giving the bulk of the money to the middle of the income spectrum rather than to the upper middle or the upper part of the income spectrum. That's true both overall and if you look just at the 25 to 35-year-old age group. If we check back on these folks in 20 years, it's definitely possible that the folks who got aid are going to be doing much better, much higher lifetime income. That's a criticism that I've seen of the Penn Wharton analysis, is that it doesn't account for future income, lifetime trajectory. But for right now, it definitely seems that this was targeted at the middle class rather than the wealthy.

Brian Anderson: One criticism of the measure is that it could encourage students to take on more debt, and that colleges will respond by just raising tuition. How likely is that? Is there a point that we're going to reach where the tuition bubble will finally burst? I've been hearing this for a long time. Or will this just continue to add to the cost to college?

Robert VerBruggen: I think in two ways it's going to contribute to the problem. The first is just, as a general matter, when you forgive debt, that sends the message that taxpayers stand ready to pump more money into higher education, so you make people less price sensitive when they're making decisions about higher education.

The second, there's a left-leaning writer named Matt Bruenig who had a post that really made the rounds a few days ago, pointing out one of the lesser-talked-about aspects of the bill, the income-based repayment reforms. What that program is, is it allows people to enroll and you can pay a certain percentage of your income rather than paying your loans in a traditional manner. For people with undergraduate loans, it cut the percentage from 10% to 5%, so that makes that program much more attractive to people to enroll in.

The problem with that is that if you are going to be paying a certain percentage of your income for a certain number of years, you don't care what your total debt amount is, because you're not paying that. You're paying the percentage of your income. His point is that colleges can basically jack their tuition way up, have their students take out loans, and then the students enroll in the income-based repayment. They don't actually pay them off, so the college pockets the money and the government is stuck with the bill.

One response I've seen to that from, for example, Jordan Weissmann at Slate is that there are already caps that limit how much borrowers can borrow, so there's not as much room for tuition to grow as you might worry. But the issue there is that if you're leaning on those government-set caps, you basically have price controls. You're basically no longer having a market that's controlling costs, and the only cost control we have is just based on where the government chose to set that price cap.

To me, in terms of... You mentioned the higher ed bubble. Is that bubble going to burst? What I see on the horizon there is actually more about demographics.

I'm a millennial. I was born in 1984. My generation was actually pretty big. We're an echo of the baby boom generation. After the baby boomers grew up and hit childbearing age themselves, they had kids and created a demographic bubble, so my generation is big. But we're not in college anymore. I'm almost 40.

The number of college-age Americans is set to start declining, and that's going to be a huge blow to the higher ed sector. We're going to have to see how they manage to wriggle their way out of that, if that's through going to the government for more money or if it's by contracting as a sector.

Brian Anderson: To shift gears, I'd like to talk a bit about your other wonderful recent profile of Charles Murray, which was in our summer City Journal. In his long career, he's certainly been embroiled in controversial and sensitive topics and social policy, from welfare reform and a relationship between intelligence and crime, to assortative mating, the growing class divide. You've, obviously, followed his work very closely over the years. What stood out to you while reporting this story? Do you think Murray's work has become more or less influential over time?

Robert VerBruggen: Yeah, I've been a fan of Charles Murray since my college years, so I'd already read most of his books. This was a really great chance for me to go back and reread his books, and I also had the chance to sit down with him for an interview.

One thing that really stood out to me while looking back at his career is that he did something that we don't see people do a lot anymore. We don't have big books like Losing Ground or The Bell Curve so much anymore. I think that's probably, in part, because we consume information in all these bite-size chunks on social media and in so many other ways, and also because we're polarized. A book with controversial claims of a right-wing or libertarian angle, those books are just sold to conservatives these days.

If you look at Losing Ground, if you look at The Bell Curve, you have one author who was able to capture the entire nation's attention in a big way twice in two decades. I don't see anybody doing that anymore, and I don't see books having that central role in the public debate anymore. That was really striking to me, as somebody who was either extremely young or in grade school when these books originally came out.

Another thing that stood out to me is that social science has really changed since the 1980s and 1990s. I spend a lot of my time looking through modern social science, reading modern studies, and I also do some data work myself. I majored in journalism, but I can just go on the internet and download census data in a few minutes.

If you look at the acknowledgements in Losing Ground, and I talked to him a little bit about what this process was like, he had to go in person to government offices to find all these obscure reports with statistics in them. If he wanted any numbers that weren't currently available, he couldn't just calculate them. He had to have them do special computer runs. I think that was really striking to me, in that we now have much more open access to government data, thanks to the internet. That's actually a really good thing.

