Student loans, PPP loans are of a different character; let’s talk about it

How are PPP loans different from student loans? Let me count the ways

The difference between student loans and PPP loans is best told in three numbers.

  • 30% of Michigan residents have a college degree.
  • 0% of student loan borrowers took out a loan by force of government.
  • 32% of Michigan businesses faced a government-ordered shutdown in 2020.

On Thursday night, the White House took to Twitter to defend President Joe Biden’s decision to forgive $10,000 of student loan debt for each borrower.

It did so by noting that Georgia Rep. Marjorie Taylor-Greene, who dared question the administration, herself had $183,000 of PPP loans forgiven.

The media took the White House tweet for what it was: The issuance of a new talking point. Anytime someone complains about the student loan giveaway, just compare it to PPP loans. Brilliant!

It all happened so fast, one might think it makes sense to compare the two. It does not.

On March 10, 2020, Gov. Gretchen Whitmer declared a COVID-19 emergency after two presumptive positive cases. In a state of 10 million people. Lockdowns started a week later.

The contagion of panic was widespread back then. Among politicians, it was universal. Even Florida Gov. Ron DeSantis, who has become the face of the anti-lockdown movement, locked his state down for a time. The public was afraid and demanded that political leaders Do Something.

Lockdowns were that something. Fear of the unknown was elevated to public policy in March 2020.

Lockdowns had never been attempted for a virus before, but overnight, the social proof for lockdowns was abundant. Michigan locked down because New York locked down because Italy locked down because China locked down.

Nobody had to think it through. Everybody just had to follow suit, and say, “We’re all in this together.”

During lockdowns, one in three Michigan businesses faced a government-ordered shutdown. Michigan posted the highest shutdown rate in America, 32%, while the national average was 19%.

But what about all the small businesses that employ people? A lot of those people earn more than the $963 per week people were getting on enhanced unemployment. They have employees, rent, insurance, equipment. They have mortgages and kids’ college educations to fund.

All the governor paused was their ability to earn money, not the demands on their money.

Hence the PPP loans.

PPP loans were an acknowledgement of the government-forced nature of the shutdowns. It was all the feds could do so that “stay home and stay safe” wasn’t a death sentence. Even then, not every business survived the lockdowns.

In Lansing, in Albany, in Sacramento, and in state capitals across America, government employees were now making lists of which jobs were “essential” and “non-essential.”

Because we don’t do central planning in America — because central planning doesn’t work — the process was a mess, from day one.

Look at how gyms and restaurants were treated, during a pandemic where the obese were among the hardest hit. The very businesses that should have been part of the solution were misclassified as part of the problem.

The central planners failed.

PPP loans were an acknowledgment that livelihood is more than money. If it were just about money, the government could have given bigger unemployment checks. The money printer is always running in Washington, D.C.

No, the theory behind PPP loans was that people would keep getting paid by their workplace. They’d have a job to return to. Even when work was paused, the employment relationship would be maintained.

We spend one-third of our days, and more than half our waking hours, working. These jobs give us a sense of identity and a purpose. “What do you do?” is one of the first questions people ask each other. Having an answer you’re proud of is what people mean by “the dignity of work.”

When that dignity was taken, by order of the government, it was important that people still viewed themselves as employed. The kids might not see Dad go to work for a few months, but all could take heart in knowing he had work.

That’s why the federal government established PPP loans: to patch up an employment crisis it created, and because jobs offer the livelihood that government money cannot.

Government can hand out cash, but that doesn’t come with the purpose a job does. Even if you hate the job, your purpose is to get paid.

Student loans are arguably why college has gotten so expensive, and why the price tag grows annually. Colleges know that borrowers have access to a large pot of money they wouldn’t access for any other reason. That scheme should be brought to an end, not subsidized.

After Congress passed a $7,500 subsidy for electric vehicles, Ford Motor Co. raised its EV prices by a similar amount. People respond to incentives. What is likely to result from a $10,000 student loan amnesty? Is it likely your kid’s college education will get less expensive now, or more?

An 18-year-old, most times, would not be loaned $25,000 to start a new business.

But ahead of fall classes, every 18-year-old who filled out a FAFSA was given that much in student loans. Often this happens without the student talking to another human. The loans are granted without regard for a student’s ability to pay, or a specific plan for repayment.

In no other realm of finance, aside from the student loan, does the borrower get so much money for so little planning.

Student loans were taken out voluntarily, without expectation of a bailout. PPP loans were an attempt to keep society and the employment market together, when fear and government mandates ripped at its seams.

Let’s never confuse the two.

James David Dickson is managing editor of Michigan Capitol Confidential. How did you pay for your education? Tell me at

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.