As everyone anticipated, President Biden yesterday announced that he was canceling a huge amount of student-loan debt.
We at the Martin Center for Academic Renewal regard the president’s move as foolish and illegal. Jenna Robinson and I make that argument in this piece.
What’s wrong with it?
It’s wealth transfer that mostly aids the well-off at the expense of poorer Americans. It’s prodigiously expensive, and the loss of revenues will mean that the government will have to borrow still more money to pay for all of its spending. It creates moral hazard, encouraging future students to be less economical in their college choices and financing decisions. It is outside the president’s authority to cancel debts owed to the government (and it’s also outside the power of Congress, even if it were legal for it to delegate such authority, which it isn’t).
Biden’s decree should be declared illegal or reversed by the next sensible occupant of the White House.