Cancelling Debt, Winning Hearts? Debt Cancellation and Political Attitudes

• In Event: Local Context, Personal Experience, and Redistributive Preferences

Abstract

President Biden’s 2022 effort to cancel some amount of federal student loan debt further heightened the political salience of student loan debt as an issue, following several proposals for debt cancelation that took place during the last presidential election cycle. However, despite this recent heightened salience and the clear political relevance of the issue, there is relatively little scholarly work on the political implications of both personal debt such as student loan debt as a phenomenon generally, and the nature of support or opposition to policies that benefit debtors among the electorate specifically. It is this gap in the scholarly literature that this project aims to fill, with implications for not just our understanding of what impacts attitudes surrounding student debt relief specifically, but also redistributive policies more broadly.

The literature on attitudes towards redistributive policies, and beneficiaries of them, has mainly focused on groups that are by most objective measures relatively severe material deprivation, such as those in poverty who receive some form of welfare benefits. However, groups in such dire straits are not the only possible beneficiaries of redistributive policies. The recent efforts to cancel federal student loan debt illustrate this. Student loan debtors are a group that occupies a space in society where they can plausibly be considered both privileged (due to their education), and marginalized (due to their debt). This represents an opportunity to expand the existing literature on both redistributive policies, and how they are perceived (and influence perceptions themselves).

How did the Biden administration’s attempted cancelation of student loan debt impact attitudes towards the administration, and perceptions of it? Did the attempt to cancel student loan debt influence how the administration was perceived ideologically? And how did student debtors themselves respond? Did being the intended beneficiaries of a policy from the administration have an impact on their attitudes towards it, or how they perceived it?

I test several theoretical explanations, from the broader literature regarding redistributive policies and political attitudes, for how the administration’s attempted cancelation impacted perceptions of the administration, using both observational data and a survey experiment. I leverage the fact that the application window for cancelation opened during the period in which the 2022 Co-operative Electoral Survey (CES) was in the field, using the opening of the applications as a discontinuity to examine the impact on attitudes towards the administration among both debtor and non-debtor respondents. Though the administration had announced it’s cancelation plans prior to the survey taking place, there was relatively little forewarning of when exactly the application window would open. This means that there was a plausible exogenous shock to the salience of the issue among respondents. I exploit this to measure attitudes towards the administration (job approval) as well as ideological perceptions of the administration itself. I also measure the distance between ideological self-placement and ideological placement of the administration, among both debtors and non-debtors.

In addition to observational data, I run a survey experiment on a nationally representative sample. I take advantage of randomized question order among respondents to not only randomize the salience of student loan debt and it’s attempted cancelation as an issue, but to also capture both respondents debtor status, and the degree to which cancellation would impact people that they personally know. I then take measures of those same outcomes (approval of the Biden administration, and ideological perceptions towards it). By randomly varying question order, I seek to not only manipulate whether respondents are treated by being primed with the policy, but also capture the “level” of treatment (eg. The degree to which non-debtor respondents primed to think of the issue personally know people who would potentially benefit).

This setup allows both the experimental and observational examination of factors with substantive theoretical implications. For example, by examining ideological placement and approval of the administration, we can look into whether existing theories of redistributive attitudes travel to cases like student debt relief, whether the social position of beneficiaries is not as unambiguously marginal. Measuring whether debtor’s attitudes towards the administration were impacted by cancelation also has implications for the literature on self interested political behavior. And among non-debtors, whether proximity to debtors impacted the attitudinal impacts of the policy has implications for the broader literature on economic self interest.

Author

• Alex Ross, University of California, Riverside