Biden student loan bailout ‘fatally flawed’ and ‘flagrantly illegal,’ Purdue University president says

Biden student loan bailout ‘fatally flawed’ and ‘flagrantly illegal,’ Purdue University president says

The president of Purdue University called the $10,000 per person student loan bailout Biden is expected to issue “fatally flawed” and “flagrantly illegal,” reports Campus Reform. Mitch Daniels criticized the idea of canceling student loans at taxpayer expense. Daniels is a former governor of Indiana and was once the director of the White House’s Office of Management and Budget.

Canceling student debt would benefit Purdue graduates less than the graduates of most schools because Purdue has kept tuition relatively low, by avoiding wasteful spending and keeping administrative bloat at lower levels than most universities. As a result, Purdue students often have no debt. (Federal student loans encourage some colleges to raise tuition, by making it possible for more students to pay high tuitions. Each additional dollar in government financial aid translates to a tuition hike of about 65 cents, according to the Federal Reserve Bank of New York. As college spending has exploded, growing numbers of colleges now have more administrative staff than professors).

Daniels noted that 60% of Purdue’s class of 2021 graduated without any student loans, a higher than average level for a college. Purdue’s decade of tuition freezes helped many of its students avoid going into debt. Daniels said the Biden administration itself knows that canceling student loans through an executive order is flawed. “One reason this has taken so long for the administration to say something about is they know it’s fatally flawed,” Daniels said on CNBC this week:

“This is another very regressive suggestion, they’re going to give money to people making three times the national median average,” Daniels noted.

“There’s just no way to present this, that it isn’t a giveaway to people who don’t need it and who freely took these obligations on,” he said.

Daniels called it unfair to the “millions of people who paid their debts back, 99 percent of our graduates at Purdue do pay them back.”

He said he is “not sure” what to tell those people who paid off their responsibilities “when other people are let off the hook.”

He also said the bailout is “flagrantly illegal” since President Biden is not going through Congress for new government spending.

“It’s wrong, it’s wrong fiscally,” Daniels said.

Campus Reform notes that a “legal analysis from the Texas Public Policy Foundation concluded that it’s likely illegal for the president to transfer student loan debt [to taxpayers] through executive order. Biden has previously said he cannot cancel $50K by executive order, an idea pushed by Senators Chuck Schumer and Elizabeth Warren.”

LU Staff

LU Staff

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