‘President Biden announces student loan relief for borrowers who need it most,” says the White House.
Every part of that sentence is wrong.
“President Biden announces” — not really. If there were ever a time when Biden’s progressive supporters are ventriloquizing the president, this is it. Biden is, of course, fully culpable as the man with whom the buck stops. But student-loan forgiveness is a policy that has been announced time and again by radical progressives on the Internet for over two years — and pretty much nobody else.
The issue does not rate highly among voters in general, who are overwhelmingly concerned with inflation. Loan forgiveness certainly will not help inflation, and 59 percent of Americans and even an Obama economist are concerned it will make inflation worse. The median American adult does not have any student debt because the median American adult never borrowed any money to go to college. Only 37.9 percent of Americans over the age of 25 even have a bachelor’s degree or higher.
After about a year and a half of online harassment from the sliver of the population for whom this policy is beneficial, Biden has allowed himself to be bullied into violating the Constitution on their behalf. Even Nancy Pelosi has said the president doesn’t have the power to forgive student debt. His staff, which collectively owes millions in student debt, will no doubt be happy. But the presidency is the one office for which the entire country votes, and for it to be captured by a progressive fringe is a travesty.
“Student loan relief” — again, not really. “Relief” implies the disappearance of a malady, but this is merely a transference. Biden’s student-loan plan will cost about $2,000 per taxpayer. It completely erases the purported (and exaggerated) deficit reduction of the reconciliation bill Biden signed just over a week ago.
Biden is effectively telling all the people who didn’t go to college, those who went to college but didn’t borrow money, and those who went to college and already paid off their loans that they are suckers. The lucky few who just so happen to have student debt at this arbitrary moment get a windfall at the expense of everyone else.
“For borrowers” — wrong. Borrowers are people who are given money by lenders under the expectation that it will be paid back over a period of time, subject to the terms of a contract. Biden has taken what was supposed to be a loan and turned it into a gift. Those who benefit are recipients of government largesse, not borrowers.
Federal student loans are already issued on very favorable terms. For the vast majority of people who receive them, it’s a fantastic deal. They get to increase their lifetime earnings, often by millions of dollars, by taking out a loan at the age of 18 at far below the market rate of interest. The least they can do is pay it back.
Forty-five percent of bachelor’s-degree recipients graduate with no debt at all. Only 7 percent of those who do borrow have an outstanding balance over $100,000, and 54 percent owe less than $20,000. The horror stories that get such outsize attention often represent people who made poor financial decisions. Harsh, perhaps, but there are any number of ordinary Americans who make different poor financial decisions all the time, and they aren’t going to have their debts forgiven by the government. What makes people who went to college more deserving?
“Who need it most” — no. There is no possible definition of “need” in which college graduates in the United States of America would rank first.
Workers with a bachelor’s degree or higher have an unemployment rate of 2 percent and only saw their unemployment rate spike to 8.4 percent during the pandemic, compared with 17.6 percent for high-school graduates with no college. The order caps those eligible for loan forgiveness at $125,000 in individual income, which is approximately double the median household income and hardly excludes anyone. Forty-seven percent of federal loans go to graduate students, who will in many cases make six figures upon entering the workforce.
“Radical progressives violate Constitution and statute to further enrich the well-off at the expense of everyone else” would be a more accurate way to state what the president has done. He has yet again abused emergency powers to pursue a reckless and senseless policy.
To the extent it is possible, the order must be challenged in court and hindered by every legal means available. Republicans have rightly blasted the move, with Senate minority leader Mitch McConnell calling it a “slap in the face to working Americans.” They should devote the time from now to Election Day exposing this grotesque giveaway to voters and reasserting reality: The U.S. president is not an omnipotent genie placed behind the Resolute desk to grant partisan wishes by the stroke of his pen.