President Joe Biden announces a federal student loan handout
Biden explains that the federal government will provide $10,000 of student loan "relief" to Americans with debt who make under $125,000 a year.
Government spending is a major cause of inflation. And inflation is a tax on the poor. This Congress has spent massive amounts of taxpayer dollars in the past two years, leading to historic highs in inflation not seen since the 1970s. The Biden administration’s policies on federal student loans are only making inflation worse, effectively imposing a tax on the poor to benefit the rich or better off.
For the past 29 months, no borrower of federal student loans has been required to make a single payment on those loans, costing the American taxpayer $4.5 billion a month, according to the Congressional Budget Office. That’s added a total of $103.5 billion to our nation’s debt, all so people with college education don’t have to bear the responsibility of paying back loans they previously committed to paying back.
Now, adding additional fuel to the inflation fire, the administration has announced its plainly illegal plan to forgive $10,000 of student loan debt per person for borrowers making under $125,000 per year.
BIDEN ANNOUNCES STUDENT LOAN HANDOUT AS NATIONAL DEBT SOARS
Democrats have touted their student loan schemes as promoting economic equity, but in fact it does the opposite.
Even with an income cap, Biden’s student loan forgiveness proposal gives 69 percent of benefits to borrowers in the top 60 percent of income distribution, according to the University of Pennsylvania Wharton Budget Model.
President Biden, joined by Education Secretary Miguel Cardona, speaks on student loan debt at the White House, Aug. 24, 2022. (Alex Wong/Getty Images)
And the repeated loan repayment pauses have effectively given doctors a $90,000 bonus and lawyers a $55,000 bonus in loan forgiveness, says an analysis by the Committee for a Responsible Federal Budget.
Robin Hood famously stole from the rich, the educated, and the aristocracy to give to the poor. The Biden administration is taking from poor and working Americans to give to the highly educated and higher-earning elites.
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Spending $4.5 billion a month on people who have the ability and the responsibility to pay back their student loans only further stokes inflation, making the cost of groceries, gas, clothing, and everything we buy more expensive.
During the height of the COVID-19 pandemic, a student loan pause may have made sense. But what started as temporary emergency relief has long since morphed into quasi-permanent policy without obvious justification.
Are we still in an economic emergency or not? Biden officials are trying to have it both ways. They like to tout the restoration of jobs lost due to the pandemic as a sign of economic success, and to celebrate reports showing 11.3 million unfilled jobs – two openings for every unemployed person – as a sign of a healthy economy. Yet they also want to rationalize extending the loan repayment pause by claiming it’s still too difficult to find a job.
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We already have tools, created by Congress, to help those who can’t afford their loan payments and seek income-based repayments. There are even bipartisan loan repayment solutions, such as the REPAY Act authored by myself and Maine Independent Sen. Angus King that would even further simplify loan repayment options for borrowers which could be passed overnight.
Congress never granted the authority to the executive branch to forgive mass student debt. There is no section of the Higher Education Act that gives discretion to the education secretary to come up with a whole new plan for the mass cancellation or forgiveness of debt owed on student loans. The secretary can forgive debt for individuals in specific circumstances of disability, death or fraud. But nowhere in federal law has the scheme of mass forgiveness ever been contemplated.
Penn Wharton estimates that the president’s debt "cancellation" policy will cost taxpayers an additional $300 billion, piling up more debt on the shoulders of the taxpayers, and increasing inflationary pressure on the economy.
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Lawsuits will quickly follow any declaration by the administration that it has the authority to cancel student loan debt. Courts will intervene and the administration’s handout to its elite allies will be stopped. So instead of creating even more confusion, the administration should abandon its efforts and work instead with Congress to pass bipartisan legislation to make it easier and simpler to repay student loans.
I’m ready to get to work, Mr. President, Mr. Secretary, are you?
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