His popularity flagging, President Joe Biden is using the oldest trick in the book to return voters to the Democrats’ fold: Don’t earn their future votes, buy them. And that’s exactly what Biden is doing with his $1 trillion plan to “forgive” student loans.
Biden had already allowed students to “postpone” paying their loans during the pandemic “emergency,” even those who have jobs and could make the payments.
So why now forgive the loans? The truth is, one of the biggest recent declines in Biden’s support comes among Americans of college age and slightly older, the very group most likely to have a pile of student loans.
What better, or more cynical, way to revive their flagging political support than to bribe them with a “free” education?
Hard-left Democratic Rep. Ayanna Pressley called Biden’s plan “a tremendous victory.” In fact, it is yet another betrayal of working Americans who will now be paying taxes to support rich kids’ higher education.
That’s not hyperbole. If anything, it’s understatement. As a devastating University of Chicago study conclusively shows, wealthy families disproportionately benefit from loan forgiveness programs.
A recent Fox News report summed up the study’s findings: “The top 30% of households would receive almost half of the total dollars of forgiven debt, while those in the bottom half would get a quarter of the money. And the top 10% of earners would get $5,944 in forgiveness (in today’s dollars) while those in the bottom 10% would get $1,070.”
Sound fair to you? And that was for a much smaller forgiveness program than the one now envisioned by Biden.
Congratulations, suckers. You’ll pay for it, not “the rich.”
Sure, the White House tweaked its plan and is now “considering excluding high earners,” but it’s still a massive giveaway to those who occupy the top end of the income scale: that is, college graduates. After an initial negative public reaction to his loan forgiveness scheme, Biden is reportedly considering forgiving at least $10,000 per borrower, while “limiting” the relief to undergraduates who earn less than $150,000 a year individually, or up to $300,000 as a couple.
Sorry, but gainfully employed people who earn six figures should not be having loans forgiven. They should be paying off their debt, as they promised to do when they borrowed the money. Otherwise, we’ll have a situation of what economists and bankers call “moral hazard” — the incentive borrowers have to renege on future debts if they think someone else will be forced to pay them.
That’s precisely the situation that Biden’s plan would create. And it would raise the cost of credit to everyone, including you.
And if we’re going to give students a break, why not forgive the credit card debt or mortgages of plumbers, construction workers, grocery store clerks and others in the blue-collar sector, too? Don’t they deserve forgiveness? After all, they fix your broken pipes, build your homes, bag your goods, and pay their taxes, all without giving you a smug lecture on Critical Race Theory or asking you to “check your privilege.”
Don’t they also deserve some “forgiveness”?
Worse still, this is all being planned by Biden on the supposed authority of the Higher Education Act of 1965, which is largely responsible for the surge in college costs. But, as Power Line’s John Hinderaker (an attorney himself) notes, nowhere in that landmark piece of legislation does it give the government power to forgive debts.
What Biden is proposing is, as Hinderaker rightly puts it, a “patently illegal action in order to buy votes.” Even Biden himself, way back in 2020, admitted it was “pretty questionable” whether he could do such a thing.
Meanwhile, just as bad, Biden’s plan is a handout as well to poorly run colleges and universities that have become fat, lazy, and wasteful thanks to massive education subsidies that lead to soaring costs for education and no incentives to reform.
A strong case can be made that there should be no federal aid for education at all. Let student borrowers decide whether the education is worth it or not, rather than sticking taxpayers with the tab after the fact. Students will take their studies far more seriously if they know they’ll pay for it.
Biden’s student loan forgiveness is a bad idea from a politically desperate president. We hope it will be legally challenged and struck down in court as an illegal exercise of presidential power. If not, you’ll just have to add this to the growing pile of Biden’s messes that the next president will have to clean up.
— Written by the I&I Editorial Board