President Joe Biden’s $500 billion “student loan bailout will benefit some of his political appointees to the U.S. Department of Education,” reports The College Fix, citing a report from a government watchdog group. Some of those appointees likely helped draft the policy given their influential roles in the administration, according to Tom Jones, founder of the American Accountability Foundation. He said “that a clear conflict of interest exists for DOE staffers who helped write the proposal.” “The fact that Department of Education staffers who could personally benefit from the student loan bailout are the same people who are crafting it is a conflict of interest and unacceptable.”
Jones argues that “The President and the Secretary of Education should have excluded anyone who was eligible for the bailout from helping draft it.”
The American Accountability Foundation’s report notes that the “political staff at the Department of Education could personally benefit by up to $512,646 in forgiven student loan principal balances and forgone interest payments if $10,000 in federal loans are forgiven.” It cites the fact that more than 40 Education Department staffers will personally benefit from the student loan bailout — including Melanie Muenzer and Jennifer Mishory, two department chiefs of staff whose collective debt forgiveness could reach $40,000, according to AAF.
Jones believes that DOE staffers’ personal benefit from the bailout helped lead to the Biden administration adopting the bailout: “The people who drafted the policy see the issue through their personal lens, which is that of a young person living in Washington DC, heavily indebted from expensive educations whose value outside government and campaign jobs is negligible,” Jones said. “Of course they advocate for a policy that reduces their monthly bills. You would have had a much different policy if it was drafted by people who had taken loans, graduated, worked in the private sector, and paid down their loans.”
Jones argues that Biden’s plan is “glaringly unfair” to people who worked hard to avoid taking on debt as well as those who have paid off their loans. He stated:
‘It’s unfair to the young person who waited tables 40 hours a week after classes to pay their tuition and not take loans, it’s unfair to the student who went to a less expensive school when they might have been a better fit at a pricier school, it’s unfair to people who graduated, worked their butts off and paid their loans like they’re supposed to, it’s unfair to parents who saved for their children’s tuition and sacrificed for their children, it’s unfair to the taxpayer who graduated high school, got a six-figure welding job, and didn’t go to college and now has to pay higher taxes to cover the loans of a gender studies major from Oberlin.’
In addition to this student loan bailout, Biden also is changing income-driven repayment plans in ways that will spur colleges to raise tuition and stick taxpayers with the tab. Biden’s changes “will make college much more expensive” for taxpayers and many students, reports Reason Magazine.
Biden’s student loan plan could cost taxpayers over a trillion dollars, according to analysts at the University of Pennsylvania’s Wharton School, taking into account changes made by Biden to income-driven repayment plans.
Biden’s plan may also may be illegal. As the College Fix notes, “An analysis from the Texas Public Policy Foundation concluded that an executive order bailout is likely illegal. Alan Dershowitz, professor emeritus at Harvard Law school, has also said that a student bailout through executive action would be illegal.”
Biden’s plan is also likely to increase college tuition and inflation. Jason Furman, chairman of President Obama’s Council of Economic Advisers, calls Biden’s plan “reckless.” Furman says “Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.” Biden’s plan will increase economic inequality and the national debt. Even the liberal Washington Post calls Biden’s student-loan bailout “a regressive, expensive mistake.”
While Biden is writing off some student loans for high-income college graduates, he has left intact far more burdensome obligations imposed by the government on some working-class people who never went to college — obligations that federal law prevents from being modified, even when those obligations lead to impoverishment or, in some cases, incarceration.
