Biden Must Reap the Whirlwind If He ‘Cancels’ Student-Loan Debt

I f President Joe Biden follows through on his threat to unilaterally “cancel” all, or any, of the $1.7 trillion in federally held student-loan debt, the Republican Party must respond to the move by taking an industrial-grade flamethrower to the status quo until it is reduced to ashes. What Biden is considering would be an act of political, economic, and constitutional warfare, and Republicans at both the federal and state levels would be obliged to immediately treat it as such by salting the earth as soon as they possibly can.

The first step for the GOP to take would be ending the student-loan program completely. Given the obvious political temptations that program was always going to create, the federal government should never have gotten into the student-loan business in the first place. But it did, and so here we are. If President Biden goes through with his threat, we will have been shown once and for all that the government cannot be trusted to issue these loans on behalf of America’s taxpayers, and that it must not be allowed to do so again. In 2010, Congress authorized a loan program, not a system of politically motivated rolling jubilees. If the program becomes that — as it would under Biden’s loan-forgiveness scheme — it must be killed. Such a repeal would not only inoculate Americans against this happening again, it would help to limit the government-created increases in tuition that, paradoxically, are being used to justify further federal action.

Second, a GOP-led Washington, D.C., would have to get the Treasury to recoup the “forgiven” loans so that non-graduates — a majority of Americans — didn’t end up paying for the commercial products that graduates freely chose to buy. There are many potential sources for that money, including the beneficiaries themselves. Tax them. Tax the universities they went to; tax the enormous endowments those universities enjoy; tax as income any gifts those universities are given, however small; and, where possible, remove the nonprofit status of donations so that those who give gain no fiscal advantage. When all that is done, sue the worst offenders for fraud. Clearly, if the government is required to bail out every college graduate in the country, colleges are not doing what they promised they were doing, and they must be immediately investigated. You can’t have it both ways. The current unemployment rate for college graduates is 2 percent, and their incomes are well above average. If those facts are a sign that college is working well for its customers, then there’s no need for a taxpayer bailout. If those facts are irrelevant, then something is very, very wrong with the higher-education sector, and it must be rethought from the ground up.

Third, the federal GOP would have to tie up the move in litigation in every way possible. Neither the American constitutional system nor any of the statutes that Congress has placed on the books give the executive branch the power to single-handedly spend $1.5 trillion of taxpayers’ money in this way. The Department of Education has already confirmed that the president “does not have statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances, and/or to materially modify the repayment amounts or terms thereof,” and nothing has changed since that declaration. Joe Biden knows this. The Republican Party knows this. Everybody knows this, including those demanding to be let out of their obligations. If the president cannot abide by the oath he took to uphold the law, he must be forced to do so by the courts, or, if necessary, by Congress. If the issue is deemed non-justiciable, Biden must be impeached.

At the state level, Republicans would have to respond by destroying the overzealous accreditation system that helped to create this mess, and by considering whether it is a good idea to treat would-be college students differently than, say, would-be roofers, plumbers, or entrepreneurs. Most jobs do not — and should not — require degrees, and Republican state legislatures should nuke any public-sector certification requirements that cannot stand up to review. A college degree can be enormously helpful, but it can also be enormously useless, as the call for student-loan “cancellation” has made clear. There can be no way out of this mess — that is, there can be no way for prospective students to accurately weigh whether going to college is in their interest — if governments simply assume that their job is to encourage and pay for university attendance. If they wish to create a more rational incentive structure, Republican-run states will need to address this problem head-on.

Ultimately, our public officials have two choices: They can either allow the current situation to resolve itself via the time-tested method of supply and demand, or they can admit that there is a massive problem in American higher education and end the status quo as we know it. They cannot do both. To foist all of the existing debt on innocent taxpayers and then to start the same disastrous process all over again would be an act of incomprehensible vandalism. If, in a moment of dramatic cowardice, this president takes that course, he, and those who benefited from his folly, must be made to reap the whirlwind.