On his influence, has it become more or less influential over time? I would say two things. First of all, his thinking just absolutely still resonates to this day, especially on the Losing Ground and Bell Curve topics of the welfare state and the incentives it creates and the importance of intelligence to success in modern societies. To this day, you can't understand the controversies over those topics without engaging with what he said and what his critics said about him. Also, the things he wrote in Coming Apart about the splintering of white America, that really foresaw what happened with the Trump phenomenon. I think he's still very, very influential in terms of his classic works.

Another thing I would note is that his critics have taken to just ignoring him when he continues to speak. He's still very much active, still writing, still contributing, and doing so in controversial ways. His last two books were one called Facing Reality, in which he talked about racial gaps in crime rates and racial gaps in school performance and cognitive tests, and also Human Diversity, where he wrote about human biology, differences between sexes and differences between different human populations. These were very controversial things that could have made a splash, but they simply didn't because the left basically ignored him. That was another thing that I found interesting about going through his body of work and speaking with him.

Brian Anderson: I wonder if the social science landscape has changed a bit, too, in a way. You have scientific journals nowadays saying they're not going to publish certain papers that they view as politically toxic, even if there might be truthful analysis in those papers. I wonder, in general, it's not that there weren't protests when Charles Murray was doing some of these earlier books, but do you think that politics is starting to close the space for social science in a way that wasn't even the case when The Bell Curve was published, or even as recently as Coming Apart?

Robert VerBruggen: Yeah, the way I look at that is that the internet is a blessing and a curse. It's certainly led to the proliferation of this woke ideology and the cancel culture, where basically social media gives you an opportunity to pressure people publicly in a big way that it was much more difficult to do 20, 30 years ago. The internet is also a release valve for research that nobody is willing to publish. Any random person can grab a social media account or a blog and do an analysis of data, which, as I mentioned before, there's a lot more publicly available data now, and publish it.

As the journals shrink away from doing work that is important, other people are able to move in and fill that gap. That might actually lead to a better model for science, where you have people doing their own work and publishing it, and also publicly posting, "Here are the calculations I did. Here are the data I used. Here's the file that you can use to replicate what I did." That could be a much better model for science, unless social media starts censoring that as well.

I think it's a blessing and a curse right now that we have journals shying away from doing controversial and important work, but you also just have a much better ability of any random person off the street to figure these things out for themselves and to make their own way through the science.

Brian Anderson: A final question tying these two themes together. I haven't seen Murray weigh in on the student loan decision, but I wonder, if he has, I haven't seen it, but what he might say, given his own work in education, and about this idea of really encouraging marginal students into four-year college education.

Robert VerBruggen: I've not seen him weigh in either, and I wouldn't purport to speak to him, but trying to filter that issue through the lens of his thought, I'd point to a few different things he's written and a few different aspects of his philosophy. One of the core arguments of both Losing Ground and in his later book called In Pursuit, which is a much more philosophical book about the nature of human flourishing and the role of government, is that people want to be self-sufficient. They want to make their own contributions. They want to see the rewards of their own work. I think that giving people loans and then telling them they don't need to pay them back is counter to that goal, certainly.

Another big aspect of his thought is libertarianism. He wrote a book called What It Means to Be a Libertarian, though in recent years he's begun calling himself a Madisonian instead of a libertarian. I think the attitude I always have toward these kinds of things is, why are you taking money from one group of people and giving it to another group of people? In this case, it's not even targeted that well. I think he would have a lot of the same concerns about the role of government.

Lastly, his book Real Education, which was published, I believe, toward the end of the 2000s, one of my favorite books of his, and basically his point in Real Education is to tie some of the less controversial aspects of The Bell Curve, about variation in human intelligence, cognitive ability, and apply it to the education context. His point is that not everybody is cut out for college, and we need to help them find their place in society and find their place in the workforce without trying to shoehorn them into going to college. Obviously, funneling a lot of government money into college and forgiving the debts of people who went to college and putting so much focus on "you have to have a BA or you are not a worthy person in society" is very contrary to the message of that book.

Brian Anderson: Thank you very much, Robert. I encourage people to read that essay on Murray's work. It doesn't shy away from the controversies that Murray was embroiled in on race and other issues. I think, Robert, you did a terrific job of doing a fair assessment of his life and work.

Don't forget to check out Robert VerBruggen's work on the City Journal website. That's We'll link to his author page in the description.

You can also find City Journal, we're on Twitter @CityJournal and on Instagram @cityjournal_mi. As usual, if you like what you've heard on today's 10 Blocks, please give us a nice rating on iTunes.

Robert, very good to talk with you, as always.

Robert VerBruggen: Thanks. You too.

Photo by Brandon Bell/Getty Images

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