Biden’s student loan forgiveness plan will cost taxpayers, give little relief to students, and isn’t legal, say education policy experts at The Heartland Institute.
ARLINGTON HEIGHTS, IL (August 24, 2022) – President Biden today announced a student loan forgiveness plan, eliminating up to $10,000 in federal-loan debt for individual borrowers who earn less than $125,000 annually or couples with a household annual income of less than $250,000. If a former college student received a Pell Grant, which is targeted at low-income families, the total forgiveness is up to $20,000.
More than 43 million Americans hold outstanding student loan debt, totaling $1.6 trillion, an average of just more than $37,000 per former student.
Education policy experts at The Heartland Institute—a free-market think tank—commented on Biden’s plan:
“It’s easy to feel sympathy for young people stuck with these loans, and it’s even easier to see why President Biden would want to try to secure their votes for his party in this year’s elections,” said Senior Fellow S.T. Karnick, director of publications. “However, loan forgiveness is a clumsy, stupid, and ineffective way to try to solve the problem. A simple and morally justified solution would be to make these loans dissolvable in bankruptcy proceedings. That would return the responsibility to where it belongs: the borrowers and the lenders.
“Other than being unfair to those who didn’t take out student loans or otherwise won’t qualify for this plan, creating a sure cause of inflation and subsequent recession or quite possibly a depression, further increasing the already too-high and upward-spiraling cost of higher education, and bailing out lenders while placing the burden on people who had nothing to do with these loans being taken on, this is a great idea.”
“Canceling outstanding student debt will help recent college graduates, but do nothing to reduce the cost of a college education for current and future students, which is out-of-control,” said Senior Editor Joe Barnett. “If anyone should ‘forgive’ student debt, it is the institutions that charge students (and taxpayers) exorbitant tuition and fees, and could dip into their fat endowments and issue graduates a refund, along with an apology. Tuition and fees have increased faster than inflation for 30 years. The money higher education has received from taxpayers and students hasn’t been put toward academics, but bureaucracy, so that more than half of university employees today are not teachers.”
“This executive action is a massive smack in the face to every sucker who paid off their loans themselves, or worked their way through college and gave up a whole lot of fun and free time just to keep their debt load to a minimum, or didn’t go to college at all,” said Senior Policy Analyst Timothy Benson. “All three groups are now subsidizing the whiney, affluent, white-collar professional crybabies who are going to get their loans ‘forgiven.’
“Keep in mind the president has no constitutional authority to do so. Even Nancy Pelosi agrees, stating in July of last year, ‘people think that the President of the United States has the power for debt forgiveness. He does not. He can postpone. He can delay. But he does not have that power. That has to be an act of Congress.’
“If members of Congress had any sort of respect for our constitutional system, or for the institution they serve in, the articles of impeachment on Joe Biden would already be filed. If a president of the United States can just unilaterally transfer $330 billion in debit at the stroke of a pen from one group to another, we have ceased to live in a constitutional federal republic and the United States of America is nothing more than an elective monarchy.”
“President Biden’s decision to cancel student loan debt demonstrates the left’s contempt for the U.S. Constitution,” said Senior Editor and Research Fellow Chris Talgo. “Since when can the president wave a magic wand and make $380 billion in outstanding loans disappear?
“President Biden claims to be a deficit hawk. But this will add at least $380 billion to the national debt. President Biden claims to represent the interests of everyday Americans. But this is a huge giveaway to wealthy Americans. President Biden claims to be a unifier. But this will only divide the country even more.”
For The Heartland Institute press release.
For more on higher education issues.